New-York tribune., 1907-10-08

srid OF so harmonizing the operation of the sur
face lines and the underground rapid tran
SIT lines as 20 most effectively provide for the
handling Of the passenger traffic Of the city"
TEs committee recommended accordingly
THE INsTERsTATE TUNNEL.
On September IS, 1905. Mr.. Mcdonald entered
into the agreement with the Public Service Cor
poration of New Jersey through Thomas n.
McCaTter, its president. TO build the interstate
tunnel This provided for the formation Of the
Interstate Tunnel. Railway Company OF New
York and the Interstate Tunnel Railway Com
pany Of New Jersey. which should enter into
trafsc contracts with the Public Service Corpo-
ration tie New York City Railway Company
ead tie new subway lines TO be built by Nc
Donald and his associates. Tho financing was
to be as t7llcws:
Bach psJty u the contract was to subscribe
for az least SI,0O0000. being one-half Of S10,-
COCO I-csen: issue Of gold bonds bearing In
.erest ..ot exceeding = per cent. to be created
either ;otntIy OF by the Interstate Tunnel Rail-
way Company Cf New York and the Interstate
Tunnel RAILWAY Company Of New Jersey, or by
corporation formed by the consolidation or mer-
fer {: the corporations or by a holding company
II DO organized. The bonds were TO be secured
either BY direct mortgage lien on the tunnel
GuQ properties OF me unIei railway 1OihPo'iAOS
or the consolidated corporation. or by first
lien on shares representing the entire capital
stock dess directors qualifying shares) of the
companies and the bonds were to be of an
authorized issue not exceeding S15000OOO with
authority reserved to issue additional bonds
hereunder at the rate Of not exceeding S'ooV'-
600 for every additional tunnel.
The stock vas TO be acquired in equal shares
by the two parties, and each was 10 nave the
right TO elect one-half of the directory.
The Erie Railroad Company and the Delaware.
Iackawanna & Western Railroad Company
could become parties by a readjustment OF the
shares.
MDoNALD's OWN PLAN.
This idea, Mr.. Mcdonald testified. was his
own He worked fully year in perfectlng the
details Yet by January 81. 1907, the Metropol-
itan Securities Company had found 1t was un-
ntle 10 carry out its part of the agreement with
him. and he was in a position to sue for breach
o. contract. so the contractor and the company
agreed on a settlement whereby the tunnel COM
nanv's stock was to be returned and subscribers
reimbursed.
a.r Cassatt bought the Public Service Corpo-
ration of New jersey" Mr.. Mcdonald had
heard and he would not stand for another tun-
mel under the river" From the 100000 first re-
ceived Mr. Mcdonald paid TO Edward NJ. Grout
q fee of $4,000 which afterward was repaid TO
him. Mr.. Grout did not care to be mixed up
with either OF the conflicting railway compa-
nies and afterward turned down retainers from
them. Also. Mr.. Mcdonald paid TO Mr.. Vree-
land Mr. Crimmins, Robert A. c Smith, Henry
.. MACEDONIA and Danforth V. Reynolds $1,000
apiece. each mans share as an incorporation
Still another important agreement was entered
Mr. Mcdonald and the Metropolitan Securities
Company, dated January %. 1906, whereby, for
payment Of S150,OO0 and the assumption of
Mr.. McDonald's contracts for work done on the
plan, the company was released from all ar
fangements regarding free transfers, etc.
The agreements by which the s26OooO was
paid were sanctioned by the directors Of the
Metropolitan Securities Company the agree
ments canceIlirg the interstate tunnel project at
q special meeting at which only Messrs. vree-
land Oren Root. Richard w. Meade Charles
3. Warren and Edward w. Sayre were present.
Ssyre is the secretary and treasurer Of the COM
pany
Did you call the attention Of those gentle
men. when you discussed these agreements with
Them 20 the fact that this virtually put an end
TO competition in transportation in New York
city," asked Mr.. WINS. "I did not need 20" was
the reply.
That went without saying. did it?
1T looks that way"
Did you ever talk with any on the Bel
mont side of the fence with regard to this
merger prior TO its going into effect?"
Mr.. WINS, I did not know anything about
the merger until it went into effect and was
on the bulletin boards"
At present Mr.. Mcdonald said he vice.
presi lent and director of the Interchangeable
ropolitan company with five-year contract to
DO what subway work the concern might get.
Meantime work work. he is to get $4,000
year Mr.. Nicol tried to make it appear that
he had done much work already in preparing
plans but, answering questions by Commits