Imágenes de páginas
PDF
EPUB

ORDERED, That said The Cleveland, Painesville and Eastern Railroad Company be, and it hereby is authorized to purchase and acquire said bonds, subject to the terms and conditions hereinbefore provided. It is further

ORDERED, That said The Cleveland, Painesville and Ashtabula Railroad Company make verified report of the sale of said bonds, detailing the sum realized therefrom, and of the disposition of the proceeds.

No. 627—In the Matter of the Application of Detroit, Toledo and

Ironton Railroad Company for Authority (1) to Execute and Deliver and Agreement of Conditional Sale for the Purchase of 200 Box Cars; (2) to Issue $132,000.00 Face Amount of Equipment Gold Notes Thereunder; and (3) to Pledge $50,000.00, Face Amount of First Mortgage 5 Per Cent. 50-Year Gold Bonds of the Railroad Company and Its Interest Under Said Agreement of Conditional Sale, as Security for a Loan. Prayer Granted.

(October 11, 1915.) This day, after due notice, this matter came on to be heard upon the application, filed October 5th, 1915, of the Detroit, Toledo and Ironton Railroad Company, a corporation organized under and pursuant to the laws of the state of Delaware and heretofore duly authorized to do business in the state of Ohio, for the consent and authority of this commission to enter into, execute and deliver an agreement of conditional sale by and between the said Detroit, Toledo and Ironton Railroad Company and The New York Trust Company, a corporation organized under the laws of the state of New York, as trustee, providing for the sale by said trustee and the purchase by said Detroit, Toledo and Ironton Railroad Company of two hundred (200) box cars, and in payment for said equipment to make a cash payment of thirty-three thousand dollars ($33,000.00) thereunder and to issue, execute and deliver one hundred and thirty-two thousand dollars ($132,000.00) face amount of six per cent. equipment gold notes thereunder to become due and payable in twenty consecutive semi-annual installments, six thousand, five hundred dollars ($6,500.00) face amount thereof to be payable on the first day of May, 1916, and six thousand, five hundred dollars ($6,500.00) face amount thereof on the first day of each November and each May thereafter to and including May 1st, 1925, and eight thousand, five hundred dollars ($8,500.00) face amount thereof on November 1st, 1925; and each of which installments maturing on or prior to May 1st, 1925, shall be evidenced by thirteen (13), and which installment maturing November 1st, 1925, shall be evidenced by seventeen (17) nego tiable equipment notes of the said Detroit, Toledo and Ironton Railroad Company of the denomination of five hundred dollars ($500.00) each, numbered from one consecutively to two hundred and sixty-four inclusive, dated November 1st, 1915, and bearing interest at the rate of six per centum per annum, payable semiannually on the first day of May and of November in each year on presentation and surrender of the respective coupons for such interest as they severally mature; to negotiate and sell said one hundred and thirty-two thousand dollars ($132,000.00) face amount of equipment gold notes at the price of the face amount thereof, plus accrued interest, and to deposit with The New York Trust Company fifty thousand dollars ($50,000.00) face amount of first mortgage bonds of the said Detroit, Toledo and Ironton Railroad Company and assign the right, title and interest of the said Detroit, Toledo and Ironton Railroad Company in, to and under said agreement of conditional sale and the equipment covered thereby as collateral security for a proposed loan of thirtythree thousand dollars ($33,000.00), and to repledge the same or any part thereof in the event of any renewal or renewals of said loan or any part thereof.

After considering the pleadings, hearing the evidence and examining the exhibits, and being fully advised in the premises, and it appearing that the execution and delivery of said agreement of conditional sale, the making of the cash payment thereunder, the issue, execution and delivery of said equipment gold notes thereunder and the sale thereof and the pledge of said fifty thousand dollars ($50,000.00) face amount of first mortgage bonds of applicant company and the assignment by said applicant or its right, title and interest in, to and under said agreement of conditional sale and the equipment covered thereby, as collateral security for the proposed loan of the thirty-three thousand dollars ($33,000.00) required to make the cash payment under said proposed agreement of conditional sale, will secure to the applicant company the use of certain rolling stock and equipment presently necessary for the improvement and maintenance of its service and the prosecution of its corporate purposes, the commission is satisfied that the prayer of said petition should be granted. It is, therefore,

ORDERED, That said Detroit, Toledo and Ironton Railroad Company be, and it hereby is authorized to enter into, execute and deliver an agreement of conditional sale substantially in the form

of the agreement of conditional sale annexed to the petition herein and marked “Exhibit A,” which said “Exhibit A” hereby is made a part of this order by reference. It is further

ORDERED, That the said Detroit, Toledo and Ironton Railroad Company be, and it hereby is authorized to issue one hundred and thirty-two thousand dollars ($132,000.00), principal sum, of equipment gold notes, bearing interest at the rate of six per centum per annum, and that said equipment gold notes be sold for the highest price obtainable but for not less than the par value thereof, plus, accrued interest, it being the opinion and finding of the commission that the money to be secured by the sale of said equipment gold notes is reasonably required for the proper purposes of said corporation. It is further

ORDERED, That the said Detroit, Toledo and Ironton Railroad Company be, and it hereby is authorized to pledge fifty thousand dollars ($50,000.00) principal sum, of its first mortgage bonds and to assign, as additional collateral security for said loan its right, title and interest in the equipment to be secured under said agreement conditional sale, for a loan of thirty-three thousand dollars ($33,000.00), and to repledge the same, or any part thereof, at any time or times hereafter in the event of any renewal or renewals of said loan or any part thereof. It is further

ORDERED, That the sum secured by said loan shall be used as the initial cash payment for two hundred (200) box cars and the proceeds from said equipment gold notes as the payment for the balance of the cost of said equipment to be acquired by applicant pursuant to the terms of said agreement of conditional sale, nor shall said moneys be used for any other purpose whatsoever. It is further

ORDERED, That said Detroit,. Toledo and Ironton Railroad Company make verified report to the commission of the acts taken pursuant to the authority herein conferred.

CALENDAR October 25

1:30 p. m.--Argument in Sylvania Home Telephone Company. vs. Berkey Farmers Mutual Telephone Company.

2:00 p. m.-Application for rehearing in Masi et al vs. B. & 0. R. R. Co October 26

1:30 p. m.--Edgar Ervin, vs. Ohio Fue! Supply Company. October 27

9:00 a. m.- Whitaker-Glessner Company vs. V. & W. Ry, Co. October 28

9:00 a. m.-Ohio Electric Railway Company vs. C. H. & D. Ry. Coni

pany, et al. October 29--

1:30 p. m.-Protests against new straw tariffs, suspended.

ATTORNEY GENERAL

Blue Sky Law, Sections 6373-1 et seq., G. C.: Legislative Intent

Was to Regulate and Restrict the Sale of Securities, Thus Protecting the Public, by Two Methods: The Licensing of Dealers, and the Requiring the Certification of Securities by the Superintendent of Banks, as "Commissioner"-Before the Certificate May Issue it Must Affirmatively Appear not Only “That the Law Has Been Complied with and That the Business of the Applicant is Not Fraudulently Conducted,” But Also “That the Proposed Disposal of Securities is Not on Grossly Unfair Terms,, and That the Issuer of Securities is Solvent.”

No. 905—(Opinion Dated October 8, 1915) Honorable Harry T. Hall, Superintendent of Banks, Columbus, Ohio.

Dear Sir: I have your letter of September 9, 1915, in which you set forth in full a copy of a letter received by you from Mr. George B. McKay. This letter is very long and, stripped of verbage in the way of argument and statement of business prospects, reveals the following state of facts:

George R. McKay holds a contract with The Associated Investment Company to sell all of said company's capital stock upon an eight per cent selling commission basis. McKay represents that the Associated Investment Company is in prosperous condition, paying good dividends, and that he has already sold $150,000 of its stock under the terms of his contract. His anticipated net profit for selling the remaining $850,000 of its capital stock is $44,000, which he has fixed as the value of his stock-selling contract.

A corporation known as “The Investment Securities Company" was incorporated, presumably by McKay himself, with an authorized capital stock of $10,000 which has since been increased to $100,000. Its purpose is to take over McKay's stock-selling contract and to develop an organization for the purpose of handling the sale of the stock of the said The Associated Investment Company, and of other corporations.

McKay sold and turned over to the Investment Securities Company his stock-selling contract with The Associated Investment Company, and received in consideration all of its capital stock,

amounting to $100,000 par value. Thereupon he (McKay) voluntarily and without consideration turned back to the said The Investment Securities Company stock of the said company to the amount of $34,000 par value, with the understanding and condition that such stock is to be sold at such price as will realize $25,500 net, which amount is to be used by the corporation in building up a selling organization and as its working capital.

McKay represents that the anticipated profit of $44,000 which will be realized from his stock-selling contract with the Associated Investment Company, which he has turned over to the Investment Securities Company, plus the $25,500 to be realized from the sale of the said $34,000 of capital stock of the Investment Securities Company, will place in the treasury of the said Investment Securities Company the sum of $69,500, thus making all stock actually worth $69.50 per share.

Based upon the facts above set forth, you request my opinion as follows:

“This department asks the opinion of the attorney general's department as to whether or not, under the circumstances stated in the letter of Mr. McKay, this issue of $34,000.00 of the stock above mentioned, should be certificated."

In enacting the provisions of the Blue Sky Law, Sections 6373-1 et seq. of the General Code, the General Assembly adopted two methods of accomplishing its purpose of restricting and regulating the sale of securities in Ohio, and thereby protecting the purchasing public: 1st, by requiring dealers, with certain exceptions, to be licensed. 2nd, by requiring the certification of the securities by the superintendent of banks, as "commissioner," with certain exceptions, before the same can be sold in Ohio. The law attempts to protect the public not only by eliminating dishonest and irresponsible agents or dealers, but also by preventing the issuance and sale of unsound or worthless securities,

Sections 6373-14 and 6373-16 of the General Code are the sections providing for the investigation and certification of the securities and are in part as follows:

“Section 6373-14. For the purpose of organizing or promoting any company, or assisting in the flotation of the securities of any company after organization, no issuer or underwriter of such securities and no person or company for or on behalf of such issuer or underwriter shall, within this state, dispose or attempt to dispose of any such security until such commissioner shall issue his certificate as provided in Section 6373-16 of the General Code, which shall not be done until,

« AnteriorContinuar »