The sun., 1907-08-22
WON'TREORGANIZE NTER.MET
But THERE'S A PLANTO CUT DTVI.
DENDs on METROPOLITAN

And on Inter-Met Preferred said to he
aLoophoie In Lease OF Metropolitan TO
N. Y. CITY railway 20. by which the
Per Cent. Guarantee Can ne Avetdcd.
With Interborough- Metropolitan pre-
ferrcd q per cent. stock. selling below 20
and Metropolitan Street Railway. q 7 per
cent. stock. selling around 10, the financial
district has teemsd this week with reports
Of either a reorganization OF the Inter-
borough Metropolitan Company or q sus-
pension or reduction Of dividends on In
terborough- Metropolitan preferred and on
one at least Of the lnter-Met subsidiary
companies Up to yesterday. when Metro
politan Street Railway sold down to s.. these
reports have been vague. They had been
prompted probably by the low quotations
rather than by any known development.
1t became known yesterday that there
10 under consideration by the dominant
men in Inter- Met no plan for either re.
organization or a reoeivership for that COM
pany. Such a proposition. it was said in
well informed circles. has not even been
considered by the directors or other men
influential in the company. They consider
the organic zation sound and zee no good
reason why it should not he maintained
intact
On the other hand there is excellent
reason for asserting that there is now under
serious consideration, IL indeed II has not
been practically decided upon. a plan for
the reduction OF the dividend charges Of
the dominant company to such an extent
that there will be no question thereafter
Of its earning a substantial surplus over
dividends.
The plan. il was said contemplates no
change in the dividends on Third avenue
stock, which. like the others, has latterly
sustained a severe depreciation in market
values. As far as could be learned yester-
day the plan involves the reduction or
suspension Of the dividend on Inter-Met
preferred and Metropolitan. The former
can be cut or passed at the will Of the direc-
tors. A change in the latter would involve
an interesting question affecting the or
gsnization Of the entire structure Of COM
psnies.
The Metropolitan Street Railway Com
pany was leased in 1902 to the New York
City Railway Company. then newly or
ganized. which soon passed into the owner
ship of the Metropolitan Securities Com
pany. The latter in turn was absorbed by
the Interborough-Me metropolitan Company
at the time of the biggest Of all the mergers.
a year and a half ago. Under the lease
agreement between the Metropolitan Street
Railway and the New York City Railway
Company the latter undertook to ray 7
per cent dividends on Metropolitan Street
Railway stock. The dividend has been
paid up to the present time.
IL has been a general understanding that
the dividend was guaranteed absolutely
by the New York City Railway Company
in such a way that the guarantee could not
be other than binding upon any companies
which acquired control of that company.
10 was said in some quarters yesterday that
such is not necessarily the case. On the
authority of one Of the leading men in the
Metropolitan Street Railway il was even
declared that the lease of the Metropolitan
by the New York City Railway Company
was actually a rental and was dissolvable
at the option of the New York City COM
pany in case the Metropolitan failed to earn
the dividend. The Metropolitan has failed
to do this for some time past. It has been
the non-productive factor in the Inter-Met
combination.
Whether or not a decision Mas been
reached respectins the power Of the New
York City Hallway directors to pass the
dividend could not be learned yesterday.
The question. ii was said. will come before
the meeting OF the directors to be held on
September 5. There was a meeting yes
terday Of the executive committee OF the
Interborough- Metropolitan Company. No
decision IL was announced after the meet
ing. was reached in regard to the dividend
on Inter-Met preferred or on any recon-
mendation affecting the Metropolitan.
The action OF the stock market has indi-
Gated very plainly of late that certain hold
ers of both Inter-Met preferred and Metro
poltan have had reason to expect a reduc-
ton or suspension of dividends. There
has been heavy liquidation of the stock Of
both companies, and this has been resisted
by not the slightest inside support. Inter
Met preferred has sold down to IS per cent.
investment basis on the present dividend
yield, and Metropolitan, which sold even
below Brooklyn Rapid Transit yesterday,
went on an Is per cent. investment baais.
Apparently the iqudating stockholders
in both companies have expected reduction
in dividends, for the stocks have sold down
TO what the Street considers non-dividend
plane
II the Metropolitan dividend is reduced or
passed such action will undoubtedly be Wig
orously contested by minority stockholders.
The right of the dominant company to
avoid the alleged guarantee was disputed
sharply by various men who declare that
the Metropolitan stock was marketed under
a positive assurance that IL was q guaran-
teed stock and not one subject to the chances
OF rental income.