The sun., 1907-08-21
LAVISH WITH EIGHT MILLIONS
INTERBOROUGH, UNSECC RED, PUT
THEM IN STEINWAY TUNNEL.

Commission That Old Tunnel Company 10
Out of Existence -The Franchise Alone
is an Earnest OF Vast Expenditure.
E.P. Bryan. president Of the Interborough
Rapid Transit Company. on. the stand
yesterday on the occasion OF the resump-
, ton Of the investig CATION into the affairs
Of the local railroad companies by the
Public Service Commission, ,admtted in
effect that his company had spent %. 600, 900
OF it's capital In completing the old Stein
way tunnel under the East River and that
the only security the company had for
the outlay was questionable franchise.
He admitted that the New York and
Long Island Railroad Company. the orig
inal owner OF the tunnel franchise, had
no corporate existence now and that while
the Interborough Rapid Transit Company
owned the stock Of the old company and
consequently the presumptive ownership
Of the tunnel neither asset would be avail
able as collateral security If the Inter
borough company wished TO borrow
money.
Mr.. Bryan incidentally testified that as
president Of the marlborough company
he was receiving a salary Of s35 900 year.
Replying to the questions of William NJ.
WINS. special counsel to the commission,
he said that the old board Of directors OF
the New York and Long Island Railroad
Company went out of existence on January
l last and was replaced by board Of trus-
tees, OF which he was the chairman. This
action, he said. was taken on the advice
Of counsel because Of the belief that the
corporate life OF the old company had
ceased.
In the actions brought by the Corporation
Counsel's Office against the company on
behalf Of the city when effort was made
to stop the building Of the tunnel il was
shown that the old Steinway charter,
according to the terms Of the grant. was TO
lapse il the tunnel was not completed by
January I. 1907. The admission made
yesterday by Mr.. BrvaD that the corporate
existe ence had ended would seem to imply
that the contention made by the cty's
legal authorities is well founded and goes
to bear out the report that the company,
which already has made application to
the commission for the right to operate
trains in the tunnel, has realized that II
will have to pay compensation to the city
for the privilege OF such operation. This
is all that the city sought in the actions it
instituted against the Belmont company.
That the company made every effort to
finish the tunnel before the end Of last
year is we'll known, but moi until yesterday
was il known, when MIR. Bryan acknowl-
edged the fact. that the company had
offered the contractors a bonus Of $4,000
il they would complete the tunnel before
December 81 last. This task the contractors
were unable to accomplish
MIR. Bryan said yesterday on the stand
that despite the large outlay which the
marlborough company had made on the
tunnel no stocks or bonds had been issued
to meet that expenditure. The expense
A. -
Mr. Bryan testified that outside OF the
amount paid for the acquisition Of the
stock Of the Steinway company and the
Sums which the marlborough company
would have 10 spend in the finishing OF
| the tunnel about 81 100000 had been spent
| in construction work and the acquisition OF
! real estate,
The franchise. Mr.. Bryan said was pur-
chased from John Peirce. q contractor Of
this city. who represented the stockholders.
| The price paid for the franchise. accord
! ing to the figures supplied yesterday to the
commission by Mr., Bryan, was S402 ,0s5:
Mr. Bryan estimated that the final cost Of
the tunnel would be about 81. 1856 900.
eAnd the railroad company which held
| the franchise on which that amount of
money has been expended has gone out
| of existencep" Mr.. WINS asked.
We have no president or other officers
outside OF those OF the board OF trustees"
| the witness answered.
| concerned you are performing no railroad
| functions at the present time?"
We are not operating it, was Mr..
Bryan's answer.
Delving into the antecedents Of the old
| Steinway company Mr.. WINS showed that
| the capital Of the company was 500. 900,
divided into 1 900 shares OF 500 each. OF
the total number OF shares <25 were owned
| by the late William Steinway. Mr.. WINS
put in evidence records showing that when
| the estate of Mr.. Stenway was appraised
! in certain legal proceedings Louis Won Bef-
nuth. one OF the cxecutors Of the eetate.
| testified that the executors sold the inter-
| ests Of the Steinway estate In the tunnel
to lawyer named George +. Hartman
This is the stock for which the Inter-
| borough company, according TO the evi-
dence given by Mr. Bryan little earlier
| in the session. paid. more than S<02 900
The value placed on the shares in the legal
proceedings referred to by Mr.. Ivins, by
the appraiser appointed by the court. was
You still have those shares and you
have expended 81. .7s5, 600 plus the S40z 100
that franchise for operation'" Mr.. Twins
asked.
-Yes," answered Mr.. Bryan.
At a meeting of the commission yester-
day morning resolution was adopted re-
quiring the gas and electric companies 20
furnish the board with full particulars Of
their franchise rights, reference TO court
decisions affecting the validity OF such
| franchises copies OF all contracts made
with other companies and many other de-
tails Of the business affairs OF the COM
panies.
The commission also decided at once TO
investigate a complaint received yester-
day from W J. Walsh Of ITO Forty-second
street, Brooklyn. Mr.. Walsh wrote that
three months ago the Kings County Lighting
Company put a new meter in his house and
shortly afterward sent him in a bill for
o on the ground that the old meter vas
and tho only satisfaction he got was threat
to cut of his gas. with the added remark,
well. what are you going to do about it?'
! when he questioned the power Of the COM
| rsny to proceed to this extremity.
This in itself is a small matter Mr..
| Wilcox said, but it is one that calls for an