New-York tribune., 1903-06-17
HAD ELEVATED IN VIEW.
SUITS BLOCKED PLAN.
So Testifes " c. Whitney Regard
ing Interurban-M. S. r. Lease.

Railroad. teStt1leo yesterday at the continuation
of the hearing OF the suit Of Isidor wormser. jr-
70 have set aside the lease OF the Metropolitan
street Railway Company TO the Interurban
street Railway Company. declared the stand
.hat the promoters Of the formation OF the
Metropolitan Securities Company and its hold
inr Of the 1nterurhan company contemplated
gaining a controlling interest in the elevated
road with the S30oo0.eo0 of the Securities Com
pany. and that the present suit and other OBJ
stacles prevented the execution Of the plan.
Although Mr.. Schiff said he thought Kuhn,
Loeb & Co. paid s. 200 600 for the rights Of the
original Interurban Company another member
Of the firm declared there was no record of a.
such transaction on the books. These rights
were acquired TO make possible the lease of the
Metropolitan system the plan being suggested
h Paul y. Cravath.
According to Mr.. Ryan's testimony. the plan
vas nearly abandoned soon after it had been
decided on because at a conference between
Nj Whitney Mr. Schif himself and Mr.. Cra-
vath. although Mr.. Whitney wanted the entire
$50 100000 advanced 10 the underwriters. Mr.
Schif thought that the fact that the SS00000O0
was N evidence was sufficient. Mr.. Schiff, fer
Kuhn. Loeb & Co, also wanted the right TO take
al the stock OF the proposed Securities Com
Tany- Mr. Whitney insisted that the stockhold-
ers should have the right take 50 per cent
n il. leaving 20 per cent for the financing firm
Mr. whitney's terms were finally agreed to.
The Interurhan company first appeared on the
scene, ne continued when a company with
legal right to execute the lease TO operate the
Metropolitan was wanted.
Counsel asked the witness what division was
made of the stock of the syndicate. but Justice
Scott ruled that the division had nothing to do
with the points involved in the trial. Mr.. Stick
rey said he desired TO show the connection be-
tween the directors and stockholders of the Nor
of he
Metropolitan Securities Company.
Mr Ryan said he has seven thousand shares
in the Securities company. To his knowledge.
none Of the officers of the Metropolitan Street
Railway Company had any interest in the Inter
urban Company before the execution of the
lease. -
w c WHITNEY TESTIFIEs-
Nj. whitney followed Mr.. Ryan, and agreed
that MI schif wanted to bar the stockholders
OF The railway company from holding shares OF
the Securities company. He continued testifylng
as follows:
81 s &c or s2oo5ca and required
more complete Improvements pro5ec1o, ,a6 eot
50 bad as far support for him went that IN les m
vas better 81 e1 &reeianS and that is the way
strong men 10 70 iTp ~ vas Known to me that Kuhn
Loeb & Co. had taken up q plan 70 sIrengonea n n
question OF per cent OF bringing 10 the support
o,,g5 M - sI;5Do-t 9Ir vreeiand When the Metro
polltan company got an abso!ate eua5antieye % O1
I.e- cent with adequate security. | should nave
accepted the guarantee, even if that mad oeei' al 10
VIII he guarantee there was be the privilege
participate IN 50 per cent OF the equity OF our own
You've got 10 raise so 10000. Wen raise It for
1 sas5Z5fe r aa To q Der cent Of our stock as
privilege, and put III your money on an eQ4aL 4
men WIN Could be brought together in New-York
We M
7ylen those gentlemen who had franchises. in the
feTe5 US The privilege of investing in their seeur
ties il safety for the Metropolitan stockholo
ers They could Just as easily nave ielt us Ie GeC
vated system.
Before letting Mr. Whitney go for adjourn
rnent Justice Scott asked him;
Do you understand that Kuhn, Loeb & Co.
we're TO get 90 per cent of the Metropolitan
Securities Cornpanys stock q bonus?
oh. no. The firm Was TO have the privilege Of
subscribing for 20 per cent Of the total issue OF
stock"
Did not they get anything else?" asked MI
stickney.
! suppose they did" replied Mr.. Whitney,
with laugh. but they did not get it from the
Metropolitan Street Railway Company"
GOT ONLY STOCKHOLDERS SHARE.
Mr. Whitney on returning TO the witness
chair after recess told Of the plan TO get a con-
Hrl
It in contemplation the so 900 600 OF the
securities Company would be additional 10 me
Interurban money, and wouq Pe ed ~ they
lied IIp sl5e9ee0. and hut for the obstacles
T-5es II contempated on might have been accom-
have owned the Manhattan l. or nave reslt f
the money as to increase the transit -
'he island
..f,,,-,ed The Manhattan L'?" asked counsel.
Owned q controlling interest in the stock so
thst the transit facilities OF all New-York could
he improved
The only interest he had in the Metropolitan
Securities Company was what he took as
stockhol6er in the Metropolitan Railway com
;,a,ly the amount allotted him. He got none
Of the allotment OF S6Go0o00 either directly
Ur Indirectly. - e.
Nr Schiff testified that he had charge for
Euhp Loeb & Co. Of the negotiations LOOKING
10 the financing OF the lease.
A cancelled check for 32o0.OUo was put IN eNi-
,ielcc Nr. Schiff had no memory or the trans
srrfor bur said il could not have been 1nade
without his approval MI. Stlckney read me
,,ore II FpatricA Il. Flynn dated January ~.
7t.Os eSsignfrc a. security for The loan All MS
nights ir The properly and franchises of the IN
1erurtan Company.
o-This loan ana assignment was really an ar
rargef12ent Uitn rlynh 70 oO'aiH '''''''' - 'e
e3I'7I;s u rti a arrangement agreed upon to pay
& - 49,. f Irlynn and his associates for the Inter
iTrban rights stocks and bonGSE Al ihlah tiat
amount was maid 7 do not remember no" or ny
o1sybo has those stocks and bonds. etc? A
have recollection. nut assume rt,,2
Us and "'rs assigned 10 'le
Q3st r.aat price, A-ExactIy the price We paid
one ialflioa Two fundred thousand dollars?
Al assume
Afr Guthrie explained that the Securities com com
pany redeemed Nh. Flynn's note for $-V'o''