Hudson  &  Manhattan  Railroad  Company
 

1948 Annual Report
 

New York County, it was suggested that the
parties explore the possibilities of an amicable
settlement.

Thereupon, negotiations ensued between coun¬
sel for the Company and for the plaintiffs, in
the course of which it was indicated that the
bondholders would be content with a relatively
nominal adjustment. The Company, recog¬
nizing that litigation would unquestionably
prove burdensome and costly and would entail
the expenditure of considerable time and effort
by the officers and directors which might be
more profitably utilized in the management of
the business, agreed to make an interest pay¬
ment to the bondholders in the amount of 1^%,
of which 3^ of 1% had been authorized for pay¬
ment on April 1, 1948. Accordingly, a stipula¬
tion of settlement was entered into, dated May
12, 1948, and submitted to the Court for its
approval.

Thereafter, a Referee was appointed by the
Court to inquire Into the adequacy of the settle¬
ment, and after lengthy hearings, recommended
that the settlement be approved. On January
7, 1949, an order was made by Mr. Justice Null
confirming the Referee's report and directing
that a judgment be entered in accordance with
 

the stipulation of settlement. On February 3,
1949, a notice of appeal from this order was filed
by the attorney for a group of bondholders.

On Januar>' 21, 1949, the Guaranty Trust
Company of New \ ork. Trustee for the Adjust¬
ment Income Bondholders, moved for a resettle¬
ment of the order in respect to the payment by
the Company of the fees and disbursements of
the Referee and of the counsel for the plaintiffs.
This application is presently pending before the
Court.
 

New \ ork City Ltility Taxes, on which the

City of New York claimed that there was due

in excess of $115,000 of taxes and in-

Taxes    tcrest for  the  period  January   1,   1943

to December 31. 1946, were settled for

the sum of $46,626.94.

Negotiations were also concluded with the
City of New ^ork in connection with Sales,
Compensating Use and Personal Property Taxes
for the period December 10, 1934 to December
31, 1942 whereby the City abandoned its claim
of approxlmateh^ $19,000 allegedly due thereon
and refunded the sum of S2,314.08 deposited
under protest.
 

Miscellany
 

The current market price for a $1,000 Adjust¬
ment Income Bond of the Company is about
$230.   The repurchase and  retirement of such

a bond reduces the Company's debt
Bond           not   only   by   the   face   amount   of

Purchase $1,000, but also by accrued arrear-
Program     ages of interest amounting to $385;

furthermore, from the date of repur¬
chase onward the Company's interest expenses
are reduced at the rate of $50 per annum.
Likewise, the market value of a $1,000 First
Lien & Refunding Bond of the Company Is
about $630. The purchase and retirement of
one $1,000 First Lien & Refunding Mortgage
Bond, in addition to decreasing the Company's
Indebtedness by $1,000 decreases the interest
expenses at the rate of $50 per annum; since
the interest on such a bond if outstanding must
 

be paid on schedule, a repurchase reduces the
Company's cash outia\- by $50 per annum. In
view of the e\'ident advantage to the Company
and with support from the Referee's report in
the Callahan case, the Board of Directors
resumed its bond-purchase program in Decem¬
ber, 1948, and is pleased to report the acquisition
of the following since that time:
Face
 

Kind 01 Bond
 

First Lie
Adj. Inc,
 

& Ref. Bonds-.
5% Mte. Bonds
 

.Im

5406,000
905,000
 

Cost
 

5260,026.25
236,383.75
 

These 1948 and 1949 purchases to date have,
in summary, reduced the face amount of the
Company's outstanding debt b\' $1,311,000 and
eliminated accrued interest on Adjustment
Income Bonds amounting to S348,425; they will