Leasing agreements

How did the leasing of equipment by the New Haven work? Typical how long were the leases for and which banks or investment groups participated? Was rolling stock similar to passenger cars also included in a leasing program?

I'm really no expert but an equipment trust is not really a lease per se. Railroads normally financed a lot of their equipment purchases through banks.

For instance, if EMD sold 15 locomotives to the New Haven, the NH would arrange for a bank to pay EMD the entire amount and hold title to the locomotives "in trust" for the New Haven. Under the terms of the trust agreement arranged between railroad and bank, the locomotives would be paid off usually over fifteen years in annual payments. At the end of that time the locomotives would be owned by the New Haven.

The plate you have the photo of would be attached to the equipment. If you have or have access to a Moody's Transportation Manual for Investors, for 1954 or around that time, you can probably find out exactly what equipment was covered by that particular trust, No. 1 of 1953.

Less expensive equipment was often paid for by the carrier. Depending on the carrier's financial position I believe some even preferred to pay cash for locomotives. Roads like the New Haven, sad to say, didn't have the financial resources to be able to do this.

The trust plate on each unit of equipment was like the title to a new automobile which you finance. Railroad equipment trusts were set up so that the railroad got one of the benefits of ownership....depreciation. Trusts generally had low interest rates and the financial institutions liked them because unlike real estate or right-of-way, the equipment trust property is quite mobile and can be moved to another property should the original railroad default. There are very few instances where there were defaults on equipment trusts. One that was always was dredged up was the Florida East Coast's default on some 4-8-2 steam engines. They were seized and auctioned off. When the trust is paid off, the plate comes of the car or engine.