tion of investors. As noted, registrant stated that he has never been engaged as a broker or dealer. Under these circumstances and in view of the nature of the violation we have found, we are of the opinion that the public interest and the protection of investors are adequately served by permitting withdrawal of registrant's registration as a broker and dealer.

Accordingly, IT IS ORDERED, pursuant to Section 15 (b) of the Securities Exchange Act of 1934, that the notice of withdrawal of the registration as a broker and dealer of Louis Ernest Neuendorf be, and it hereby is, permitted to become effective forthwith, and that this proceeding under Section 15 (b) of the Act be, and it hereby is, discontinued.

By the Commission (Chairman Demmler and Commissioners Adams, Armstrong, and Goodwin), Commissioner Rowen being absent and not participating.

Section 15 (b) also provides :

"Any registered broker or dealer may, upon such terms and conditions as the Commission may deem necessary in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the Commission."

IN THE MATTER OF

FREDERICK P. WELCH

doing business as

WELCH AND COMPANY

HARRY C. STODDARD

doing business as

H. C. STODDARD COMPANY

Promulgated August 14, 1953

(Securities Exchange Act of 1934-Section 15 (b))

MEMORANDUM OPINION AND ORDER

These are proceedings pursuant to Section 15 (b) of the Securities Exchange Act of 1934 ("the Act") to determine whether the above named registered brokers and/or dealers willfully violated Section 17 (a) of the Act and Rule X-17A-5 thereunder and, if so, whether it is in the public interest to revoke their registrations.1

These proceedings were instituted by the issuance of separate notices and orders for hearing, copies of which were sent by registered mail to the addresses last furnished by registrants in their registration applications or supplements thereto. The notice sent to Harry C. Stoddard, doing business as H. C. Stoddard Company, was received by him, but the notice sent to Frederick P. Welch, doing business as Welch and Company, was returned to us by the Post Office Department bearing the notation "Moved, left no address."2 Neither of the registrants appeared in person or by representative on the date set for hearing.

Rule X-17A-5 adopted pursuant to Section 17 (a) of the Act provides, among other things, that every registered broker or dealer

1 Section 15 (b) provides in part:

"The Commission shall, after appropriate notice and opportunity for hearing, by order . . . revoke the registration of any broker or dealer if it finds that such revocation is in the public interest and that (1) such broker or dealer . . . (D) has willfully violated any provision .. of this title, or of any rule or regulation thereunder."

...

Our notices and orders were published in the Federal Register of June 18, 1953, 18 Fed. Reg. No. 118, pp. 3510-1.

35 S. E. C.-34-4919

must file with this Commission a report of financial condition during each calendar year. Registrants were specifically notified of the requirements of this rule at the time they were advised that their registrations had become effective. Upon review of the records in these proceedings, we find that each of the registrants failed to file the required report of financial condition for the year 1952 and thereby violated Section 17 (a) of the Act and Rule X-17A-5 thereunder. We conclude also that such violations were willful within the meaning of Section 15 (b).

On the basis of the foregoing, we are of the opinion that it is in the public interest to revoke the registration of each of the registrants. Accordingly IT IS ORDERED that the registrations of Frederick P. Welch, doing business as Welch and Company, and Harry C. Stoddard, doing business as H. C. Stoddard Company, be, and each of them hereby is, revoked.

By the Commission (Chairman Demmler and Commissioners Adams, Armstrong, and Goodwin), Commissioner Rowen being absent and not participating.

IN THE MATTER OF

CHICAGO & WEST TOWNS RAILWAYS, INC.

Promulgated August 18, 1953

REPORT OF THE SECURITIES AND EXCHANGE COMMISSION

This is an advisory report, filed pursuant to Section 173 of Chapter X of the Bankruptcy Act, on an amended plan, dated May 19, 1953, for the reorganization of Chicago & West Towns Railways, Inc., which operates a bus transportation system in some twenty-seven suburban communities and political sub-divisions lying west of the city of Chicago. The amended plan proposed by Raymond T. O'Keefe, Jr., Trustee, and objections thereto have been referred to the Commission by the District Court for examination and report.

It is the conclusion of the Commission that the amount of debt proposed to be outstanding under the plan substantially exceeds the limits of feasibility. In addition, the proposed issuance of 50-year mortgage income bonds, with no provision for amortization and on which interest would be wholly non-cumulative, would further render the plan not feasible, and the Commission recommends that this proposal not be approved.

With respect to fairness, the Commission concludes that the plan meets the statutory and judicial standards in denying participation to creditors having general and unsecured claims junior to the outstanding first mortgage income bonds, and to the stockholders of the corporation. The plan, however, is not fair because of, among other reasons, the proposal to establish a voting trust of up to two years' duration into which would be placed the new common stock of the reorganized company.

We therefore recommend that the plan be disapproved.

I. BUSINESS AND PROPERTY OF THE DEBTOR

The business of the debtor consists of the operation of bus routes in approximately twenty-seven suburban municipalities and political subdivisions lying west of Chicago. The territory is principally residential, although it includes various manufacturing plants and local

35 S. E. C.-CR- -92

shopping centers. The debtor's routes total 105 miles, and passengers from the debtor's buses may conveniently interchange with the lines of the Chicago Transit Authority at a number of terminal points, although there are no transfers issued between the two systems. All motor bus routes are covered by certificates of convenience and necessity issued by the Illinois Commerce Commission.

At February 28, 1953, the debtor owned a total of 166 buses. It also owns land and buildings in Oak Park, Illinois which it uses for offices, garages, and shops, and land and buildings in Cook County, Illinois, part of which is used in its operations and part of which is leased. Other assets of the debtor consist of service equipment, office furniture and equipment, machinery and shop equipment, and bus parts and equipment.

II. HISTORY OF THE DEBTOR

This is the third reorganiaztion in the history of this enterprise. The earliest predecessor of Chicago & West Towns Railways, Inc. was Cicero & Proviso Street Railway Company, which was incorporated in 1889 to operate the first street railway system in the suburbs west of Chicago. In 1913, as the result of various mergers and changes of name, it became the Chicago & West Towns Railway Company. From time to time, commencing in 1923, the company added bus lines to its street railway operations. In addition, it embarked on a program of converting its street car lines to bus operations. The last remaining street car line was converted to bus operations during the present reorganization proceedings.

The first reorganization occurred in 1932 when the company failed to meet the maturity of $2,225,000 principal amount of outstanding first mortgage bonds and foreclosure proceedings were commenced. Pursuant to a plan of reorganization adopted in that proceeding, all the assets were transferred to Chicago & West Towns Railways, Inc., the present debtor. A new issue of $2,225,000 principal amount of first mortgage bonds due July 1, 1937 at a rate of interest reduced to 5% per annum (on an if-earned, but cumulative basis) was allotted to the bondholders. The preferred and common stockholders of the old company were given new stock on a par for par basis.

In 1937, the company was again unable to pay its bonds at maturity and reorganization proceedings under Section 77B of the Bankruptcy Act were commenced. The plan of reorganization confirmed in that proceeding provided for the extension of the maturity date of the bonds to July 1, 1947. Unpaid interest which had accumulated on the bonds prior to July 1, 1937 in the amount of $398,400 was extended without interest to July 1, 1947. The debtor's outstanding preferred and common stocks were unaffected by the plan.