New-York tribune., 1908-04-21

- ;,,-. rh;ch we're issued S5,ooooo'
~ stock and like amount Of BONDS thuS Apf
.ntl, leaving a net profit of s''SooooV ,oi .,'
.;e,sors, from, This single transaction, the loi'
lowing are the real facts
n. Lexington Avenue Pavonis Ferry Rs,,rGao iS ~
Vas Incorporated in 1893 ae autil ne
,si,s s. one coo Of bonds and Seo1o oi 20 con
NeIronoltan Traction Company con'ractsea u ~ obtar
~, ssc railrav po~e- house. ETC. ana 10 op.a >,
for the Lexington Avenue ConpSnS s su,ov IN con
operate its cars in 30 street and bTosnM,ssi " The
sideraton its bond and shsrs :, @ 9 Of bonds
~ &c. tentTst Trust Company. Gursnty trust COM
nanv and Mutual Lite Insurance tomlan.H, ~. ,-ass
,, ~ The FRACTION company and used TO construcs
the road whatever OF profit OF loss ensued inure1 80
80, 80 ts sesht copaGy Sn ahaTcSand share
The S5encno of lexington Avenue STOCK 60. Com,
nam ~, was consodsted with the Metropolitan street
Hallway Company whose entire share capita s saso
vas owned hg the Traction company- II was theh
cancelled
The same procedure. Mr.. Ryan said, was FOL
lowed i'm connection with the Columbus a Nlhth
Avenue Company. which issued s3,r1"p OF
bonds to the traction company (slso sold at par
and interest and s5.ooo.ooo Of stock. also eX-
changed for Metropolitan Street Railway Com
pany stock.
MERGING OF SUBSIDIARY LINES
Continuing with his history of the various
financial developments" the merging of differ
ent subsidiary line. Of the company. Mr.. Ryan
says:
When the Lexington Avenue Company g oG, ,oo
capitaD and the Metropolitan CrosstoHn Conpsny PAM
Street Railway Ccmpany all of the shares of these
-four oopseo g s Trc 9nee Pf ae Sae the exinsuia
Inent OF the stock of the three merged companies
ng .a the SOFT nosefPon9g stock S 'e te
oeo. which continued 10 remain in the treasury OF
more than q change OF form in stock certificates
which could result IN no loss or profit to any one
Whatever advantage disadvantage accrued from
such change in form was participated in by all Of
IRE stockholders OF the Traction company, share
and share alike
He then gives the history Of the acquisition
~ the 34th Street Crosstown Line and its effect
upon Tire Metropolitan railway system as fol-
iows-
.Eo ol6 eon3psnies ieid the franchise rights to
,slization was: Stock. slsoo.0O0; bonds $500 900
ne traction company bought these securities
,in,. thsm into 5he stth street crosstosn Rai.ay
600 o6o bonds secured ,v q Tnortsage 10 the Cen
aoa M oor nTust Company trustee The old bonds G1
now SO held by the Central Trust Company The
rev $1,000 'o9o Of bonds were sold for los and in.
,aa aiIasIien co5pany The Slooo,ooo OF stock
the sens2ei mortgage Of qS CSRaaa %eRopoan
street ksiIEsy COMPANY. and is now held by the
Guaranty Trust COMPANY trustee
There were many other precisely similar"
transactions. Mr. Ryan says. in the processes
81 sTnalEsmation. Those described" ne as
Nerts, ARE selected because they are the ones
~-hich have been most generally misrepre-
scented"
There was no increase in capitalization TO
rhe public in any instance" he declares; all OF
THE issued shares OF subordinate companies
being held in the treasury Of the Metropolitan
company. or pledged under mortgages and never
offered for sale. The twentv-odd million Of
alleged profits 10 insiders therefore, never had
any existence"
M Ryan speaks briefly Of the Wall &
Hortlandt Street Ferries deal and of the $500 600
advanced By himself and four others Each Of
me hVe who advanced the money ne says, was
paid back with interest later. and that explains
the five checks Of sII1.eoe each