clusions thereon, which report is hereby referred to and made a part hereof: It is ordered, That, for the purposes set forth in the aforesaid report, the Northern Central Railway Company be, and it is hereby, authorized to issue $8,300,000, principal amount, of general and refunding mortgage 5 per cent gold bonds, series A, under and pursuant to, and to be secured by, a general and refunding mortgage to be made by the Northern Central Railway Company, under date of March 1, 1924, to the Fidelity Trust Company, trustee; said bonds to be dated March 1, 1924, to mature March 1, 1974, to bear interest at the rate of 5 per cent per annum, payable semiannually, and to be delivered to the Pennsylvania Railroad Company at par. It is further ordered, That, as lessee of a lease dated July 29, 1914, between the Northern Central Railway Company as lessor and the Pennsylvania Railroad Company as lessee, the Pennsylvania Railroad Company be, and it is hereby, authorized to assume obligation and liability in respect of $8,300,000, principal amount, of the Northern Central Railway general and refunding mortgage 5 per cent gold bonds, series A, said bonds to be sold at a price not less than 99 per cent of par and accrued interest. It is further ordered, That, except as herein authorized, said bonds shall not be sold, pledged, repledged, or otherwise disposed of by the applicants, or either of them, unless and until so ordered by this commission. It is further ordered, That the applicant 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 bonds, or interest thereon, on the part of the United States. 90 I. C. C. FINANCE DOCKET No. 4237 BONDS OF PITTSBURGH, YOUNGSTOWN & ASHTABULA RY. Submitted August 2, 1924. Decided August 20, 1924 1. Authority granted to the Pittsburgh, Youngstown & Ashtabula Railway Company to issue $2,000,000 of first general mortgage 5 per cent bonds, consisting of $521,000 of series-B bonds and $1,479,000 of series-C bonds, to be delivered to the Pennsylvania Railroad Company at par in partial settlement for expenditures made for additions and betterments to its properties. 2. Authority granted to the Pennsylvania Railroad Company to assume obligation and liability, as lessee, in respect of said bonds and to sell them at not less than 99 per cent of par and accrued interest for the purpose of reimbursing its treasury for expenditures made upon the property of the Pittsburgh, Youngstown & Ashtabula Railway Company. E. H. Seneff for Pittsburgh, Youngstown & Ashtabula Railway Company. C. B. Heiserman for Pennsylvania Railroad Company. REPORT OF THE COMMISSION DIVISION 4, COMMISSIONERS MEYER, AITCHISON, AND POTTER BY DIVISION 4: The Pittsburgh, Youngstown & Ashtabula Railway Company and the Pennsylvania Railroad Company, common carriers by railroad engaged in interstate commerce, have duly filed a joint application under section 20a of the interstate commerce act, in which the Pittsburgh, Youngstown & Ashtabula Railway Company seeks authority to issue $2,000,000 of first general mortgage 5 per cent bonds, consisting of $521,000 of series-B bonds and $1,479,000 of series-C bonds, and the Pennsylvania Railroad Company seeks authority to assume obligation and liability, as lessee, in respect of said bonds and to sell them at a price not less than 99 per cent of par and accrued interest. No objection to the granting of the application has been presented to us. Under date of July 1, 1910, the Pittsburgh, Youngstown & Ashtabula Railway Company leased all its properties to the Pennsylvania Company for a term of 999 years. By an agreement of assignment dated December 28, 1917, effective January 1, 1918, the Pennsylvania Company assigned all its interest in and liability under such lease for the unexpired term thereof to the Pennsylvania Railroad Company, the lessor company consenting to such assignment. Article 8 of the lease provides that the lessor will issue to the lessee at its request special stock, bonds, or other securities to represent the cost of additions and betterments made by the lessee to the leased properties and properly chargeable to capital account. It is represented that during the year 1923, the lessee made expenditures upon the property of the lessor, together with an unsettled balance for the year 1922 of $94.27, aggregating $4,116,214. 87. Of the total expenditures made, $2,001,584.45 is the portion represented by additions and betterments for road purposes. The lessee has requested a settlement to the extent of $2,000,000 by the issue to it of first general mortgage 5 per cent bonds, consisting of $521,000 of series-B bonds and $1,479,000 of series-C bonds of the lessor. The Pittsburgh, Youngstown & Ashtabula Railway Company seeks authority to issue $2,000,000 of said bonds in respect of an equal amount of the capital expenditures mentioned above, such bonds to be delivered to the Pennsylvania Railroad Company at par in settlement of a like sum due that company. The bonds will be issued under a mortgage dated June 1, 1908, made by the Pittsburgh, Youngstown & Ashtabula Railway Company to the Central Trust Company of New York (now Central Union Trust Company of New York), trustee. The series-B bonds will be dated February 1, 1922, and mature February 1, 1962, and the seriesC bonds will be dated June 1, 1924, and will mature June 1, 1974. Both series will bear interest at the rate of 5 per cent per annum, payable semiannually. As part of the rental payable under the terms of the lease aforesaid the lessee agreed to pay when due the annual interest on, and the principal of, the bonds of the lessor. The Pennsylvania Railroad Company, as assignee of the Pennsylvania Company, requests authority, as lessee, to assume obligation and liability in respect of the proposed issue of bonds and to sell them at 99 per cent of par and accrued interest, so that it may reimburse its treasury for money expended therefrom for the purposes stated above. We find that the proposed issue of bonds by the Pittsburgh, Youngstown & Ashtabula Railway Company and the proposed assumption of obligation and liability, as lessee, in respect thereof, and the sale of the bonds by the Pennsylvania Railroad Company as aforesaid (a) are 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 per formance by them of service to the public as common carriers, and which will not impair their ability to perform that service, and (b) are reasonably necessary and appropriate for such purposes. An appropriate order will be entered. COMMISSIONER MEYER did not participate in the disposition of this case. ORDER Entered August 20, 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 purposes set forth in the application and aforesaid report, the Pittsburgh, Youngstown & Ashtabula Railway Company be, and it is hereby, authorized to issue $2,000,000, principal amount, of its first general mortgage 5 per cent bonds, consisting of $521,000 of series-B bonds and $1,479,000 of series-C bonds, under and pursuant to, and to be secured by, a first general mortgage made to the Central Trust Company of New York (now the Central Union Trust Company of New York), trustee, dated June 1, 1908; said bonds to be in the denomination of $1,000, payable to bearer and registrable as to principal only, the series-B bonds to be dated February 1, 1922, to mature February 1, 1962, and the seriesC bonds to be dated June 1, 1924, and to mature June 1, 1974; all of said bonds to bear interest at the rate of 5 per cent per annum, payable semiannually, and to be delivered to the Pennsylvania Railroad Company at par. It is further ordered, That, as assignee of the lease dated July 1, 1910, between the Pittsburgh, Youngstown & Ashtabula Railway Company, as lessor, the Pennsylvania Company, as lessee, and which was assigned by the latter under date of December 28, 1917, the Pennsylvania Railroad Company be, and it is hereby, authorized to assume obligation and liability, as lessee, under said lease, in respect of not exceeding $2,000,000, principal amount, of Pittsburgh, Youngstown & Ashtabula Railway Company first general mortgage 5 per cent bonds, series B and C, herein authorized to be issued; said bonds to be sold at a price not less than 99 per cent of par and accrued interest. It is further ordered, That, except as herein authorized, said bonds shall not be sold, pledged, repledged, or otherwise disposed of by the applicants, or either of them, unless and until so ordered by this commission. It is further ordered, That the applicants 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 bonds, or interest thereon, on the part of the United States. 90 I. C. C. |