New-York tribune., 1907-10-08
SALVE FOR M'DONALD.
GOT sa5O,OOO FORFEITS.
Inter.-Met. Also Pays Him $50, 900
Year for Fire Years.


way was completed, entered into a contract with
the Metropolitan Securities Company to bid for
and build new subwsys-
Second-That syndicate, consisting OF
thomas = Ryan, {. J. BerWind, Peter A. B.
Widener, Anthony ~ Brady and Norman 3.
Rean was formed TO finance these subways.
ThIrd-That the operating company to be
formed, whose stock " to be controlled by
the syndicate. should agree with the New York
tenn
Fourth-That John B. Mcdonald agreed with
to build an interstate tunnel, 70 be used by the
Erie and Delaware, Laekawanna & Western
railroads. and the cars Of the Public Servcs
Corporation, which should have a transfer sqres-
ment with the New York City Railway Conn
pany,
Fifth-That owing to the objections of Alex
ander j. Cassatt. the tunnel scheme fell through.
Si~th-Ihat the Metropolitan Securities Com
SlOOCO counsel fee to Edward NJ. Grout as a
torteit because the interstate tunnel was NOT
SeVenth-That the Mstropolitsn SeouritIe.
Company paid to John B. Mcdonald s150coo to
prevent trouble because he not able TO
ments entered into. they having been sidetrsc<ed
"nen the merger went into effect
eighth-That this entire S26O,0OO was carried
on the books OF the Metropolitan Securities
Company in the property and franchise account
as an asset.
Ninth-Thst John 3. Mcdonald now has a,
agreement by which he draws $4,000 a year
tor rye yeara from the marlborough MetropoI-
Tenth-That payment of s6oooo-presurna-
oy campaign contribution in the OdsII- Coler
Sampaign-has been carried since 1908 in the
books OF the Metropolitan Securities Company
as suspense item because ~. n. VreeIan3
would not tell how properly to charge t.
A PLAN To FIGHT BELMONT.
Mr. Mcdonald. the man who built the subway
and had falling out with August Belmont De
fore the dirt was off his shovel" contributed
an inside view OF the high finance" transac-i
tions OF the transit system in this city as i'm
Service Commission has brought out.
He was to make possible the physical end OF
vigorous competition to the man who had cast
him aside when through with his services. Ha
was even 10 bring into the reach Of his new.
employers the travelling public OF a big neigh
boring state in such fashion that Belmont his
enemy. could touch little of il. But he did not
know that he merely pawn in much
larger game. That he discovered first when he
learned that a merger had been effected between.
the Belmont and Ryan concerns.
But Mr.. Mcdonald had his agreements. Where
fore he received s25O.OOO from the Metropolitan.
Securities Company 70 prevent his suing for
breach of the contracts he held That these pay
ments were entered on the books of the COM
pany asset did not trouble him any
They must have thought I was an asset he
chuckled.
But he Jared better than that He has a five
year agreement by which the Interborough- Met
ropolitan COmpany-the merger which knocked
out his prospects of building new subways-is TO
pay him $4,000 year. he has done no work
yet TO earn his money since the agreement
"Of course. should prefer 10 work. he says.
Mr. Mcdonald began yesterday with
count of his going over to the Ryan group
L felt that there was a misunderstanding
between Mr.. Belmont and myself in relation to
the carrying OF the work." he said, "as we'll
as some financial misunderstanding. covering
both cases; and went TO the Metropolitan Sc
curities Company because they thought OF build
ing or said they We're going 70 build new svs-
tenn of rapid transit. underground" He had this
assurance from Mr.. Ryan. Mr. vreeland. Mr.
Berwind and Mr.. Wtdener. Later though Mr.
Ryan told him the Metropolitan Securities Com
pany had not money enough 70 build subways,
and that a syndicate outside OF the company,
though made up Of men interested in the COM
pany, would finance the undertakings
So. on March 16, 1905. John B. Mcdonald.
party of the first part" and Thomas F. RYAN.
Norman b Rean, Anthony N Brady, p A r
Widener and Edward J. Berwind parties OF
the second part" made agreement by which
the contractor should bid for future subway,
lines and build them. if the terms and conditions
OF the bid were approved by the syndicate. The
syndicate or an operating company was 10 fur
nish all the funds necessary
THE FINANCING ARRANGEMENT
The financing was to be arranged +b,,z !.
case contract for construction, eoufprasnt sn5i
operation were awarded, on terms approved bv
the syndicate:
Then such contract shall be acquired bv a cor
PoTaJon organized FOR the purpose, hereinaffer--
stock shall be owned by a mOneved co~1T CestISaA pa
which is hereinafter called sthe New S,itvgsJ S i,
pany' The Operating Company SHAH q aSslIv,s y 81
o6sations Of the contractor in respect to the con-
sIauetion s equipment and operation OF such rapid
Transit lines and shall be entitled ali the be1s-
ms Is, and profits resulting therefrOm.
shall be acquired bv the Ne2 Sr 5 S6Sn Cooperation
which shall in payment therefor undertake 70 fnT
may be required 10 carry out said contrsSt ne
New Subway Company shall issue to the contractor
Company and for the moneys to be Furnished by-
o. stt 49, O[ OS Iae syncaIe such aInouns
be approved by the syndicate, which shall also de-
The New Subway Company shall also create an
issue OF bonds to the amount OF $4,000 OOO or such
whtch bonds shall be first hcn upon the enterprise
cT%Isn cr tae Pifdge OF al the stock and other Sc
through such direct lien upon the rapid transit
The amount and terms OF such bonds shall be sub
ject to the approval of the syndicate
All of the stock Of the New Subway Companv so
to be issued 10 the contractor Except Ia per cent
OF i, the common stock , and also the contractors
dicate. which shall furnish the New subway Com
So 500O0 hereinafter mentioned as Shall be re0uirei
Tin addition TO the proceeds OF the sale OF said
deem IL advisable to selD to enable the New Sub
way Company 10 provide the Operating Company
with funds to perform said contract for the con-
struction equipment and operation Of said rapid
The maximum aggregate amount OF money which
the syndicate may be required to furnish herein
the syndicate shall be liable for one-ffth Of that
amount no member being liable for the share OF
the others
No salary ever was agreed on for the con-
tractor