The sun., 1908-06-10
CROATE S7lRS UP A FUSS
BY LTKENING A METROPOLITAN
DEAL TO ALTON LOOTING.

.n,,ies Phrase .andefensibie Finance" 10
central Crosstown Transaction ant RE-
ters to q Master Hand'--'Gratuitous
Mud Singing" Is Crayath's Retort.
The conclusion of Joseph II. Choate's
summing up yesterday for the receivers
of the New York City and Metropolitan
Street Railway companies in the suit against
the Metropolitan Securities Company to
recover a, ,s84 600 aroused both amusement
and excitement among those who have
been attending the trial for week past
before Judge Ward in the United States
Circuit Court.
-Gratuitous mud singing" was what
Paul ID. Cravath of counsel for the de-
rendant corporation called it, and when
Mr. Choate finished MIR. Cravath took oc-
cssion to say some sharp things in reply.
The friction was caused chiefly by Mr..
choates remarks on the Central Crosstown
Railroad transaction. which he character
ized as similar to the lootng of the Chicago
and Alton.
Il did not know how to characterize
tins transaction" said Mr.. Choate, until
hit upon happy phrase in reading the re-
port of the Interstate Commerce Commits
sion concerning the transaction in which
a group of capitalists broke into the treas
ury of the Chicago and Alton Railway Com
pany and helped themselves to $4,000. 900
or sl5.C00,O00.
This was done by a syndicate--a word
most appropriate, since syndicate seems
TO spell sin of some kind or other at the
present time.
The members of the commission were
simple minded men, as are the Court and
receivers and counsel for the receivers,
and they we're unable to digest the deal,
and called il 'indefensible finance That
Is the term would apply to this 5000
| can't fix the responsibility for this trans
action, but it looks like another Chicago
and Alton deal. | wouldn't say that it was
done by the same master hand. but as the
art term has it. it was after Rembrandt
The Securities company" Mr.. Choate
went on to explain, never intended any
of its advances to be used in the way that
money was used. This $500 900 was raised
by the Central Crosstown Company for the
purpose of its own road, which was after
ward absorbed into the system. With
another amount there was u balance left
over Of SsOO,OO0. This formed a trust fund
under the terms Of the lease and was de-
This fund was borrowed by the Securities
company and then in turn by the Central
Trust Company. What has become Of this
money We don't know, but it was used for
their own purposes, and that was an illicit
use Of trust funds.
Mr.. Choate declared that August Belmont
4 Co. we're made trustees for the Central
Crosstown's money. When pressure was
brought to bear the Interborough COM
pany paid the 100000 to the Securities
company, the Securities company paid
1t to the Metropolitan Street Railway Com
pany, and that company to the Central
Crosstown Company, or to itself Mr.. Choate
corrected, and the money deposited with
The Belmont company, de said that the
iacs of the case had been imperfectly
the latter would never have permitted
the $4,000 TO be paid for the develop
ment of the Metropolitan lines IL he had
understood the real circumstances.
Mr. Choate returned to the general fea-
lures Of the $s.Ooo.oOo note agreement.
depositor or holder Of a letter of credit
who has been refused compliance with
his demands, and if we understand the
law Immediately had a right OF action for
c,npany. Upon that breach Of contract
our company acquired the right to sue
immediately and recover the full amount
lost, past and prospective. l demand
Judgment on behar OF my clients Tor a'-
When Mr.. Choate had taken his seat
Paul u. Cravath asked permission Of the
Court to say few words.
Il cannot vie with Mr.. Choate in the
Use Of epithets or in gratuitous mudsling-
ing" began the counsel for the defendant
corporation. He has taken advantage
- his great position to characterize the
Chicago and Alton and Central Crosstown
Transactions in absolutely unjustifed
Terms. He is evidently not informed fully
concerning them"
Il got my information from the minutes
of the Interstate Commerce Commission"
replied Mr. Choate.
There is nothing in the minutes to justify
your remarks" was Mr.. CNvaths reply.
When the tilt was ended Arthur H. Masten
counsel of record for Messrs. Joline and
Robinson, asked the Court to set time
for the filing Of briefs. Judge Ward gave
thirty days in spite of Mr.. Choate's strong
objections.