Based principally on (a) the average of high and low market values since Jan. 1, 1970, to date of pledged securities; a (b) the depreciated value of equipment and other property as of June 30, 1970, where the title to equipment or other pr erty is the collateral. 2 These loans have been paid in full. 3 The Central of New Jersey defaulted on its loans in finance docket Nos. 21555 and 22640 in March 1967, with unp principal balances of $12,375,000 and $4,620,000, respectively, and on June 1, 1967, the United States paid the unp principal balance on these 2 loans, plus interest of $373,312.50, with funds provided by supplemental appropriation (P lic Law 90-21). Recovery of the loans is now in the hands of the Department of Justice. Accordingly, our valuation of collateral may not in every instance reflect settlements which may have been made by Justice. On Jan. 6, 1967, $600,000 principal amount of collateral pledged in financial docket No. 21552 was released by trus (pursuant to sec. 8(c) of the guarantee agreement dated June 1, 1961) to M-K-T after payment and satisfaction of $600, of the collateral trust notes. On May 11, 1970, $360,000 principal amount of such collateral was released after paymen $360,000 of the collateral trust notes. 3 By its supplemental order dated Dec. 29, 1965, the Commission authorized the substitution of (1) new equipmen be purchased at a cost of $2,731,641, of which $2,386,498 had been expended; (2) $591,000 principal amount of 1st mortg 4 percent series C bonds; and (3) pledge of the railroad's equity in collateral securing the loan in finance docket No. 220 In addition, the above supplemental order requires Monon to pledge $1,000,000 of its 1st mortgage bonds of and w such bonds are authenticated in the future under the provisions of its 1st mortgage. The foregoing substituted collat is in lieu of the $4,000,000 purchase money mortgage on proposed dock facilities initially authorized in this proceec The proposed construction of dock facilities has now been abandoned. • Bonds were pledged in original principal amount of $86,500,000 under the loan agreement collateral was withdr as principal payments were made. The unpaid balance of the loans in finance docket Nos. 20372 and 20397 were assumed by the trustees appointed by court in the reorganization proceedings. The loan in finance docket No. 20397 was paid in full January 1965. The loa finance docket No. 20372 was assumed by Penn Central in December 1968. 8 The New York, New Haven & Harftord R.R. Co. defaulted on its loans in finance docket Nos. 20398 and 21299 in 1961, with unpaid principal balances of $1,375,000 and $13,000,000 respecitvely, and on Oct. 2, 1961, the United St paid the unpaid principal balance on these loans, plus interest of $300,740, with funds provided in supplemental appro tions bill 1962 (H.R. 9169). Under agreement between Department of Justice and the trustees of New Haven R.R. approved by the court in De ber 1965, accrued interest was waived and the principal was to be paid in installments during 1966 and 1967. As of Juni 1970, $1,057,868 has been received and applied in reduction of the outstanding balance. The $317.132 balance wi satisfied by the delivery to the United States of Boston & Providence R.R. bonds upon finalization of the Boston & Provid reorganization proceeding which bonds will be guaranteed by Penn Central, and if the balance is not satisfied in manner, it will become a claim of administration. 10 No securities or other property were pledged as collateral security for this loan. However, New Haven covena that if it should receive any income from certain claims then in litigation and certain other sources, such income sha applied in reduction of the outstanding loan. As of June 30, 1970, $627,900 has been applied against the principal of loan as a result of settlement of certain of said claims. INTERSTATE COMMERCE COMMISSION, BUREAU OF ACCOUNTS, SECTION OF FINANCIAL ANALYSIS-PT. V LOANS RECONCILIATION OF DIFFERENCES IN AMOUNTS FOR SAME ITEMS SHOWN IN ANNUAL REPORT (SCHEDULE 6) TO TREASURY DEPARTMENT AND STATEMENTS FURNISHED BUREAU OF BUDGET BY BUDGET AND FISCAL OFFICE 1 Explanation: Amount paid by United States upon default-no further contingency-therefore not included in Treasury report. Amounts applied against principal of loan in finance docket No. 20398 as result of settlement between Department of Justice and Trustees, and amount applied against principal of unsecured loan in finance docket No. 21299 as a result of settlement of certain claims. Amounts applied against principal of Central of New Jersey loans as a result of income received on collateral and proceeds from maturing Treasury bills. Note: The above differences are due to the fact that the Treasury report (schedule 6, "Supplementary Statement of Commitments and Contingencies") shows the contingent liability of the United States as of the date thereof whereas the statements furnished Budget include the unpaid balance on defaulted loans of New Haven and Central of New Jersey which are still a debt due the United States (even though the lenders nave been paid through supplement appropriations). Such defaulted loans are excluded from the Treasury report since they are no longer a contingent liability of the United States. The CHAIRMAN. Senator Cotton, the Senator from Indiana wanted to know if you wanted to make a statement first. Senator COTTON. No, I would rather wait; I have some questions I want to ask, but my desire is to learn and not to attempt to impart wisdom on this subject for a while. It is a rather complicated situation. The CHAIRMAN. I might say for the record, in the bill that the chairman introduced to revive title V, the only substantial change was substitution of the Department of Transportation for the In 50-934-71-pt. 1- 4 |