New-York tribune., 1907-10-15
RAILWAY SOLPE ENI.
Dir. Untermyer admits N, Y. C. Co.
ODerated at Loss, HO1ceOer.

Samuel Untermyer. in his argument oefore
Justice seabury in the Supreme Court yes'er-
day seeking to have denied the motion OF AL
/ +orra,, c,aneral Jackson to dissolve the New
York City Railway Company. made the state-
ment that this concern was solvent UP 10 the
time of the federal recevership, although rur--
ming at a loss. It became insoIvent "tem-
porarilv" he maintained. when it failed re-
Gently to negotiate much needed loans
Justice Seabury took his arguments under con-
sideration. and will allow both sides to submit
briefs.
Mr. Untermyer appeared for the railroad
company. Attorney General Jackson. ex-senator
Mackey and Herbert Limburg appeared in sup
port of the Attorney Generals motion for the
appointment of receivers. which motion alleged
that the federal receivership was collusive and
that those receivers were without proper juris
diction
The federal courts hadd full jurisdiction in
this case. Mr. Untermyer contended. Besides
that he said. the condition of the affairs of the
New York City Railway Company and the
Metropolitan was so misunderstood as to be al
most incredible and the Attorney General must
have been misled.
"All the reports show that there was a def
cheney the cost OF the operation of the
company, not that its liabilities exceeded its
assets at all" said the lawyer I'VE will submit
affidavits showing that in Septembe. 1906,
our assets exceeded our liabilities by between
ST.. 100000 and S6.000,00o.
rs person who has S5,O0O,OOo or S6,Oo0,00o
in his pockets over all his debts insolvent be
cause he has for some time been conducting
business at a loss? The report of this com
pany for 1906 shows liabilities of S12,000,G00
and assets of $17OO0OOo."
Last year" said Mr.. Untermyer. "the receipts
from passenger traffic decreased $6OOOO0, "hhe
the operating expenses increased that amount
Likewise the company had incurred a liability
of 81 000,0 900 for electrihcatOn of its lines
Mr. Unter1nyer submitted affidavit by Mil
ton G. Starrett. an engineer of the New York
City Railway Company that the expenditure or
s245000 was fair for grder rail construction
on the oath street line. and that the cost or
S647000 for the underground electric system
of the road from saith street 10 Tenth avenue,
thence TO 42d street, was also fair. He made
similar statements with reference to the 23d
street road and said the change of motive
power cost $I.O11.O0O. while the Attorney Cen
eral had argued that $373.4O0 the cost of
the work. This sum, Mr.. Starrett says, was for
continuous construction.
D. Clifford Moorehead secretary and treasurer
of the company, in an affidavit denied that the
lease of the Metropolitan to the New York Cl'y
Railway Company was lin any wise fraudulent.
wasteful mprovident or peglectfuL'
Mr. Untermyer argued that as the Metropol-
itan company was the chief creditor OF the New
York City Railway Company. and as their IN
terests were inextricably confused, it had the
right TO intervene in the federal court and ask
for the appointment of the same receivers so us
interests would be protected
Ex-senator Mackey maintained that the re-
ports of the company 10 the Railroad Commis-
sioners since 1902 showed that its liabilities
then exceeded its assets and that its AFFAIRS
had been growing steadily worse since.