MINTON FLAYS RAIL FINANCE; AIRS DISPUTE
Minton Flays Rail Finance; Airs Dispute WASHINGTON, D. C—Railroads need money, but some are deliberately taking less money than they could get for their bonds, Senator Sherman Minton (Dem., Ind),...
...Halsey, Stuart wrote a letter of protest to Lyman Delano, chairman of the L. <fc N. Several L. & N. stockholders also protested against selling the bonds to the road's usual Morgan monopoly, without allowing other banks to "bid...
...when Delano was chairman of that road...
...another Wall Street bank, have monopolized the financing of almost all major railroads for many years...
...The E. J. tz...
...A similar case has been called to my attention...
...1,101 Taxes ...................$ 687 Profit....................$ 1,692 WAUNAKEE Assets ..................$115,026 Operating revenues ......$ 22,130 Operating expenses .....$ 17.630 Depreciation ...........$ 22,042 Taxes ..................5 826 Profit ..................S 538 BELMONT Assets ...................$10,287 Operating revenues ......S...
...Senator O'Mahoney's Monopoly committee revealed a half-dozen other cases in which railroad bonds were sold to the Morgan monopoly without giving other bankers a chance...
...A Midwest banking group headed by Halsey, Stuart & Co., Chicago, and Otis & Co., Cleveland, urged the I. C. C. to make the railroad give them a chance to offer prices for these bonds...
...Speaking for the Halsoy-Stuart-OUs group of Midwest bankers, Buikley said: "My clients are prepared to submit a firm sealed bid to net the E. J. & E. more than par for its proposed $20,000,000 Issue of 3'i per cent bonds "It is reported that Morgan is about to buy these bonds without competitive bidding...
...That dispute ls over the question whether railroads should be permitted to sell their bonds to an investment banking monopoly group headed by the House of Morgan, without giving other bankers a chance to offer a higher price and lower interest rates, thus giving the railroads more money at a lower cost...
...Eeotric profits were $1,994 and water $1,455...
...Airs Dispute WASHINGTON, D. C—Railroads need money, but some are deliberately taking less money than they could get for their bonds, Senator Sherman Minton (Dem., Ind), charged last week...
...7 Operating expenses .......$ 7,774 Depreciation .............$ 1,040 Taxes ...................$ 553 Profit ...................$ 507 Wnunakce reported electric revenues of $18,114 and expenses of $14,269, Avtth water revenues of $4,015 and expenses of $3,361...
...The least they could do is to try to get for the bonds they sell all that they can get, and not be favoring some Wall street banker by means of a cut in their bond issues...
...E. case was described by former Senator Robert J. Buikley of Ohio, in a telegram to I. C. C. Commissioner Claude R. Porter...
...and Belmont Light and Power plant, $507...
...Belmont reported electric revenues of $8,545 and expenses of $6,322, with water revenues $1,461 and expenses $1,451...
...3 Municipal Utilities Have $2,737 Profits Black Earth, Waunakee and Belmont Report on 1939 Operations Three municipal electric and water utilities reported to the state public service commission today they had made total profits of $2,737 in 1939...
...Nevertheless, the commission "okayed" the sale to Morgan and all other banks were shut out...
...Senator Wheeler's railroad finance investigating committee revealed that the House of Morgan and Kuhn, Loeb & Co...
...The Elgin, Joliet & Eastern has been offered 100 par for $20,000,000 bonds, but proposes to accept 99 Vi from Its bankers in Wall street...
...The three utilities reported paying total taxes of $2,066...
...Since there are three Morgan partners on the board of directors of the United States SSteel Corporation, which controls this railroad, the public interest surely needs your active attention in this case...
...The Black Earth utility reported profits of $1,692...
...Two Koads Criticized "A short time ago," Minton said, "Senator Harry S. Truman Of Missouri directed the attention of the senate to the fact that a bond house bid the full par value for a Louisville & Nashville bond issue, but the railroad sold the issue to its banker in New York for less than the offer the raalroad already had...
...So long as the railroads are asking the government to help them solve their problem—and they have a problem—it seems to me they should put their own house in order...
...Electric depreciation was $1,470 and taxes $403, with water depreciation $571 and taxes $422...
...One was a $12,000,000 bond issue by the Atlantic Coast Line ln 1935...
...The L. & N. bonds referred to by Minton were a $30,000,000 issue at 3% per cent interest and $30,000,000 at 4 per cent...
...Following are the utilities and their financial statements filed with the commission: BLACK EARTH Assets ...................$46,705 Operating revenues ......$13,305 Operating expenses .......S 9,222 Depreciation...
...Case Not Decided The commission has not yet an-riounced whether it will approve the sale of the E., J. <fe E. bonds to Morgan without competitive bidding...
...Waunakee Water and Electric commission, $538...
...Electric profits were $979 while the water department lost $471...
...Electric- depreciation was $818 and taxes $303, wilh water depreciation $221 and taxes $250...
...He brought, out into the open on the senate floor a dispute which has been raging for many months among bankers, railroad officials and members of the Interstate Commerce commission...
Vol. 10 • March 1940 • No. 12
