M. S. Barger, H. G. Snelling, and H. A. Stahl will procure the equipment from the builders and enter into an agreement with the Guaranty Trust Company of New York, as trustee, and the applicants, creating the New York Central Lines equipment trust of 1924. They will cause the equipment thus procured to be sold and delivered to the trustee. As the equipment is delivered to the trustee from time to time, it will, upon execution and delivery of lease or leases thereof, issue and deliver to the vendors, or upon their order, New York Central Lines equipment-trust certificates of 1924, in an amount not exceeding 75 per cent of the cost of the trust equipment so delivered, but not exceeding $25,050,000 in the aggregate. The trustee will also, upon deposit by the vendors with it, or to its credit in certain depositaries, of cash in amounts of not less than $100,000 at any one time, execute and deliver to the vendors trust certificates for the full amount of such deposit. From the moneys thus received the trustee will pay to the vendors upon delivery of the equipment 75 per cent of its cost. In either event the remainder of the purchase price not provided for by the issue of trust certificates will be paid in cash furnished by the applicants as advance rental under the lease or leases of the equipment.

The equipment-trust agreement will be dated June 1, 1924, and will provide for the issue of not exceeding $45,630,000 of trust certificates, of which $25,050,000 is now proposed to be issued and, when executed by the trustee, will evidence shares in such equipment trust. The certificates will be in the denominations of $500 and $1,000, payable to bearer and registrable as to principal only. Certificates in the amount of one-fifteenth of the entire authorized issue will be

due and payable on June 1 in each of the years 1925 to 1939, inclusive. Dividend warrants will be attached to each certificate evidencing the right of the holder to dividends upon the principal thereof at the rate of 5 per cent per annum, payable semiannually on June 1 and December 1 in each year.

The trustee and the applicants will enter into a lease or leases of the equipment, each lease to be for a term beginning on the date of its execution and ending June 1, 1939. A copy of the proposed form of lease is filed with the application and provides that the fessees jointly and severally shall pay to the lessor in respect of said equipment (a) all necessary expenses of the trust and of the lease or leases, (b) all taxes upon the property or income of the trust, (c) the amount of the dividend warrants when they become payable, (d) the principal of the certificates when they become payable, and (e) as advance rental, amounts necessary to meet the cost of the equipment delivered and not provided for by the issue of trust certificates.

While the applicants will be jointly and severally liable under the lease or leases, they may agree among themselves upon a division of the equipment covered thereby, so that the several companies may have and enjoy the use of separate portions thereof as fully and in the same manner as though leased to each solely.

Until all the provisions of the trust agreement and of the lease or leases shall have been fully complied with and all the payments provided for therein have been made, the title to the trust equipment will remain in the trustee. When all such requirements have been performed the trustee will convey the title to the applicants, jointly or in severalty, in such manner as they may designate, so that the equipment conveyed will become the absolute property of the respective applicants.

Arrangements have been made to sell the certificates to J. P. Morgan & Company at 98 and accrued dividends. On that basis the annual cost to the applicants in respect of such certificates will be approximately 5.327 per cent. The remainder of the proposed certificates are not to be issued and sold at this time.

We find that the assumption of obligation and liability in respect of $25,050,000 of the proposed equipment-trust certificates by the applicants as aforesaid (a) is for lawful objects within their respective corporate purposes, and compatible with the public interest, which are necessary and appropriate for and consistent with the proper performance by them of service to the public as common carriers, and which will not impair their ability to perform that service, and (b) is reasonably necessary and appropriate for such purposes.

An appropriate order will be entered.

ORDER

Entered June 2, 1924

Investigation of the matters and things involved in this proceeding having been had, and said division having, on the date hereof, made and filed a report containing its findings of fact and conclusions thereon, which report is hereby referred to and made a part hereof:

It is ordered, That, for the purpose of acquiring possession of, the right to use, and ultimately title to, the equipment described in the aforesaid report, the New York Central Railroad Company, the Michigan Central Railroad Company, the Cleveland, Cincinnati, Chicago & St. Louis Railway Company, and the Cincinnati Northern Railroad Company be, and they are hereby, authorized to assume, jointly and severally, obligation and liability in respect of not exceeding $25,050,000 of New York Central Lines equipment-trust certificates of 1924, to be issued by the Guaranty Trust Company of New York, (a) by entering into an agreement under date of June 1, 1924, with M. S. Barger, H. G. Snelling, and H. A. Stahl, as vendors, and the Guaranty Trust Company of New York, creating said trust and providing for the issue of not exceeding $45,630,000 of said certificates with dividend warrants attached, and (b) by entering into a lease or leases of the trust equipment with said Guaranty Trust Company of New York, thereby agreeing to pay as advance rental the difference between the cost of the trust equipment and the aggregate amount of certificates issuable in respect thereof, the principal of said certificates, the dividends thereon, and certain other charges; said agreement and said lease or leases to be substantially in the respective forms set forth in the application; said certificates to entitle the bearer or registered owner thereof to a share in said trust and to dividends at the rate of 5 per cent per annum, payable semiannually, to be dated June 1, 1924, to be in the denominations set forth in the aforesaid report, one-fifteenth of the principal amount of the certificates so issued to mature on June 1 in each year, 1925 to 1939, inclusive; said certificates to be sold at not less than 98 per cent of par and accrued dividends, and the entire proceeds thereof used in the procurement of said equipment. It is further ordered, That, except as herein authorized, said certificates shall not be sold, pledged, repledged, or otherwise disposed of by the applicants, unless and until so ordered by this commission. It is further ordered, That, within 10 days after the execution thereof the applicants, or any one of them acting for all, shall file with this commission certified copies of said equipment-trust agreement and said lease or leases of the trust equipment in the forms in which they were respectively executed.

It is further ordered, That the applicants, or any one of them acting for all, shall report concerning the matters herein involved in conformity with the commission's order dated May 25, 1922, respecting applications filed under section 20a of the interstate commerce act.

And it is further ordered, That nothing herein shall be construed to imply any guaranty or obligation as to said certificates, or dividends thereon, on the part of the United States.

90 I. C. C.

FINANCE DOCKET No. 2978

SECURITIES OF WACO, BEAUMONT, TRINITY & SABINE

RY.

Submitted May 31, 1924. Decided June 6, 1924

Authority granted to extend date of maturity of $12,000 of equipment-trust notes from June 1, 1924, to June 1, 1929. Previous report, 82 I. C. C. 200.

Edward A. Haid for applicant.

SUPPLEMENTAL REPORT OF THE COMMISSION

DIVISION 4, COMMISSIONERS MEYER, EASTMAN, AND POTTER BY DIVISION 4:

The Waco, Beaumont, Trinity & Sabine Railway Company, a common carrier by railroad engaged in interstate commerce, has duly applied for authority under section 20a of the interstate commerce act to extend the maturity date of $12,000 of equipment-trust notes from June 1, 1924, to June 1, 1929. No objection to the granting of the application has been presented to us.

By our order entered herein on August 28, 1923, 82 I. C. C. 200, we authorized the applicant to issue and deliver to the vendors at par $60,000 of 5 per cent equipment-trust notes, which were to mature serially in amounts of $12,000 annually from June 1, 1924, to June 1, 1928, inclusive. When the original authority was requested it was expected that the transaction would be consummated by June 1, 1923, but the applicant represents that owing to certain delays it was not completed until April 4, 1924. This gave the applicant approximately but 60 days in which to make provision for meeting the first installment of $12,000. Accordingly, Francis F. Randolph and Hugo W. Blumenthal, the vendors, the Central Union Trust Company of New York, trustee under the original agreement dated June 1, 1923, and the applicant, have entered into a supplemental agreement dated June 1, 1924, subject to our approval, whereby the maturity date of the $12,000 of notes maturing June 1, 1924, will be extended to June 1, 1929. As extended the notes are to be secured in all respects by that agreement as though originally due on the new dates of maturity.

We find that the proposed extension of the maturity dates of equipment-trust notes by the applicant as aforesaid (a) is for a lawful object within its corporate purposes, and compatible with