New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-03-09
NO FAVOR FROM Mr.. G ROUT
COMPANY MUST PAY I'LL.
Yearly Rental of 100000 To Be
Enacted. Despite Strike.

Controller Grout yesterday sent to the Inter
borough Transit Company a sharp remindar
that the city's financial interests must be pro
tected by the company in the present strike. ant
that the company's loss on account OF the strik.
would not have any weight with him when tn
company's quarterly rental Of 100000 was a.
on April 1.
The company Is bound to pay the city a ren
tai of about 100000 year in addition 70 tbo
regular interest charge on the bonds" said ths
Controller
The city is in the position Of silent partner
and the company in that of the managing par.
ner. AS Controller do not propose to allow
the managing partner to make a presentrnsn.
on April that viii show a loss to the city and
have him try to justify it on the ground thar
he has had a strike and that the earnings q
the road do not warrant the payment os the
entire sum"
Mr.. CIRCUITS letter says in part:
There seems TO exist a situation yesterday ard
to-day under which apparently the receipts from
the operation OF the subway viii be practically
nil, while the expenses must be enormously IN
creased. IL Is impossible for the city 70 permit
such a contest to proceed at the expense OF the
city. and / therefore notify you that your state
ment and payment due on the first day Of April
next will not be permitted to charge against the
citys account this present loss In gross receipts
or increase in operating expenses
With reference to the ending paragraph OF his
letter. Mr.. Grout was asked how the city gets
the right to determine what items OF expend-
ture the PETERBOROUGH company shall charge as
operating expenses
1T is a legal point" the Controller replied
''The city undoubtedly has the right 10 object
to or at least TO question any items that may
appear as operating expenses. The city, through
the Controller, viii certainly object to paying
the cost Of strike"
The Controller does not agree with the Mayor
that the city has no power to take immediate
possession of the subway. He quoted a passage
from the Rapid Transit act and a passage from
the city's contract with the InterbOrough COM
peny 10 support his position
The Rapid Transit act says that "by resolu-
tion of the Rapid Transit Commission certain
things can be done. One of them is this:
In the failure or neglect Of the contracting
corporation faithfully to observe, keep and fu-
I'll the conditions of said contract. the said CITY
by it's Board Of Rapid Transit Railroad CON-
missioners, may take possession OF said road
and the equipment thereof. and as the agent Of
said corporation either maintain and operate
said road. or enter into contract with some other
person or corporal iOn for the maintenance and
operation thereof retaining the annual rental
and paying over the balance received. IL any
to the first contractor. II the receipts are less
than the expenses and rental. then the first
contractor shall be liable.
Then he asked:
DO you think the courts would hold that the
subway has been operated for the last two days
with the highest regard for the safety Of the
passengers?''