New-York tribune., 1905-01-18
CITY SUES THE GAS TRUST
1T DEMANDS Sc. 900. 900.
Wants Al Electrical Sub1oay Ducts
Says Contract Is Broken.


amended complaint of the city against the EN-
pire City Subway Company, the subsidiary cor
poration owned and controlled by the trust
This complaint, under Mr. Delany's SUPER
vision, was drawn by Assistant Corporation
Counsel Burr. II demands the return of So. .O00.-
900, which, under the terms of the original
agreement the Corporation Counsel contends,
is due the city. and II asks the courts to order
turned over to the city for its sole all the
electrical subways. conduits and ducts. the
ground that there has been a substantial failure
by the company to comply with the terms Of
the agreement made with the city when its
franchise granted by the legislature. The
possession Of this plant. if the demands in the
amended complaint are granted will put the city
in q position to furnish its own light at mini
mum cost.
The new part OF the amended complaint
served on the subway company is the applica-
ton for order asking that the defendant turn
over 10 the city the subway system. The Trib
une on December l told in detail about the
status Of the suit and the intention of the Cor
poration Counsel TO press IT. The original suit
was brought by Corporation Counsel Rives at
the instance Of the Board of Estimate in the
Low administration. Mayor Low, Controller
Grout and President Fornes as a special COM
mittee, reported the alleged failure of the
subway company to live up to it's agreement
with the city. Then Mr.. Rives filed the COM
plant, against which n demurrer was sustained.
The Empire City Subway Company's possession
Of the subways is regarded in Wall Street as the
key TO the lighting situation in this city.
THE COMPLAINT IN DETAIL.
The complaint is filed with the Supreme Court
for the County OF New-York It sets forth, in
part. as follows:
- On or about the 27th day of July 1886 the
Commissioners of Electrical Subways in the city of
NeW-Nork duly entered into contract with
G m d Ied IeegIaph & and Electrical suowaX
- 70 oqg; eqLiP ZIP malptaln ma and operate su6ways IN
holding and carrying electrical conductors.
rf nder date Of May To- 1881 the Board Of EleG-
also duly made and entered into contract with the
pany by which it was provided as follows:
-, NheneEeT the net annual pronts OF the party OF
the reasonable and necessary expenses of main
tanning and operating such subways conduits and
ducts shall exceed 10 per upon the actual
cash capital invested by 1t, in providing construct
ing and equpping such subways.. conduits. and
ducts then the excess OF such profits over 10 per
cent shall be paid into the treasury Of the city Of
NeW-York; but IT, in any year or years prior 10
the earnings of such excess the earnings Of the
per cent then the party OF the second part shall be
nrst entitled to recoup itself out Of such excess for
and the said 10 per cent the intention thereof be-
ing that the party OF the second part shall have
be mad 90 70 b it 81 8 wv ~ d R9s nF icb l @
of earnings until the party Of the second part
shall first have actually earned and received 10 per
cent for each year heretofore. And the party of
the second part shall and viii al AL times keep
show Ia detail the transactions had by it. and with
"T2I9 tie S same m We're r Of the rrosons o, the
foregoing statutes and contracts defendant pro-
vided, constructed and equipped and entered into
for the purposes therein contemplated, and for
several years last past has been maintaining and
profits from such maintenance and operation.
The complaint goes on to say that the de-
fendant refused to let it's books be examined
and that the plaintiff has never been able to
obtain from the defendant or from defendants
books full, true and accurate statement Of
the actual cash cost of the construction OF said
subway conduits. ducts. wires. etc. owned and
operated by said defendant" 1t adds that, $50
far plaintiff permitted 10 make such ex-
animation, it was evident that said books and
accounts were kept by defendant in false and
fraudulent manner. and with the plain intention
Of deceiving this plaintiff to the actual cash
cost Of construction and maintenance Of said
subway conduits ducts, wires, etc, and the in
come derived therefrom and the amount due
plaintiff under said agreement Facts which,
it is alleged, show the bad faith and fraud OF
defendant" are then cited. They include the
following. given in part:
ACTS OF BAD FAITH CHARGED
Ffrst-The actual cost Of construction is not
books that the work was done BY subsidiary com
sidary companies plaintiff has been unable TO
second-First mortgage bonds for such eonstruc-
ton work were issued at 90 per cent Of their face
value by the said Consolidated Telegraph and
defendant Empire City Subway Company. Limited,
and second mortgage bonds for such construction
value by the said Consolidated Telegraph and
Electrical SUBWAY Company ana assumed ta6 6y tne
and the par value Of all such first and second
mortgage bonds is charged TO cost OF construcGon'
solidated Telegraph and Electrical Subway company
70 furnish the necessary GaPlta mo 4l operste h
said electrical subways and condults and the
by the Consoiidated Telegraph and Electrical Sub
way Company Limited as 6aT aoo OF so s aeans9
Third-An allowance OF 15 per cent was added by
tion work. such allowance being made to the SUB
sidiary companies, who actually supplied the Iunds
Fourth-In addition unduly swelling the ap-
parent cost Of construction whereby IL is sought TO
Of the actual cost, before admitting the plaintiff
10 participate in the net earnings SAID Consondated
this defendant Empire City subway Company Lin
have been treated by them and each of them as
proper charges TO make against earnings prior TO
sixth-A gross discrepancy in original and present
cost OF construction mile OF single duct appears
Sc s4venth-In e February 1903 dividend OF per
cent on nding stock was declared by defend
GmP1s sTs @ 1902 @n& hs dividend Was allowed Ho9 81
and paid holders Of s2s7.0lo Of stock which was
year thus disposing OF s2e 200 OF net earnings in
favor of stock which had been in existence only
one day.
The complaint then goes on 20 say:
Plaintiff alleges that said partial examination dis
closed that defendant had charged against plaintiff
large sums claimed to be PAID Go cut t9r ipterest
should be chaTged against plaintin, but the