1 See discussion in prior report for detailed explanation of the method used in computing
the total adjusted earnings of the Terminal and Midland part and of the refunding part
and of the use of these totals. Since the separation of the entire road into two parts was
made solely for the purpose of allocating new fixed interest and income bonds pro rata as
between the Terminal, the Midland and the refunding bonds, the computation of the
totals for such parts has been continued only through line 4 of this appendix.

3 The adjusted earnings of the Passaic and New York division total $857.79. This
amount is combined with unmortgaged assets and included in the figure $2,509.37 on line
1, after first deducting charges on Passaic and New York bonds, $583.33 for the 2 months.
The total so combined is $274.46. The bonds have been purchased by the trustee of the
debtor. It would be improper to credit the unmortgaged assets with any earnings except
the excess over total bond interest, since they were not entitled to any more before the
bonds were purchased by the trustee, and the purchase was made with reorganization
earnings subject to the system mortgage liens. For that reason, in this appendix the sum

of $583.33 representing charges on the Passaic and New York bonds has been excluded
both from the Passaic and New York division earnings attributed to the unmortgaged
assets and, as indicated in footnote 6, from the total system earnings used for purposes of
distribution.

4 The adjusted earnings of the Hackensack and Lodi division is a deficit of $594.19.
This amount is combined with the adjusted earnings of other unmortgaged assets and is
included in the figure $2,509.37 on line 1.
This includes the earnings referred to in footnote 3, the deficit referred to in footnote 4,
and the adjusted deficit of $2,190 resulting from passenger operations between Croxton
and Jersey City shown in column 8 of the table in the report under "Segregation of earn-
ings," but is exclusive of the net earnings of the Susquehanna Connecting which totalled
$1,159 for the 2 months of June and December, 1940. The actual revenue of Susquehanna
Connecting for the 2 months studied was $1,253 (derived from the Erie, which has been
operating the Susquehanna Connecting since 1938 at the rate of 1 cent per ton mile).
Its actual expenses for the year 1940 were $131.14 for maintenance of corporate organization

and $432.84 for taxes levied, or an average of $94 for each 2 months' period. The reasons
for the exclusion of the Susquehanna Connecting's earnings from both the Terminal and
Midland part and the refunding part and from total system earnings, for purposes of
distribution to the Terminal, Midland and refunding bonds, are set forth in the report.
For purposes of their allocation, the unmortgaged assets are entitled to credit for such
earnings. The resulting deficit of the unmortgaged assets, including the Passaic and
New York and Hackensack and Lodi divisions, for the 2 months' period of the formula
application is $1,350.37.

The reason for the $583.33 difference between this figure and the system adjusted
earnings as shown in column 10 of the table in the report under "Segregation of earnings"
is that this figure excludes charges on the Passaic and New York bonds for the reasons
explained in footnote 3.

7 Giving effect to transfer to refunding part of $122,416 allocated to Terminal and Midland part in excess of requirements of Midland bonds.

Taken in connection with conveyance of $55,634 of noncarrier assets.

Based upon the amount of unsecured claims as shown at the time of the submission of the plan, and subject to adjustment on the basis of the final determination of the amount of the unsecured claims.

10 Exclusive of equipment obligations of $452,844.

11 Percentage reflects allocation as to pledged second-mortgage bonds in preceding 11 Percentage reflects allocation as to pledged second-mortgage bonds in preceding column.

D-denotes deficit.

APPENDIX B

Present capital structure, distribution of new securities, summary of plan (including annual charges) and distribution of new securities per $1,000
principal amount of claim

General 5's due Aug. 1, 1940..

Paterson Extension first 5's due

1 The basic amount of the fund is $130,000 through May 1, 1950, and $85,000 thereafter, made up of funds esulting from charges for depreciation of roadway and structures and the remainder from available net income. The $62,000 represents the portion payable out of available net income through May 1, 1950 on the assumption that funds resulting from the depreciated charges will be approximately $68,000 a year.

APPENDIX C

Supplemental order entered at a general session of the Interstate Commerce Commission, held at its office in Washington, D. C., on the 5th day of March, A. D. 1945

Further investigation of the matters and things involved in this proceeding having been made upon petitions filed, and this Commission having, on the date hereof, made and filed a report containing its findings of fact and conclusions thereon, and a full statement of the reasons for the conclusions, which report, together with the prior report herein of the Commission, by division 4, approving a plan of reorganization, is hereby referred to and made a part hereof:

It is ordered, That the report and order of July 19, 1944, of this Commission, by division 4, approving a plan of reorganization for the New York, Susquehanna and Western Railroad Company, debtor, be, and they are hereby, modified so as to approve the following plan of reorganization:

I. EFFECTIVE DATE

The effective date of the plan shall be January 1, 1944. The effective date shall determine the extent to which the claims of present creditors shall be capitalized in new securities, but the plan shall not affect creditor's claims until the new securities are actually issued (or existing securities are actually extended) by the reorganized company under the plan, and the carrying out of the plan, even though after January 1, 1944, shall not require any retroactive change in the operations of the trustee of the debtor, or in his accounts, or in the reports made to the Interstate Commerce Commission, hereinafter referred to as the Commission, or in any other reports or returns for the period prior to the date when such new securities are issued or existing securities are extended. Subject to the approval of the court, the reorganization managers may cause any issue of new securities to be dated, or the existing Terminal bonds to be extended, as of another date than January 1, 1944, but only if the creditors who receive such issue of new securities, or whose existing Terminal bonds are extended, shall receive through payments in respect of the old securities or otherwise the same