and the Board were held, however, and the Board intimated very strongly its indisposition to approve of such a large increase of capital stock as it did not appear that the cost of construction would justify any such increase.

A number of plans were considered by the stockholders and the directors, the final outcome of which was that on May 11, 1891, the following resolutions were adopted by the board of directors:

"Whereas, authority has been duly given by the stockholders of the company to the board of directors to raise additional moneys for the construction of its cable railroad along its main line either by issuing second mortgage bonds to the extent of $4,000,000, or by issuing stock, or by issuing both bonds or stock (the right to issue income bonds having been abrogated), the question being left by the stockholders to the discretion of the board of directors as to the method to be employed;

Resolved, That in the exercise of such discretion, the board of directors hereby determine that they will not vail of the right to issue second mortgage bonds, but that they relinquish such right provided that authority shall be obtained from the Board of Railroad Commissioners of the State of New York for the issue of common capital stock of the company to the extent of thirty thousand shares of the par value of $100 each, in addition to the twenty thousand shares of the same par value heretofore issued, so that the entire issue of common capital stock of the company will when such additional issue shall have been made amount to fifty thousand shares of the par value of $5,000,000.

66

Resolved, That counsel be directed to make immediate application to the Board of Railroad Commissioners of the State of New York, for their sanction to the issuance of such thirty thousand shares of additional capital stock.

"Resolved, That if such sanction be obtained that the proceeds of as many of the said thirty thousand shares as shall be necessary therefor be applied in defraying the expenditure necessary for the construction of the cable railroad along the main route of this company, including such additional real estate as the board of directors have already acquired or may hereafter acquire for the purpose of such cable railroad.

"Resolved, That the stockholders of this company, in proportion to their respective holdings of stock, as the same may appear from time to time on the record, shall be entitled to subscribe for such stock at such price as the board of directors may determine, but not less than par."

As a result of these resolutions, Mr. Lauterbach, on behalf of the company, applied to this Board for its approval of an increase of capital stock from $2,000,000 to $5,000,000.

An estimate in detail of the cost of construction and equipment, sworn to by Lewis Lyon, president of the company, was also submitted. The total estimate cost of construction and equipment is $4,500,000. To meet this expenditure the company has $1,500,000 of first mortgage bonds unsold, leaving to be raised by the issue of capital stock $3,000,000.

A careful examination of the financial status of the Third avenue road was made by this Board in March, 1885. The cost of road and equipment at that time was found to be $3,722,278.53. Additional sums from year to year have been expended in additions and betterments. In 1888 the cost of the cable road on One Hundred and Twenty-fifth street and Tenth avenue was added, viz., $1,521,540, making the grand total cost of road and equipment to September 30, 1888, $5,316,216.55. The grand total on June 30, 1890, was $5,420,968.82. The total outstanding obligations were: Bonds, $3,500,000; capital stock, $2,000,000, or $5,500,000.

From the above figures it will be seen that the actual cost of construction and equipment is substantially the same as the sum of the present outstanding stock and bonds.

The Board deems that the estimated cost of constructing and equipping the Third avenue road with cable, viz., $4,500,000, is not excessive, and that the method proposed by the directors and stockholders, viz., issuing $3,000,000 of stock and $1,500,000 of bonds, is entitled to its approval.

In view of the above statements, the Board deems that it is justified in approving and does hereby approve of an increase of the capital stock of the Third Avenue Railroad Company from $2,000,000 to $5,000,000 for the purpose of providing funds with which to construct and equip its railroad with cable power.

By the Board.

XII.

IN THE MATTER OF THE APPLICATION OF THE MANHATTAN RAILWAY COMPANY FOR THE APPROVAL OF THE BOARD OF AN INCREASE OF CAPITAL STOCK FROM $26,000,000 To $30,000,000, IN ORDER TO EXCHANGE WITH AN EQUAL AMOUNT OF THE STOCK OF THE SUBURBAN RAPID TRANSIT COMPANY TO CONSUMMATE A MERGER AND CONSOLIDATION IN ACCORDANCE WITH SECTION 79 OF THE RAILROAD LAW AND SECTION 46 OF THE STOCK CORPORATION LAW.

June 2, 1891.

The preliminary steps required by statute appear to have been taken in this application. At a meeting of the stockholders, held at the office of the company on the 27th of May, 1891, 218,408 shares were voted in favor of the increase and none against it.

It appears from papers on file with the Board that the Manhattan company has leased, and it now proposes to merge and consolidate the Suburban Rapid Transit Company with its own company, in accordance with section 79 of chapter 565 of the Laws of 1890, known as the Railroad Law; that the capital stock of the Suburban company, authorized by charter, is $6,600,000, of which but $4,000,000 is to be issued; that to exchange Manhattan stock for that of Suburban stock it will require the applied for increase of $4,000,000 stock of the Manhattan company.

It appears, further, that the Suburban Rapid Transit railroad, including the bridge across the Harlem river at Second avenue, was built by the New Jersey Railway Construction Company. An affidavit of Charles H. Coster, the president of that company, is submitted to the effect that the sums actually expended by the New Jersey Construction Company up to the 1st day of April, 1891, amount to $3,586,170; that for the purpose of closing the contracts for construction, the New Jersey Construction Company has agreed with the Suburban Rapid Transit Company to accept in satisfaction of its claims and demands under the said contracts, an amount of the capital stock of the Manhattan Railway Company, not to exceed $4,000,000. In other words, the Suburban Rapid Transit road, including the bridge across the Harlem river at Second avenue, will be paid for with

$4,000,000 of stock of the Manhattan company. This will give the contractors, apparently, about eleven per cent profit over and above the actual cost of construction and equipment a sum which can not be regarded as excessive.

It is well known that the amount of outstanding obligations of the. Manhattan Railway Company is far in excess of the actual cost of construction and equipment. Under ordinary circumstances the Board would hesitate to approve of a further increase of stock. It deems, however, in this case, as the outstanding obligations of the two companies will not only not be increased, but will be diminished by the sum of $2,600,000 stock of the Suburban Rapid Transit Company, that it can with propriety approve of the increase for the purpose mentioned.

In view of the above facts, the Board, therefore, deems that it is justified in approving, and does hereby approve of an increase of the capital stock of the Manhattan Railway Company from $26,000,000 to $30,000,000, in order to exchange with an equal amount of the stock of the Suburban Rapid Transit Company, to consummate a merger and consolidation in accordance with section 79 of the Railroad Law, and section 46 of the Stock Corporation Law.

By the Board.

XIII.

IN THE MATTER OF THE APPLICATION OF THE SYRACUSE, EASTWOOD HEIGHTS AND DE WITT RAILROAD COMPANY FOR THE APPROVAL OF THE BOARD OF AN INCREASE OF CAPITAL STOCK FROM $40,000 To $150,000, IN ACCORDANCE WITH SECTION 46 OF CHAPTER 564 OF THE LAWS OF 1890, KNOWN AS THE STOCK CORPORATION LAW.

June 29, 1891.

The preliminary steps required by statute appear to have been taken in this proceeding, and at a meeting of the stockholders held on the 13th day of June, 1891, at the office of George B. Warner in the city of Syracuse, 360 shares out of a total of 400 shares were voted in the affirmative; thirty shares were voted against the increase.

An affidavit by J. J. Griffith, a railway contractor, has been submitted, to the effect that the proposed construction and equipment of the road and of its extension will cost not less than $210,000. Another affidavit by R. Griffin, a civil engineer, has been submitted, to the effect that the road and equipment will not cost less than $222,750. The estimates in both of these affidavits are given in detail.

It appears from the certificate of N. S. Williams, chairman, and E. B. Leonard, secretary, of the stockholders meeting, that the amount of stock subscribed for is $40,000, the amount actually paid in is $4,000; that the amount of debts and liabilities of the corporation is at present $17,000.

In view of the above state of facts, the Board deems that it is justified in approving and does hereby approve of an increase of the capital stock of the Syracuse, Eastwood Heights and De Witt Railroad Company, from $40,000 to $150,000. Attention is drawn to section 42 of the said Stock Corporation Law, to wit: "No corporation shall

issue either stock or bonds, except for money, labor done or property actually received for the use and lawful purposes of such corporation, at its fair value, and all stock issued in violation of the provisions of this section shall be void."

By the Board.

XIV.

IN THE MATTER OF THE APPLICATION OF THE BROOKLYN, BATH AND WEST END RAILROAD COMPANY FOR THE APPROVAL OF THE BOARD OF AN INCREASE OF CAPITAL STOCK FROM $500,000 to $600,000, IN ACCORDANCE WITH SECTION 9 OF CHAPTER 140 OF THE LAWS OF 1850.

June 30, 1891.

This application, dated April 22, 1891 (before the new law went into effect), was lodged with the Board.

The preliminary steps required by the statute applicable thereto appear to have been taken, and at a meeting of the stockholders held at the office of the company in the city of Brooklyn on the 2d day of June, 1891, 4,995 shares voted in favor of the resolution and no shares voted against.

It appears from the papers on file with the Board that the original cost of road, when purchased at foreclosure, was, Construction since..

Equipment since

Total cost of construction and equipment.....

The outstanding obligations of the company are:

Stock.....

Mortgage bonds.

Purchase money mortgages.

Total......

$500,000 00 520,251 95

82,276 06

$1,102,519 01

$500,000 00 500,000 00

37,383 00

$1,037,383 00

It appears from this statement that when the increase of $100,000 of stock is allowed the outstanding obligations will be $1,137,383, or $34,864 over and above the cost of construction and equipment. The Board would hesitate on this showing to approve of the increase. On the other hand, however, the floating debt of the company is $109,718.62. The company proposes to issue its stock at par with which to pay this floating debt.

No additional depreciation or water is infused into the stock, but on the contrary the proportion of depreciation to the actual money invested is diminished. There is no other way of obtaining funds except by the issue of mortgage bonds. It appears to the Board that the issuing of stock is a more conservative method than the issuing of bonds under such circumstances.

For the above reasons the Board deems that it is justified in approving, and does hereby approve, of an increase of the capital stock of the Brooklyn, Bath and West End Railroad Company from $500,000 to $600,000, with the proviso, which is made part of this approval, that the stock shall be not issued at less than par, and shall be issued for money only.

By the Board.

XV.

IN THE MATTER OF THE APPLICATION OF THE SCHENECTADY STREET RAILWAY COMPANY FOR THE APPROVAL OF THE BOARD OF AN INCREASE OF CAPITAL STOCK FROM $25,000 to $300,000.

September 14, 1891.

The preliminary steps required by statute have been taken in this case, and at a meeting of the stockholders of the company, held at the office of the company in room 10, Edison building, 44 Broad street, New York city, on the 4th day of September, stockholders owning the entire capital stock of the corporation voted in favor of the increase.

It appears from papers on file with the Board that the cost of road and equipment to date is $60,244; that there is outstanding $25,000 of stock and $30,000 first mortgage bonds; that the road heretofore has been operated at a loss; that the present owners propose to equip it with electric motive power and considerably extend it. An affidavit of William E. Gilmour, the treasurer of the company, is filed with the Board, to which is annexed an estimate of the cost of the proposed extension, construction and equipment, being $291,834.

In view of the above facts the Board deems that it is justified in approving, and does hereby approve, of an increase of the capital stock of the Schenectady Street Railway Company from $25,000 to $300,000, and has caused its approval to be indorsed on the certificates as required by section 46 of chapter 564 of the Laws of 1890.

By the Board.

XVI.

IN THE MATTER OF THE APPLICATION OF THE NIAGARA FALLS AND SUSPENSION BRIDGE RAILWAY COMPANY, FOR THE APPROVAL OF THE BOARD OF AN INCREASE OF CAPITAL STOCK FROM $50,000 To $100,000.

September 15, 1891.

The preliminary steps required by statute have been taken in this case, and at a meeting of the stockholders of the company, held on the 1st day of July, 1891, at the office of Eugene Cary, Niagara Falls, N. Y., 1,760 shares of stock were voted in favor of the increase, and none against it.

It appears from papers on file with the Board that the cost of construction and equipment of the road to date is $48,250.72. An affidavit of W. C. Johnston, a civil engineer, is filed with the Board to the effect that the proposed extensions of the road will in his opinion cost the sum of $69,000. The total outstanding indebtedness of the company is stated at $1,075.

In view of the above facts the Board deems that it is justified in approving, and does hereby approve, of an increase of the capital stock of the Niagara Falls and Suspension Bridge Railway Company from $50,000 to $100,000, and has caused its approval to be indorsed upon the certificates as required by section 46 of chapter 564 of the Laws of 1890.

By the Board.