New-York tribune., 1908-06-09
SUMS UP TRANSIT SUIT.
Dir. Choate 1ttacks Dir. Craraths
Arguments for Net. Securities.

Joseph II Choate. counsel for the receivers or
the New York City Railway Company. summed up
Yesterday in their suit against the Metropolitan
securities Companv to recover COO the balance
alleged TO be due on IS 100000 which the plaintifs
are alleged to have agreed to furnish in 1907 to the
New York City Railway Company to be spent IN
needed improvements
Mr. Cboate said he thought IT would be mistake
to follow his learned friend paul d. Cravath'
counsel for defendant) into all the paths laid open
bv him. For thing" said Mr. Choate MT
Cravath has been arguing right along that the ad-
val made by the Metropolitan Securities COM
papy should be repayable demand. In view of
the fact that to quote himself, these advances
were to furnish the sinews of this great system
IS not such proposition out Of the question? Let
us suppose the demand theory to be correct What
would have happened to us after we had borrowed
the money and utilized it? Wouldn't we practically
be making Improvements with our own money, and
wouldn't we have been made bankrupt
They would have given you notes." said Judge
Ward.
II don't think they would have given any
thing" said Mr.. Choate. 'They would have ad-
vanced US the money they had already raised with
securities turned by US. and they would have
forced us into bankruptcy by demanding imme-
date payment
Declaring there nothing in the contention
that railway companies could receive and expend
moneys only for certain purposes. Mr. Choate add
ed: when once the machinery of this combina-
ton had been put In motion (and 1 how to Mr..
Cravath on the application of the word machinery
as 7 know of better qualified to it, that
money has become available. and there is way
you hedge the company about and make in
structions what improvements must be made.
Our learned friend said Mr.. Choatc. looking at
Mr.. Cravath, has endeavored 10 prove that
not entitled charge the S2.S3o00 expended by the
New York City Railway Company against the
IS OOO n00 for which notes had been given. I'll
fess that his arguments subtle and involved
that I. as a plain business lawyer. under
stand them But this | know: The defendant put
us in the position of having spent the money for
the specific purpose mentioned in the agreement
and then declined to regard the expenditure ap-
plicable to the ss,oo0,oO
Referring the fact that collateral worth s., 1885,
ono had been given with the notes. Mr.. Choate add
ed: THAT collateral could not have been hypothe-
Gated without laying those who did 1t open to in
document
The argument OF Mr.. Cravath, to which Mr.
Choate took exception.
The New York City Railway Acknowledges to
the Metropolitan Securities Company the receipt
s23 900 900, in return for S12500000 of New
City Railway stock and SIS. .00o. 600 in New York
City debentures, we'll 50. .S34. 900.
After the expenditure of the S23 000. 600 the New
York City Railway Company under no obliga-
ropotan Street system improvements or devel-
opmerts. II TO pay rent and the system
but could. II 1t chose develop the system and re-
ceive securities for additional Improvements.