detail unsettled, on which judicial announcement later should be sought" and that the order in this case "shall not be deemed hereafter to preclude the Commission on the question of what quality and extent of proofs in support of refunding applications are fairly required by the opinion of the learned court.”

A modified and amended order was entered under date of November 28, 1917, to reflect a change in the rate of interest on the Series C bonds, interest date, etc., and provided that the authority to issue the bonds shall apply only to those issued on or before June 30, 1918.

New York Steam Company (Case 2036).—The New York Steam Company on November 5, 1915, made application for the consent of the Commission to execute its refunding mortgage and deed of trust to the Union Trust Company of New York as trustee, and to issue thereunder $2,850,000 of bonds to refund certain of its obligations and provide funds for extensions and betterments. This was granted by an order entered February 7, 1917.

The bonds are at 6 per cent, for 25 years, dated November 1, 1916, secured by a general mortgage on all the property and income of the company, redeemable on any interest date at 103 and accrued interest, to be sold at not less than 90 plus accrued interest, and the proceeds to be used for the following:

Refunding of obligations issued and reimburse

ment of funds already expended for construc

tion and equipment

Discharge of real estate mortgages.

New construction and equipment.

Bond discount (to be amortized out of income).

Total ..

$706,753.35

210,500.00

1,647,746.65

285,000.00

$2,850,000.00

The bonds were to be issued on or before July 31, 1917, but on September 24 the company made application to extend the time to December 31 and requested authority for the exchange of bonds at 90 for notes amounting to $355,000 held by Mr. Elliot G. Stevenson. This application was granted on September 27, 1917. The New York Steam Company was organized September 9,

1881, through the consolidation of the New York Steam Company (organized December 14, 1880) and the Steam Heating & Power Company (organized July 26, 1880), with an authorized capital stock of $7,500,000, of which $3,750,000 was issued in exchange for franchises and patent rights and $1,681,956 for cash, or a total of $5,431,956, the amount outstanding at the present time. No dividends have ever been paid.

The franchise of the company is very broad, granting the right to lay mains and pipes in any and all city streets for the purpose of supplying steam, water, air and other fluids for motive power, heating, cooking or other useful applications. In compensation, the company is required to pay to the city three cents per lineal foot of street in which the mains are laid, until such payments have amounted to $100,000.

Mr. Wallace C. Andrews was the moving spirit in the organization of the company and was its principal stockholder until his death, about 1900.

The residuary legatee under the will of Mr. Andrews was the Andrews Institute for Girls at Willoughby, Ohio. In 1910 it was the holder of $3,478,200 of the steam company's stock and a creditor to the extent of $3,647,000. During that year it had an inventory and appraisal made of the company's property. The cost of duplicating the physical property, with estimated depreciation deducted, was placed at $1,785,000, to which was added $583,000 for the equity in real estate owned, or a total for fixed capital of $2,368,000. The fixed capital then shown on the company's books was $2,819,000, which was subsequently written down to the appraisal figures.

About a year later (July 1, 1911) the steam company issued a refunding mortgage to secure $2,750,000 bonds, and the entire amount was issued to the Andrews Institute in full settlement of its claims. Bonds of a prior issue of $300,000 were cancelled, and back taxes amounting to $150,000 were paid. Altogether, the Institute accepted about $900,000 less than the sum of its claims. At the time these bonds were issued, steam companies. were not under the jurisdiction of the Commission, and it was not until 1913 that the Public Service Commissions Law was amended so as to include them.

Toward the close of 1913, the Commission, on its own motion, commenced an investigation of the steam company's service. As a result of the investigation an order was entered, effective February 20, 1915 (Case 1763), requiring the relaying of 59,000 feet of steam mains of the brick trench type (except those known as intermediate construction) with mains of modern tile construction, at the rate of 10,000 feet each year.

In December, 1914, before the above case had been closed, control of the company was secured by new interests, represented by men who had had long experience in central-station steam service. Work was started in compliance with the Commission's order, and in addition a general policy of rehabilitation has been energetically carried out. During the last two fiscal years (May 1, 1915, to April 30, 1917) $1,500,000 has been expended for relaying old mains, extending mains and services and in repairs to power plants. Three ice manufacturing plants owned by the steam company and operated by a subsidiary company, together with the stock of the subsidiary, were sold in 1915 for $329,000. When the company made application in 1915 for consent to the issue of bonds, the Commission examined its accounts and made an inventory and appraisal of its property. As a result, the order required an adjustment of the accounts by a net charge to corporate deficit of approximately $27,000.

The company's books showed fixed capital as of December 31, 1915 (exclusive of $4,947,179.78 for franchises, patent rights and other intangibles), $3,210,562.25, less depreciation reserved $217,945.15, or a net capital of $2,992,617.10. Compared with these figures, the appraisal showed $3,893,091 as the cost of the physical property, exclusive of "overhead", and $2,208,204.00 with accrued depreciation deducted.

Through an arrangement with the New York City District Realty Corporation (controlled by the same interests), a large modern steam plant has been constructed and equipped in the downtown district. This has been operated by the New York Steam Company under lease since April, 1917. On May 1, 1917, the company had four steam generating plants: one, the leased plant just mentioned, at Burling slip and Water street, one at Washington and Dey streets, and two on the East River front -

one between 58th and 59th streets and the other between 59th and 60th streets. From the first two, steam was delivered to the downtown district and from the last two to the uptown district.

For the fiscal year ending April 30, 1917, the company reported steam sales of 1,500,000 thousand-pounds in the downtown district and 850,000 thousand-pounds uptown, yielding a total revenue of $1,272,000, which was an increase of $208,000 over the previous year. Notwithstanding this increase in revenue, the company's net income for the year decreased $251,000. This was due to increased costs, particularly of coal, and to the fact that one generating station was shut down part of the year.

Reorganization Plan of Staten Island Traction and Electric Companies (Case 2181).— The Richmond Light & Railroad Company and the Staten Island Midland Railway Company are two companies, controlled by practically the same interests, owning and operating all the street railroads, 36 miles of double track, on Staten Island. There is no duplication of service by these companies and for a number of years they have had operating agreements for the exchange of power and reciprocal transfers for passengers. The Southfield Beach Railroad Company, operated only in summer, is a subsidiary of the Richmond Light & Railroad Company, and the three roads are operated almost as one system, but with separate accounting. The Richmond Light & Railroad Company, as its name implies, is also engaged in the commercial production and sale of the electric current of which it has a monopoly on Staten Island.

The operating economics which might be effected by a consolidation of the properties have already been mostly realized, but the improved credit which would presumably result from a legal consolidation gave the companies a good reason for planning such a consolidation and applying to the Commission for its approval. An application for such approval of a matured plan was made jointly by these companies on February 21, 1917. The plan thus presented to the Commission contemplated the execution by the new company of a first and refunding mortgage for $7,500,000, pledging all its property and also two mortgages of the same amount to be executed severally by each of the present companies, to secure the issue of 6 per cent gold bonds of which

$1,730,000 were to be issued immediately. The new company was to issue at once, for exchange, 6 per cent cumulative preferred stock, par value $1,350,000, and common stock, $3,291,000. As a preliminary to the reorganization, the Staten Island Midland Railway Company was to increase its present stock, all of one class, par value $1,000,000, to $2,350,000 of which $1,350,000 would be 6 per cent cumulative preferred stock to be used for refunding $1,000,000 par value of 5 per cent bonds, and the remaining $350,000 for capitalizing the matured and unpaid coupons on said bonds par for par. The common stock of the new company was to be exchanged for the common stock of the existing companies at the rate of $85 of new stock for each $100 of the present common stock.

Excluding the overdue coupons, the outstanding securities of the two companies consist of bonds to the par value of $3,308,000, and stock, all common, to the par value of $3,871,750. One result of carrying out this plan of reorganization would have been the increase of $352,000 in funded debt secured by the property, and the increase of $36,520 in the amount of fixed charges, or, including sinking fund for discount, the latter would have been $54,520; and, notwithstanding the reduction of 15 per cent in common stock, there would have been an increase of $769,250 in stock outstanding as the result of creating a preferred issue of $1,350,000. Other changes in a consolidated balance sheet would have been the liquidation of floating debt, $1,038,000, besides $350,000 of matured interest, and an increase in cash of $264,000.

The advantages to be attained by a legal consolidation of the companies were at once recognized by the Commission, but approval of the plan submitted was denied because, as was held, it included features which were not in accord with the New York State statute controlling the issue of new securities by public utility companies, nor in accord with sound financing. The specific objections, as pointed out in the opinion by Commissioner Hervey, were these:

The first step proposed in this plan, viz., the issue of new preferred stock by the Staten Island Midland Railway Company, so far as it involved exchange for bonds now outstanding, could not be approved without evidence that the bonds themselves were