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MR. HANRAHAN:  Not definite.  Mr. Dykes has been in charge of the negotiations on that rather than me as counsel, but I think they are working very diligently not only on that but in trying to get DC-6s too.
MR. BARNITT:  I think we would need something.  One other thing that I have looked into for a short time is that we are operating DC-4s that are non-competitive to the superconsellations and stratocruisers and DC-6Bs that we are competing against, and we are still charging the same fares.
At the present time our load factor is up pretty good.  This is our busy month on the New York to Bermuda run and International Airtransport Board sets our fares so that we have to charge that fare, but I ave seen recently where they have allowed two South American companies to charge lower fares because of DC-4 equipment against the other pressurized equipment.
As long as our load factor stands up, I don't think it is a major problem, but I think as the summer months start dragging on, our only way to keep the load factor up is to reduce fares.  I think it would be a good idea if our Board of Directors investigated and saw if they could get that through IATA.
MR. HANRAHAN:  We certainly will.
MR. SILVER:  One other question I would like to ask -- if the Board has any information on why they believe National did not submit an offer.
MR. HANRAHAN:  Other than the telegram that was in the public press that we released, none.
MR. SILVER:  And would you refresh my mind and maybe some of the rest on the contents of that telegram?
MR. HANRAHAN:  They felt that they c ouldn't bid with the control question undecided, in substance.  That is not the exact verbiage.  
MR. SILVER:  When this is finally analyzed and a decision from the Board come out on it, the bid would then or would not then be accepted from National if they felt they wished to make one at that time?
MR. HANRAHAN:  Definitely not.  The time has expired for the receipt of bids.
MR. SILVER:  Thank you.
MR. HORWITZ:  Mr. Hanrahan, I just want to get one thing clear.  In respect to these comments about the relative merits of the old three for two or the two for one, while it is true that the market value of Eastern stock has substantially increased since that time, I think it should also be noted that the only requirement upon Eastern at the time this transaction takes place is that its balance sheet be the same or approximately thesame as its b lance sheet for the year endin December 31, 1953.
Observing Eastern'srecent history, you will find, I believe, that the increase in the market value of their  stock has taken place in the year 1954, based upon their earnings statement for that period of time.  However, they have the right, as I understand it, to deliver a company which reflects the balance sheet as of December, 1953 and as a consequence the s tockholders of Colonial may not share in an y of the benefits which Eastern stockholders might receive for the year ending December, 1954, for the reason that under the terms of the agreement it is possible for Eastern to make distribution to its stockholders so long as it leaves the balance sheet in substantially the same position as it was for December, 1953.
That modified, I think, to a substantial extent the impression that the market value of Eastern stock is being passed on to Colonial stockholders.
MR. HANRAHAN:  All I can say is I think your statement is highly speculative and open tot he greatest conjecture.  I can't tell you what Eastern's management will do.
MR. HOROWITZ:  I will say this, that I didn't attempt o be speculative.  I think as an attorney the agreement is drawn up which would permit this.  As to whether or nor Eastern will do it, I can't say better than you -- perhaps other people can.  But their right to do that is apparent.
MR. HANRAHAN:  I think Mr. Cameron putshis finger on it.  The negotiations to working out an agreement st rted after the turndown by President Eisenhower of the decision of the Civil Aeronautics Board, which I think came down the first or second of March, 1954.  So all our negotiations had to do with a 1953 balance sheet.
In other words, what I am trying to say is if the agreement was entered into  in 1955, it would be what  the balance sheed showed for the year '54.
MR. HORWITZ:  As I understand it, this agreement was entered into in 1955.
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