New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-07
CHARGE S3.S40,OOC FRAUD
cT4TE TO INVESTIGATE.
hudson G.. Wall Com plains against
VI. s. II. Securities Issue.

-oyernor htSsins mas instructed the state
-.srosd Commission 20 investigate certain al
- fraudulent issues of securities by the Met
is.g,an Securities Company and the New-York
~. hallway Company. The instructions were
"a in accordance with a complaint received
enc Governor last month from Judson c.
all Of Brooklyn. who is a well known curb
broker.
The allegations are made I'm regard to an issue
=. si5 OaOoe0 Of ten-year notes by the Inter
hon Street Railway Company. which subse-
.,,,lv changed it's name 10 the New-York City
c,rae, Railway Company. In 1902 the Inter
.bs, authorized an issue OF S15oooO0o OF 4
,er cent ten-year notes. These We're taken by
1-,,rn Loeb & Co. and the Morton Trust Com
ANY vas trustee In the charges fled with the
.,ovsrnor Il is alleged that in It's repor: TO the
r,.,e Railroad Commission the company said
- e 345ogo of these notes were issued at a
s,.,onnt Of so per cent. while the discount
:. entire issue wss charged under the sched
,,le ~ liabilities IN the annual report for 1903 at
e. 5ao0al In the annual report for 1904. it is
ia the statement is made that only S6G0. 900
~ .bese notes are outstanding. while under the
,.s.er,eut for cost Of road and equipment the
sss,oypt for the entire issue again appears at
81 10000
The complaint calls attention to the discrep-
sncV between me amount. OF me NOTES lsSuSo
and the discount in the original statement. and
calls attention also. TO the amount OF the notes
outstanding as given in the 1904 report, and the
continuance Of the discount charge in another
,ortion O. the report It is charged that
fraud has been committed and that there was
tir rske-of for somebody in the transaction.
Near the end Of February Mr. Wall received
the following letter from the State Railroad
Commission:
Your letter Of the 23d inst. to Governor Hig
gins relative TO the report Of the Metropolitan
Street Railway Company for 1903 and 1904 has
been referred 10 this Office by the Governor
with instructions that the matter be investi-
Gated by this board. We have written the COM
ranv on the subject and the matter will be in
vestigated by this board. the result of which we
viii inform the Governor and you.
The letter is signed by ]. R. Kennedy, secre-
tary 10 the board.
The Railroad Commission communicated with
railway authorities receiving a reply inclosing
explanation from Charles S. Ludlum. controller of
2: ~ N'"-'''A CITY Railway company IN ""''n ne
It is evident that Mr.; Wall refers to the 2 per
cent deoenlIe n9les OF ne "a. oa o al
fT the Metropolitan Securities Company az 20 per
cent Tie discount Of 50 per cent on these notes
has never been charged against the Metropolitan
f las ever bS reported as % charge against that
company. IL was. however. charged against the
York civ railway f y Company Comp ''''' ''
NJ Ludum explains that between January So
ls0 and December 81. 1853. s9S24.00 par value of
these notes issued the Metropolitan Sc
curites COMPANY and redeemed. The profit TO
he Metropolitan Securities Company on these
notes amounting TO s. 7s7. 300 he said. was taken
Up by that company when the notes were redeemed,
and the item still appears its books.
On January Il. 1864 $4,000 par value additional
o ne notes was issued TO ne Mstropontam S'e-
represented the only debenture notes outstanding
and was reported by the New-York City Rail-
way Company
II is explained that in the statement to the Met
rop0tsn Securities Company stockholders under
date OF January %, 1906, the above profit or
&7sl.au did not appear. inasmuch as il was a
transaction between the two companies, being a
charge against the New-Hork City Railway COM
Iany franchise and property account ana cleult
10 The Metropolitan Securities Company.
A director of the New-York City Street Rail-
way Company said last night that the charges
made 10 the Governor against that company
could be satisfactorily explained. He had no
doubt that they had been explained already, he
said He would not attempt to go into the
figures. as Mr. Nreeland the man TO speak
for the company. but he knew that no fraud
had been committed attempted. This d.
rector doubted that the Governor had ordered
investiga ton Of the New-York City Street
Railway Company. He said that he cOnsid-
cred Il more probable that i'm the usual course
Of procedure the Governor, receiving the
charges had turned them over 10 the State Rail-
road Commission. and the commission would
Get on them
Nr Vreeand was in Washington yesterday