New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-04-26
ss.zs3O, 100000 Bond
Issue Authorized
For 2 Railroads
80 Banks and Trust Comma
mics in Syndicate Backing
Great Northern, Northern
Pacific in Huge Flotation

WASHINGTON, April 25.--The In
terstate Commerce Commission to-day
granted authority to the Northern
Pacific and Great Northern Railway
companies to issue 100000 ION.
hftcen-year convertible gold bonds and
authorized each of the companios to
issue and pledge S33 100000 of other
bonds to aid in securing the Joint
bonds
The issue was authorized to enable
TIE two roads to retire Joint bonds
amounting to $2l5,227 600 issued IL
1901 for the purpose of purchaslne
the Chicago, Burlington & Ouin,v
Railroad
The commission said the actual rate
pad by the roads on the bonds. which
VIII bear 61s per cent interest, would
be about 145 per cent, on account Of
tho expense of marketing. 1t was ostj.
mated that they probably would sell to
the public at 90 r.
Each holder of the Joint bonds will
be entitled to convert them into North
ern Pacific or Great Northern bonds.
rms convertible feature, the commits
sion said, will enable insurance com
panles, savings banks and trust com
panles. which in some states are not
permitted to invest in bonds secured
~ 9NONN NoiiAtc!dl, 10 invest IN them.
Commissioner McChord dissented
from the decision of the majority. on
the ground that the roads had distrib
utcd dividends upon their capital stock
and expended various sans in maintc-
nance, bctterments extensions.
Nothing has been set aside as a sink
ing fund to retire any part of their
bond issue he said, land at the end
OF a twenty-year period they have
failed to cancel a single dollar of the
Indebtedness incurred for the sole pur-
pose Of obtaining control of another
trunk line He described the trans
action as prodgal," adding that
sooner or later the expense must be
met by travellers an. shippers.
Commissioners Eastman also dis
scented, ON the ground that. by
frank statement to the holders of
the maturing bonds. the whole refund
ing process could have been effected
without the expense called for under
the present law. Il believe" he said.
that with our help and without en-
p!oying brokers at the huge cost pro
posed. the roads could carry through
ghls refunding operation upon much
better terms
nationwide syndicate of iirty-nina
Yca.mcut firms completed the. arrange
mons for the bond issue
The New York syndics'e managers
are J J. Morgan & Co.. the First Ma
llonal Bank, the Guaranty COMPANY.
kidder. Peabody & Co., Brown Broth
ers & Co.; the National City Company,
Harris, Forbes & Co. the Bankers
Trust Company. Lee, Higginson & Co.
and Dillon, Read & Co. Members from
other cities include Boston, Chicago.
Cincinnati. Cleveland, Detroit, Min
neapolis Philadelphia, Pittsburgh, ST.
Louis and st Paul
The Offering is the largest single
railroad issue ever placed on sale to
the public by bankers. The bonds are
issued under an indenture with the
Flst National Bank and are secured
~ pledge OF the following collateral.
valued at an amount in excess of l2o
per cent of the principal amount OF
the issue: lc5S.674 shares of the cap
tai stock Of the Chicago, Burlington &
Quincy Railroad Company; S33, 900 600