FINANCE DOCKET No. 3531

ACQUISITION OF PROPERTIES BY ILLINOIS BELL TELEPHONE CO. AND COMMERCIAL TELEPHONE & TELEGRAPH CO.

Submitted April 19, 1924. Decided May 9, 1924

Acquisition by the Illinois Bell Telephone Company of certain properties of the Commercial Telephone & Telegraph Company, and acquisition by the latter company of certain properties of the Illinois Bell Telephone Company found to be of advantage to the persons to whom service is to be rendered and in the public interest. Certificate issued.

Ray W. Clarke for applicants.

REPORT OF THE COMMISSION

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

The Illinois Bell Telephone Company and the Commercial Telephone & Telegraph Company, hereinafter referred to as the Illinois Company and the Commercial Company, respectively, on March 26, 1924, filed a joint application under section 407 of the transportation act, as amended, for a certificate that the acquisition by the Illinois Company of certain telephone properties of the Commercial Company and the acquisition by the Commercial Company of certain telephone properties of the Illinois Company will be of advantage to the persons to whom service is to be rendered and in the public interest. The Illinois Commerce Commission, on February 27, 1924, entered an order approving the proposed acquisitions, conditioned upon the completion of the transfer of the properties within 90 days from the date of the order and the maintenance of present rate schedules; and providing that its approval shall not be considered as evidence of the value of the properties in any subsequent proceeding. A hearing has been had and no objection to the granting of the application has been presented to us.

The Illinois Company is one of the Bell group. It owns and operates exchanges and toll lines throughout the State of Illinois and in Lake and Porter Counties, Ind. The Commercial Company owns and operates exchanges and toll lines throughout southern and southeastern Illinois, including territory served by the toll lines of the Illinois Company.

On November 24, 1923, the applicants made a contract by which the Commercial Company agrees to sell to the Illinois Company its exchanges at Carlyle, Beckemeyer, Breese, Aviston, Trenton, Germantown, Salem, Kinmundy, Enfield, and Norris City, and certain. toll lines in St. Clair, Clinton, Marion, Jefferson, Wayne, Hamilton, White, Saline, Gallatin, Pope, and Hardin Counties, all in the State of Illinois. The Illinois Company agrees to pay therefor $190,000 cash and in addition to convey to the Commercial Company as a part of the consideration, certain toll lines in Wabash, Wayne, Richland, Lawrence, Jasper, Crawford, and Clay Counties, Ill. The 10 exchanges to be transferred by the Commercial Company serve 1,698 company-owned and 463 subscriber-owned stations. None of the exchanges are duplicated by the Illinois Company. The toll lines to be transferred by the Commercial Company and the Illinois Company have a pole mileage of 335 miles and 138 miles, respectively. The toll lines of the Illinois Company are duplicated by the lines of the Commercial Company. No securities will be issued to effect the proposed acquisitions.

The plant engineer of the Illinois Company estimates the structural value of the exchange property and toll lines to be transferred by the Commercial Company at $320,000, and the structural value of the toll lines to be transferred by the Illinois Company at $69,000. The estimated value of property to be retired because of duplication is $39,000.

Upon the transfer of the respective properties the Illinois Company will take over the local exchange and toll-line service in the counties in which the properties to be conveyed by the Commercial Company are located and the latter company will perform all toll service in the counties in which the properties to be transferred by the Illinois Company are located. The proposed elimination of duplication apparently should result in added efficiency and economies in operation.

Both applicants are now, and after the consummation of the proposed transaction will be, subject to the interstate commerce act.

At the hearing letters from the mayor of Salem, the Chambers of Commerce of Robinson, Lawrenceville, and Salem, and a number of other representative telephone users were introduced in evidence, all favoring the proposed acquisitions.

Upon the facts presented we find that the acquisition by the Illinois Company of certain properties of the Commercial Company, and the acquisition by the latter company of certain properties of the Illinois Company, as described in the application, will be of advan

tage to the persons to whom service is to be rendered and in the public interest. A certificate to that effect will be issued.

COMMISSIONER MEYER did not participate in the disposition of this

case.

CERTIFICATE OF ADVANTAGE AND PUBLIC INTEREST

Issued May 9, 1924

A hearing and 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 said report is hereby referred to and made a part hereof:

It is hereby certified, That the acquisition by the Illinois Bell Telephone Company of certain properties of the Commercial Telephone & Telegraph Company, and the acquisition by the latter company of certain properties of the Illinois Bell Telephone Company, as described in the application and report aforesaid, will be of advantage to the persons to whom service is to be rendered and in the public interest.

90 I. C. C.

FINANCE DOCKET No. 3591

MAINE CENTRAL EQUIPMENT TRUST OF 1924

Submitted May 12, 1924. Decided May 14, 1924

Authority granted to assume obligation and liability in respect of $1,300,000 of equipment-trust certificates to be issued by the State Street Trust Company, of Boston, under an equipment-trust agreement to be dated June 2, 1924; said certificates to be sold at not less than 96.86 per cent of par in connection with the procurement of certain equipment. Charles H. Blatchford for applicant.

REPORT OF THE COMMISSION

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

The Maine Central Railroad Company, a common carrier by railroad engaged in interstate commerce, has duly applied for authority under section 20a of the interstate commerce act to assume obligation and liability in respect of $1,300,000 of Maine Central Railroad Company equipment-trust certificates of 1924, by entering into an equipment-trust agreement under which the certificates will be issued and into a lease of certain equipment to be purchased. No objection to the granting of the application has been presented to us.

To meet its requirements for additional equipment, the applicant proposes to acquire the following:

Morris McDonald, Edward W. Wheeler, and Louis M. Patterson, as vendors, will procure this equipment from the builders and enter into an agreement with the State Street Trust Company, of Boston, and the applicant, creating the Maine Central Railroad Company equipment trust of 1924, and will sell and deliver the equipment to the trustee.

Upon the execution of the aforesaid agreement, the trustee will issue and sell Maine Central Railroad Company equipment-trust certificates of 1924 in an amount not exceeding $1,300,000. The remainder of the purchase price will be paid in cash by the applicant under the terms of the lease of the equipment.

The equipment-trust agreement, a copy of which was filed with the application, is to be dated June 2, 1924, and will provide for the issue of $1,300,000 of trust certificates. Pursuant to the terms of the agreement, the State Street Trust Company, of Boston, as trustee, will execute the trust certificates evidencing shares in the equipment trust. The certificates will be in the denomination of $1,000, payable to bearer, or registrable as to principal, and will mature successively in principal amounts of $44,000 at semiannual intervals beginning December 1, 1924, and ending June 1, 1929, and $43,000 at semiannual intervals beginning December 1, 1929, and ending June 1, 1939. The holders of the certificates will be entitled to dividends thereon at the rate of 54 per cent per annum, payable semiannually. Simultaneously with the execution of the trust agreement, the applicant will lease from the trustee the equipment delivered by the vendors. The proposed lease, a copy of which is filed with the application, will provide, among other things, that the lessee shall pay to the lessor (a) amounts in cash equal to the difference between the cost of the trust equipment and the principal amount of the trust certificates issuable in respect thereof, (b) all necessary and reasonable expenses of the trust and lease, (c) all taxes upon the income or property of the trust, and (d) amounts equivalent to the principal of the certificates and to the dividends thereon, when they become payable. The applicant will indorse on the trust certificates its guaranty of the payment of the principal and the dividends.

Until all the provisions of the trust agreement and the lease 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 these requirements have been performed, the trustee will convey the title to the applicant.

Arrangements have been made to sell the trust certificates to Kidder, Peabody & Company, of Boston, Mass., at not less than 96.86 per cent of par and accrued dividends. On this basis the annual cost to the applicant will be approximately 6.04 per cent.

We find that the proposed assumption of obligation and liability in respect of the equipment-trust certificates by the applicant as aforesaid (a) is for a lawful object within its corporate purposes, and compatible with the public interest, which is necessary and appropriate for and consistent with the proper performance by it of service to the public as a common carrier, and which will not impair