The Connecticut labor news., 1923-07-13
NEW HAVEN IS NOT SAFE
 INVESTMENT
Con ..servative N. Y. Fri bune Warns Readers Bonds and $ ock Value Is Doubtful.

New Haven Road stock, through mismanagement of the road, it's La Dor batting, ruinous policy and the general run down conditions of the company IS not a safe investment, according to an impartial survey made by the financial experts of the New York Tribune in answer to in quiries from readers as to whether the stock IS safe or not Even the bonds are not considered anything more than of doubtful value even as a semi-speculative venture, reader is told in answer to his query. The Tribune, which certainly cannot be considered as biased" against the road, says:
 These two Inquiries raise a ques- t1on of the investment value of New York, New Haven & Hartford stock and bonds just at the time when the future status of these securities IS most in doubt As the prospective stock buyer must know, New Haven stock sold few days ago at the low est price in history, the low figure of o5s comparing with the record high of 255 in 1902 and with I42A as re- gently as 1912
 "The Joint New England Railroa Committee, composed of 30 represen- tative men appointed by the gover- nors/ of six New England states to study the railroad situation in that region, has just made its report con taining recommenS zlsI Iuas, among chem a suggestion for d voluntary re organization that would avoid the delay and expense incidental to re- ceivership. The committee purposes to reduce the New Haven's funded debt to point where the amount of income normally available would meet interest requirements and leave small balance.
 "The bondholders would be asked to submit to a scaling down of $I6,- 100000 in the total of bonds out standing, accepting in exchange for their bonds new 5 per cent. pre- ferred stock that would become cu- mulative from January I, 1924 This preferred stock would be issued against the 3H, 4 and per cent. bonds to an amount equal to a yet undetermined portion of the par value of the bonds. In view of the high coupon rate of the and 7 per cent bonds, which are secured equally with the 3Hs, 4s and 5s on all the com pany's property, they would be ex- changed on more generous basis, the report mentioning stock to the amount of I2o per sent. of the par fair arrangement.
 "The committee estimates that such a plan would reduce the New Haven's fixed charges from $2I,64o,ooo to $I8,- 100000. In addition to this $I5,ooo, 900 new money would be obtained through the sale of this new stock, and this fund would be used for the purpose of buying outstanding bonds, 900 more. This is just a tentative proposal that will probably meet with much opposition from holders of stock and bonds.
 AS matter of fact, the chairman mittee has already issued a statement ed. Apparently this is the first gun fired in opposition to the joint com plan, which cannot be carried out without the approval of a sub stantial majority of all the security holders affected Underlying bonds of the New Haven system would not be affected by the plan, except to the extent that scaling down of interest charges would reduce the danger of receivership.
 The investor holdings debenture As and 6s would, if the plan became ef- fective, find himself in possession of preferred stock on which the com pany need not pay dividends until the beginning of 1927 and on which the declaration of dividends beginning with 1927 would be optional with the directors, although unpaid dividends in that and all subsequent years would accumulate to the credit of the pre- ferred stock
 At the present time interest on the bonds is an obligation that the com pany cannot ignore without running into receivership. But under presen, conditions there is reasonable doubt about the ability of the company to meet this obligation indefinitely, and this doubt accounts for the "attrac tive" prices at which the bonds are purchasable Only the highly confus- ing future of the bonds can determine whether these prices are actually "at-