New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-09-07
WHO RAISED THE MONEY
nSR. FINANCE TANGLED.
afr Heroine Gets a Special October
Grand Jury.


--.-anies Of the ACKNOWLEDGEMENTS sys-
car, c0nl laid hare Yesterday afternoon by
-, NJ WINS. special counsel for the Pubic
- Commission. at the hearing of the
So inouirv Mr. WINS was assisted by
IL, scudder. the commissions expert &C
1a-ntant With Oren Root. general manager OF
- New York City Railway Company on the
I'D Mr. wins brought out many details OF the
.s-ero's financial methods
rho hoard of directors of the Metropolitan
..,+ Railway Company voted TO lease the COM
Inv 10 the Interurban Company, now the New
To-a, City Railway Company, for term OF 9''
xears and further by its methods practically IN
- the ratification Of the lease by the stock
toders of the company. This board as MI
Tins had previously shown. had several dummy
s,rectors. who, without owning share Of the
,a,x,s stock qualified as directors. that they
might vote on the lease.
Two At least Of these directors said that they
,,o+ed thus because the terms of the lease pro
,sded that the Interurban should pay S25,e"'No
- the Metropolitan that it might fund its float-
.,g debt and have millions left 10 electrify ana
tetter equip its lines.
district Attorney Jerome asked yesterday Tor
snecial October grand jury. 1t was beleFeo
t+ & was his intention to investigate the trac-
+ior cor,nanies. Mr.. Jerome would not say
- ,rohe the Belmont Ryan merger. Recorder
ucAvov. in Part l, General Sessions granted
this order.
wont of the District Attorney that the puhllc
interests require special grand Jury. II Is OF
6ered that the Commissioner OF jurors uLa"
and summon an additional grand jury Ior &c
tober = 1907.
arr Jerome said yesterday that he had not
bsen officially or formally" informed by Mr.
1vins Of any Of the testimony taken during the
Investigation. Such notice is looked for next
week.
HOW S23oooooo WAS RAISED
Yesterday Mr.. WINS showed how that $1,000
oao mas raised Ii was done in this manner:
The stockholders Of the Metropolitan Street
Railway Company bought by advice Of their ci-
-ectors 9a1s per cent of the stock of the Metro
politan Securities Company. that is 9912 per cent
Of 100000 The Metropolitan Securities
connanv. hence received into its treasury from
The stockholders Of the Metropolitan Street Rail-
wav Company So, ,SS5.O0o. approximately
The Metropolitan Securities Company paid
,zer n the Interur-tan company the S22.6S5.00o
Of the Metropolitan Street Railway stockholders
money plus $4,000 of its own. total Of $685.
0eO 0ON This was done under certain agree
-neuts that were entered into between the Metro
rolitsn Securities Company and the Interurban,
of which the stockholders Of the Metropolitan
Street Railway Company We're not advised. The
Tnterurban as py the terms of the lease. then
handed over the s23. 100000 20 the Metropolitan
Street Railway Company
In other words the stockholders OF the Metro
poltan Street Railway Company themselves fur
nished practically all OF the s2S.0oooo0 when
they supposed they were to receive from the In
terurban company in part payment for the lease.
xypro
for its ratification.
AS TO FUNDS FOR ELECTRIFTCATl0N.
Further results of Mr. Scudder's examination
Of books Of the Metropolitan Street Railway
Company were brought out yesterday. 1t was
shown that officials Of the company had asked
FOR s11000.oo0 for electrification of approx
rnateiv 75s miles Of track But the books show,
and these facts are entered on the record OF the
Investigation that, so far, only 1851 miles Of
line have been electrified. and that the money
has disappeared.
Mr WINS has requested from the accountants
Of the road itemized statements that will show
the exact amount that the road can account for
TIE fact was established that the Metropolitan
had spent s1306o000 allegedy for electrification.
and had electrified under so per cent. of the
mileage il agreed TO electrify for less than
s11.oO0 600.
More sections Of the Penal Code that Mr..
Tvins thinks, if taken in connection with testi-
nony already brought out. Will show ample
cause for criminal prosecution were read at
the hearing yesterday. counsel remarking that
he had overlooked them on the preceding day.
At Chairman Willcox's request Mr.. WINS had
copies Of the three agreements between the
Metropolitan Street Railway Company. the
Metropolitan Securities Company and the Inter
urban Company which he had had entered on
fpA for he
insisted were not actual copies Of the agree
ments themselves compared with copies fur
nished by officials Of the system. They showed
slight differences, and the record cor
rected correspondingly.
MR. ROOT ON THE STAND.
The remainder Of the hearing was taken up
with exhaustive examination Of Oren Root.
especially in regard TO the electriflcation Of the
different lines. Mr.. Root said he did not think
that II would be practicable to take off all the
horsecars. for physical reasons which in some
cases would appear to be permanent. and for
traffic ones in others which should be tenn
pora-y. Mr. WINS asked the witness to fur
nish him with a vast quantity of data in regard
TO ths surface lines.
II was noticed that after Mr.. WINS had had
read sections Of the Penal Code there was a
aasty conference Of lawyers Of the company
including Paul D Cravath. Delaney Nicoll
ar. Auerbach and Mr.. Quackenbush- The con
ference did not last long. but il seemed to be
very satisfactory. as IL ended with burst of
subdued laughter, and for some moments after
ward the lawyers wore broad smiles on their
countenances.
Mr.. Root, when he stepped down from the
stand. smiling. after an examination lasting over
two hours. was greeted with congratulatory re-
marks from the mergers counsel You din
splendidly" You couldn't have done better, y
~ere some of the remarks they made TO him
ea-sr-. as.itt q reading of