New-York tribune., 1907-09-25

In RECEIVERS HANDS.
Continued from first page.

pennsylvania Steel Company S3b-3oI % Ioi
rails and track material and to the Deehon
Contracting Company $11.173 81 for work lhe
complaint further alleges that the traction COM
pany has outstanding Indebtedness of some
S2,o8.ooo. which II is unable to meet, ana thal
II has entered into contracts for electriflca-
ton costing S4.O00.O0O; that II would be unaole
TO pay for new equipment soon to be dellVereo'
and that the company is without means TO meet
judgments which may be recovered in seVeral
thousand damage suits now court calendars
The complaint continues:
And your orators allege on information and be.
lief that the only means whereby the defenoaht5S t5
meet its obligations urVier said lease from sad
floating Indebtedness and discharge its current
obligations is by the continued maintenance anc
Tupted use thereof that any suits upon or process
eTnbarrass and cripple 1t. and diminish if not de-
story. its power successfully to operate said sys-
tenn together with all its appurtenauces, rolling
stock and other PT0perfy connected @ t a
the railroads operated by the defendant are so M
the entire street surface railroad system in the
County of New York: that during the last year the
about four hundred million passengers. anc the
porations will exceed six thousand; that II is Of
vital Importance 10 the people Of said county of
New York that said system shall continue TO he
operated as a whole and TO this end it is Of like
that Notwithstanding the fact every effort has
iRdebtedness tt Of the defendan or FOR the exten-
sion of the time Of payment thereof. such efforts
have proved CCesSful, that unless some detI1te
the oneration Of attendants system may be kept
intact great ana severe loss viii be inflicted on all
creditors that TIE credit of the detendaI,l mas pn @
the debts which have matured. and has no reason
able hope Of finding assistance from any quarter
enable 1t TO dc SO. and that the defendant Is IN
ne ne iacIs ao go SCI i5fciai rs-odV fnr the protec-
sEn pF atvarx iyTo-
upon default individual creditors will assert their
I rsnIs am ana he citv m of s,its and race OF
diligence mat attempts vii be mad t 70 seCITe T
upon cars rolling stock. material and supplies in
Will greatly interfere with and ultimately prevent
defendant from the proper IerforT1an'se OF III
and express contracts and will seriously diminish
its earnings: that i VIII be mpossiee 20
fers among the lines in said system Will pe
Dpbiic and most Important and valuable prop
erty dfsmenbered. which might be preserved oy
And your orators allege that an attempt by your
orators to enforce at law their claims as general
creditors would preciptate similar acuon On IN, alf
part other creditors. and this in turn would lea
orators believe can be avoided and the property
erfiad thereto only by the intervention Of court
OF equity and the granting OF equitable reIlel III
Guiding the appointment OF receiver
The cornpany's answer. as presented by MI
ouackenb bush. was a formal admission of the al
ency was admitted; the company Joined in the
request for a receiver and promised to turn
over all its property and accounts to him ano
70 operate the transit system under his direc-
ton.
RECEIVERS TAKE Up TASK.
Judge Lacombe's order appointing Messrs
Joline and Robinson authorized them frnIne-
diately TO take charge OF every detail of the
cornpany's business and conduct it. The court
ordered the parties to the action 20 show cause
on October why the receivership should not
be continued until the litigation was ended.
Douglas Robinson, after his bond was filed.
had a consultation with M Joline. his core
ceiver but neither would make any statement
It is probable that their first work will he TO
select counsel Byrne & Cutcheon. for the cred
itors had nothing TO add TO the formal COM
plant.
Speculation was rife in railroad circles as TO
whether this receivership would be followed by
others. Gossip for the last few days had
grouped the Interborough- Metropolitan with the
New York City Railway Company on that score
The general opinion in the financial district
was that there was nothing in the situation.
now that the one receivershp had been estab-
Ifshed. which would require recevership for
the merger, or for the profitable companies IN
that group.
New York City Railway Company may force the
METROPOLITAN Street Railway Company and the
Third Avenue Railroad into receivership." de
clared one lawyer familiar with the traction sit
uation. The surface roads have been insol-
vent since 1890. a proper reconstruction OF the
balance sheet would in all likelihood show a
deficit OF nearly S25,O10O1. instead of one of
S10og0cDo This receivershp precipitated
by the production by Mr.. WINS of the balance
sheet OF last year. admitting deficit of S1o-
100000 BY their own showing, the income &C
for the year ended June 30. 1906 was in
adequate TO meet expenses: 1t was short just
S3.340.o0O. the amount required to pay dividends
on the Third avenue and the Metropolitan
stocks. This year it short again.
The system was doomed the moment public
ity was made possible through the exercise Of
the powers of the Public Service Commission.
don't know how the difficulties encompassing
the Metropolitan and the Third Avenue viii be
solved. All this reorganization presents legal
questions which can only be settled by the
courts. and il is going to be a complex matter"
NO DIVIDEND SUITS PROBABLE.
It is certain that. while any creditor of the
New York City Railway Company may inter
vene in this action. the receivers will not be
troubled by stockholders of the Metropolitan
Street Railway Company. or the Third avenue.
who might bring suit because dividends guar
anteed to those companies We're passed In the
lease Of the Metropolitan to the New York City
Railway there is a stipulation that stock
holder of the Metropolitan may move take
back the management Of the property from the
City Railway in case the per cent dividend
guaranteed was passed until twelve months
from the date when the dividend should have
been paid. This dividend will be due October