New-York tribune., 1908-03-03
JACKSON MAN JUBILANT
DRAWS OUT p. u. GRIFFITH.
No1c Eapects to Yin Case AgdiHst
n. y. City RaiI-Cay Com pany.

I
vath counsel for the New York City Railway
Company. in the suit of Attorney General Jack
son to dissolve that corporation OF the ground
! that it was insOlvent for Jnau q year
prior to the date of its going into the hands
of receivers, caused H. P. LImburg To express
the opinion after adjournment OF court yester-
day afternoon that he had practically his
case.
Il admit" said Mr.. Cravath that the So
called asset entry Of S!.N0OG0 being the dis
count on the S15G0OG10 ten-year per cent
notes of the Metropolitan Securities Company.
should be disregarded IN comparing the value
of the assets with the liabilities as of & given
date. We contend that under the rules OF the
Interstate Commerce Commission ii per
fectly proper bookkeeping entry. bur we cOncede
that It should be disregarded In determining
the real assets as opposed To the bookkeeping
assets
Nh I.meurg special counsel for the Attorney
General gasped with astonishment at this ad-
mission. then ne declared: You admit that 1t
is not a true asset entry Whether not it
was proper bookkeeping entry will be for an
entirely different tribunal TO determine
The admission would save two days Of the
trial Mr.. Linburg said after adjournment The
reason why Mr.. Cravath made this admission,
he said was that he knew in proving it we
would bring out some damaging testimony re-
| garding what was done with the money. Dis
| trict Attorney Jerome has always contended, in
refusing take action in the New York City
| Railway matter, that this S4,300,Go was
| perfectly proper asset. Ee may look at in
different light now
Mr.. Limburg also said that including the
| S4.J00O00. he had succeeded in the afternoon in
adding more than S7000000 10 the deficiency Of
SIS 923 900 o. appearing on the balance sheet of
June 80 1896 AS the entire capital stock of the
| company at that time was only 50 361 800 the
| 100000 added TO the deficiency would more
| than wipe II out
Among the witnesses examined yesterday
were Mortimer L. Schiff. OF Kuhn Loeb & Co.
which firm agreed to underwrite a part of the
note issue of the Metropolitan Securities Com
| pany, which was discounted at loss Daniel 3
| Hasbrouck. vice president. and Charles Z. War
rem. secretary dtreasurer, Of the New York
| City Railway Company. Mr.. schif was ex-
| cused early. he had planned TO sail for Europe
to-day to join his father. The trial took place
| before Justice Davis in Part N, Special Term Of
| the Supreme Court.
Nathan Nidaver, who recently prosecuted the
| Kissena Park scandals before the Queens
/ County Grand Jury. was in court, arf said he
| had been retained by the Attorney Genera! TO
| watch the proceedings with view TO getting
| any points that might be of interest to the
/ grand jury of this county.
| On the balance sheet of the New York City
| Railway Company for June go 1906. appeared
an asset item of So 534 co. %, being moneys due
from the subsidiary companies.
Did you ever attempt to collect these items ."
asked Mr.. Limburg Of Mr.. Warren.
CAN'T COLLECT FROM SUBSIDIARIES.
That would be impossible" said ar warren
Why"
Mr.. Crarath objected and continued to object
" hen Mr. Warren was asked if it was an asset
that was coectible and as to how the moneys
had been advanced the subsidiary corpora
tions. Mr. Warren did say. however. that il had
been used in construction and bette-ment work
for the subsidiary companies without any spe-
cifc request from the various boards Of directors
of such companies AS treasurer he had never
called the attention OF the New York city di-
rsctors to the fact that these debts could not be
collected.
Mr. I.imburg asked Mr. Warren If he had ever
looked into the question of materials and sup
plies on hand. which appear in the balance sheet
Of the company at 100000 He said he pur-
posed to show that much Of the material was
junk and worth what it scheduled
Mr.. Warren said he was not familiar with this
department, but would produce to-day the checks
covering the purchase of materials from March
81, 1906 To June 80, 1907.
y suppose YOU would be surprised to know.
said Mr.. Limburg, that an automobile was put
in as an equipment asset in June. 1905. at
actIy the same figure it was listed at in June,
1902"
Then Mr.. Limburg started 70 delve into GER
tain lump sum of $4,000 which was charged TO
the construction account, including the printing
of certain debenture bonds and certain legal ex-
penses but did not have time 70 go deeply into
it before adjournment. Il know well about those
legal expenses" said Mr.. Cravath with smile.
Daniel h. Hasbrouck placed on the stand
and asked if he had signed the annual report for
1906 He said ne had. but admitted he had not
examined any of the statements in detail, as he
had relied on the word of the officers who pre-
pared il that II was correct statement of facts.
He was excused and Mr. Warren took the stand.
He had signed the report as secretary and treas
urer. but did not compare any or It's entries
with the books relying Mr.. Brown, the con-
troller, and Mr. Moorehead, the auditor He
admitted that the item of sS65s,527 81. being
stocks and bonds OF other companies held. had
been carried along at the same figure for years
nothing being written off for depreciation.
In opening his case Mr.. Lmburg said he would
show that the New York City Railway Com
pany had been insOvent practically from It's
inception He referred TO the agreement of the
Metropolitan Securities Company 10 furnish
S23 coo 900 needed for betterments. to the New
York City Railway Company, which was 10
turn 1t over 10 the Metropolitan Street Railway
Company. We shall show you he said. that
the New York city did not receive The cash
froga the Securities company We shall show
that the Sl50G0bp0 of notes ISSUED at 20 were
redeemed at 5ar and reissued at 30 netting a
clear loss Of S4..OU.oUo'
Mortimer L. Schiff testified regarding the un-
derwrting of the Metropolitan Securities note
issue He was asked if Kuhn. Loeb < Co. his