New-York tribune., 1906-05-13
EXPECT AN ACCOUNTING
IN SUIT OYER CONDUITs.
Nesr York Telephone Company,s
Assurances Please Officials

Corporation Counsel Delany and Controller
Metz are counting on an early settlement OF the
citys suit against the Empire City Subway Com
pany. Limited, and the Consolidated telegram
and Electrical Subway Company. the city al
leging that the two companies are indebted tn
II IN the sum OF S5.000,0O0
The Law Department assumes that fnasmurb
as the New York Telephone Company. oontroI-
ling the Empire City Subway Company. assured
the city on Friday OF its willingness 10 confer
with the citys representatives and carry out sts
agreements IN good faith it viii see the pro-
priety Of an early adjustment OF the action
brought by the city under the Low administraz
don 10 compel an accounting by the companies
John G. MiIburn representing the New York
Telephone Company. told the Board Of Estimate
and Apportionment on Friday that his company
held the majority OF the stock of the Empire
company which in turn controls all the tele-
phone ducts IN Manhattan. Ex-BOrough Presi-
dent Littleton, representing the Atlantic COM
pany which is asking for franchise. charged
that the New York company had not paid the
city q dollar for its franchise, and that It had
refused 10 show its books
Corporation Counsel DeIsny renewed an ac-
sion on January IL last TO recover $4,000 600,
ana asked the courts to turn over TO the city the
control Of the ducts now held by the subway
company.
The original suit against the subway company
vas brought by Corporation Counsel Rives. but
the company demurred TO the complaint, and
after Tammany returned TO power in 1904 the
demurrer sustained. Mr.. Delany served
amended complaint in January OF last year, and
the case is on the calendar for next month. The
amended complaint is, In part, as follows:
On or about the 27th day OF July 1855 the
Commissioners Of Electrical SubWays in the city Of
with the CONSOLIDATED Telegraph and Electrical
Subway Company in ana whereby the said com
tS % S the R 9a foFe e e2 N N yop anq Sgerb S6T fbe
purpose Of holding and carrying electrical conduc-
Under date Of May IS. 1891. the Board of Elec-
tric2l Control in the city and county Of New York
defendant herein the Empire City subway Com
Tany: by which It was provided as follows:
he second part. remaining after the payment Of
tanning and operating such subways. conduits and
ducts shall exceed 10 per cent upon the actual cash
end equipping such subways. coDduits and ducts.
sSlL-A e paid mo me treasury OF the city OF New
York but Il IN any year years prior the earn
The SECOND part shall not have equaiIed 10 per
ser ,I Iqeh ne @ party o. tie second part shall be
the oiuerence between the actual annual earnings
ING that the py Of the 's seoone paT 5a baSe G
me right 10 earn and receive such 10 per cent for
eaeh ana every year. and that no payments shall
b made 10 the city Of New York out Of such eX-
shah first have actually earned and received 10 per
cent for each year Heretofore And the party Of
Just full and true books Of account vvbich sbsII
SHOW n detail The transactions had by It, and with
Under and by virtue Of the provisions OF the
vded constructed and equipped ana eDfersd f5fo
seSSlon @ 9 o su6"sEs in the streets Of New York
several years last past has been maintaining and
prohts from such maintenance and operation
The complaint goes on to say that the de-
fendant refused to allow its books to be exam
ineG and that the plaintiff never has been able
70 obtain from the defendant or from defend
ants books full, true and accurate statement
OF The actual cost Of the construction OF said
subway conduits, duets, wires, etc, owned ana
operated by said defendant" Il adds that $50
Tag rs plaintiff was permitted 70 make such ex
animation. II was evident that said books and
accounts were kept by the defendant in a false
and fraudulent manner, and with the plain inten-
uon OF deceiving the plaintiR as to the actual
cash cost OF construction and maintenance Of
said subway cOnduits. ducts, wires. etc. and
Income derived therefrom and the amount due
plaintiff under said agreement" Facts which. It
is alleged. show the bad faith and fraud OF the
defendant" are then cited. Some Of these are
Rs follows:
F-rst-The actual cost Of construction IS not
books mat the was done by subsidiary co Ssra
pasnlIes the personnel or location OF which sub
salaTy companies plaintiff has been unable TO
secOnd-First mortgage bonds for such construc-
Ioh N9rk were issued at 30 per cent OF their face
Flert-rs c,,t- oou EoI-soIIudteQ 4eIegfeph and
defendant Empire City Subway company 1ga,tad ny tae
work we're Issued at 60 Der 0 cent Of fbs f1oa
yaine by the said Consolidated Telegraph and
defendant EpT city gabxxay % companyo naDaneo gnta6 Rg 5ae
mortgage bonds is charged to cost Of congtrIefon If1
aJ,s,EgltEstanding the agreement OF the said Con-
Pany furnish the necessary capital not less than
sg'ooI 80 70 build equip. maintain ana operate the
SuDWay6 md Yha
o3pt ~ 3 of such DISCOUNTS on the bonds 50 issued
sihvsS IS CooLsoIioa1ea telegraph and Electrical
Price exceeds the OF s. 10000 charged AGAINST
Third-An allowance OF Is per cent was added bv
s aeie2dant to the pretended cost Of its construc
9 .9n work: such aIloWanee being made to the sub
s.asaTy companies, who actually supplied the funds
a1e 90 the work Of construction.
ourth-In addition 10 unduIy swelling the an
laTent cost OF construction. whereby Il sought 70
actual cost before admitng aR atEsy EBe plant II sfseo i
Teegrssb IN IA ne net esITnlngs said Consolidated
s.s s oetenoant Empire City Subway Company Linn
have been treated by them and aaeb aS tie Mliea s
lLSPer chsrges 70 make against earnings, prior to
slKth-A gross discrepancy in original and present
s : ,s % eonsLInetio9 nile Of single duct appears
oeT+ e n+, ~ Fs.nrnary lsos dividend OF Q per
ant Empire City subway comDsnv TSTtsd o,St ~
re earnings Of 1902 and this dividend was allowed
n95 sgfhoTzed 199s Or issued the last day Of that
one DAY. ~ =" sAisu-iSs Oh'F
The complaint then goes on TO say:
Plaintiff alleges that said partial examination dis
Slosed mar oefenoant had charged against plaintiff
maintenance and construction work which IN Ssef
amount os sueh oxerebsfrsP P4sfg but 5,o the
sesaI ain except by the aid OF this court in this
fie9 ne net annual profits Of the defendant remaining
Fubways have for oa fn gan and operstpg said
6esen5s1f IN Sl aeloSl cash capital invested BY said