New-York tribune., 1907-11-23
PRAISE FOR THE B. R. T.
HONEST, SAYS MR. IVINS.
Insists, HO5CeUer, That Nassau Com
pdny Is OUercapitali2ed.

william NJ WINS, seeking to discover whether
he Brooklyn Rapid Transit Companv and its co,-
stituent concerns were overca apitaIized turned IN
,esterday in the history of the Nassau FIectri.
company an item appearing variousIy as s6 900 o0O
and 100000 approximately. which he declared
water left in the capitalization Inv Tom Tohn-
son. and acquired bodily by the RrooL1vp Renid
Transit Company.
Colonel Timothy S Williams testifyina before
Tho Public Service Commission, agreed with Mr.
wins that there difference of about Sc oNo on
between the properties of the company and The
security values but he contended that IF this ever
Lad been water that water had been squeezed ont
subsequently r. reduction of capitalization and
fixed charges.
As We figure it out. it appears that at least
@55s.s7 which has worked itself into the cost og
road and equipment represents nothing" declared
Mr.. WINS IN The course OF the inquiry little
further along he said:
Tom johnson and Mr.. voorhees, watered their
securities TO the extent Of So 259oO Then you sub
Eequeutly bought the securities with tnat water in
y, and practically on the same day that water,
instead Of appearing in the capital account or be-
ing justified by anything. carried to cost of road
end equipment
Colonel Williams could not get that view and a
long wrangle ensued, during which Mr. WINS main
fained that the water still stood in the capitaI and
colonel Williams reiterated that a company was
not overcapitalized if its properties were worth
the price paid for them.
Just the end Of the hearing Mr. Ivins brougb+ >
cut that the Brooklyn Rapid Transit Company
which last year showed a small deficit had that
defcit because it kept its accounts honestly It
could. he said, have closed the year with an ap-
parent surplus If It kept its books in the stve
prevalent this side of the river. The Eratifed
railroad official smiled. blushed mildly at this un-
accustomed tribute 10 much condemned concern
ard said that the Brooklyn Rapid Transit Com
pany never had favored the railroad methods en-
ployed in Manhattan
The inquiry Yesterday took IN +be bistor,, ., +lo
Nassau Electric company minutely as that OF
The Brooklyn Union Elevated had been analyzed
the day previous. Just at the beginning Mr. Wins
asked a few questions about the Kings County
Elevated, reoTganized in 1898 and 1899 Before re-
organization there outstanding $lo9Sl 46 bonds
and 81 750.oo0 stock.
In the reorganization the bond issues were scaled
down 10 s5.ooaooo. Common stock amounting to
$4,000 and preferred TO $2S000e0 issued.
ing exchanged for the old stock While this effect
Cd an increase OF $4,000 in the stock issue the
decrease in bonds left net decrease Of SSOaOo0 in
capital. The bonds IS, IN place of 5s
and 6s effecting saving of about $4,000 yearly in
fixed charges.
Colonel Williams said that the net result of
the consolidation Of the old properties consti
ruting the Brooklyn Union Elevated was a reduc-
ton in capitalization OF about S,00ooo, new cash
from the reorganization committee and stock
sessInents amounting to $5oo,Ooo, and reduction
os fixed charges amounting TO s67s.oOO. Also, some
g. $4,000 had been expended improvements in
addition TO the other cash. that with S12,Oo0,000
in the system In improvements the fixed charges
to-day were less by s258oO0 than the old fixed
charges Mr. WINS conceded much of this declar-
ing that the Brooklyn elevated was in condition
10 pay dividends on its common stock. only tho
money was termed surplus and went into the
Brooklyn Rapid Transit Company TO pay for i'm
provements.
Then Mr. Wins turned 10 the Nassau Electric
Railroad Company It's total stock, Colonel Will
Jams said s30O0O,O00, in round figures all
owned by the Brooklyn Rapid Transit, except d few
shares required by directors TO qualify themselves
for the directorate. Even these the Brooklyn
Rapid Transit holds options. On February l., 1892
the Brooklyn Rapid Transit issued S9.50ooo Of its
stock for I26 54l OF Nassau common and $'6OoooO
Nassau preferred. On May 3, 1s99 the Brooklyn
Rapid Transit sold sf2O s1,516.1oO of its stock.
realizing 800 in cash. which went toward the
purchase of the rest Of the outstanding Nassau
electric stock.
That was Brooklyn Rapid Transit stock. now
selling at IS and -" declared Colonel Nlulafns'
somewhat bitterly.
Al that time also the company purchased some
Coney Island & Gravesend stock and three hun
dred shares Of Long Island Traction Company's
stock which. Colonel Williams explained. had
been thorn in the flesh of the Long Island Trac-
tion Company and its successor, the Brooklyn Rapid
Tranist Company. during the entire process Of re-
organization of the Long Island Traction Com
pany." It represented a non-assenting minority in
terest which stirring up litigation, so the COM
pauy took il over in a block with the other Flynn
stocks.
Colonel Williams said that he knew nothing per
Eonslly of the voorhees, reorganization Of the
Nassau electric; this took place just before the
Brooklyn Rapid Transit bought that company. IN
that reorganization, Mr. Wins declared the company
increased their bond issue by 1850 made an en-
trely new issue Of S6,500.0oO preferred stock and
added :25g0eO0 to the common stock, total in
crease Of Sl7.946,96o Colonel Williams said the
Brooklyn Rapid Transit did not take up the pur-
chase of this company IN the spirit of ascertaining
how much of the capitalization was water IL
took II UP tho basis Of its earning capacity,
its f3xed charges, its extnguishment of all its
debts the merger of constituent companies that
formerly il had not controlled and the possibility
~ economy by operating fl in conjunction with
own system and the elimination of what from
business point of view had been constantly
threatening competition with our own lines We
did consider, said he, whether could afford to
give $11.M6OO of our stock for S4,55200 of their
stock after tile reorganization had been perfected"
In the reorganization Of the Nassau Electric ap-
pearcd an item Of $4,000 stock and bonds Of the
United Railroad Company This, said Colonel
Williams, was Tom J.. Johnson. The securities
issued and obligations assumed, said Mr.. Wins.
showed on the books slssl, l36 20, against which