New-York tribune., 1908-06-10
ROUSES CRAVATH'S Ire
Choate Compn alton Deal to Cen
tral CrOsstOYn Transaction.

Syndicate always means sin in some sense, said
Joseph II. Choate. summing up on behalf OF the
receivers of the New York City Railway Company
in their suit against the Metropolitan Securiue'
Company in the United States Circuit Court yes.
terday "Syn-di- cate Is appropriate term.
Mr. Choate aroused the ire of Paul D. Cravath,
counsel for the securities company because ne
likened the S50S S33 80 Central Crosstown Railway
transaction to that by which syndicate mace De-
tween $40 900 and $4,000 600 by the reorganization
of the Chicago & Alton Railroad Company. When
Mr. Choate was through Mr. Cravath said, with
much emphasis:
II could not vie with Mr. Choate in the use OF
epithets in bountifu mud singing. He mas TAKEN
advantage of his great position to characterize Two
transactions. the Chicago & Alton and the Centfai
Crosstown transaction. in and absolutely un
justified terms He has attacked gentlemen VINO
are not present about something that he evidently
is not fully informed about
Il secured my information from the minutes o.
the Interstate Commerce Commission, commented
Mr.. Choate.
There was nothing in the commissions report 20
justify such characterization. retorted MI. VI"
vath. Mr.. Choate evidently knew that was
counsel for the Chicago & Alton in that case.
~ did not" said Mr.. Choate.
Mr.. Choate did not mince his words in describing
the Central Crosstown Company transaction. ne
referred to the term '1ndefensible finance used IN
connection with the Chicago & Alton deal by the
Interstate Commerce Commission, and added:
That is exactly the term to apply to this $685. ;-
S33 33 ] don't know who was responsive for TINS TINS
transaction. It looks like another Chicago q Aton @
deal l wouldn't say that it done by the same
master hand nd m but i WAS WAS er done afser m
In the first place money raised out OF tne .5s Sc
600 600 had been expended could not be utilized for
any such purpose as the additional sum WAS "p
This sos S33 SO was raised by the Central Cross
fwp Sf into re Re system With
there was balance of sSOO,OOO LETT over, over
and was deposited by the Central Crossto"h
Well, on April 80, according to the agreement sl"n
the securities company presnmi1s on rs Comnanv
borrowed this ss00OOO trust fund. Then the Cen,
tral Crosstown Company borrowed 1t IN turn ,tt on
their money? We don't know but they used 1t for
their own purposes and that was an Illicit use
Then matters shaped themselves for the Metro
gin the parties interested woke up, the fact that
funds 90 public G hey and
raised the money through August Belmont and
afed + ft1G ha9ds % od for 6 fund
On September 80 Mr. Cotton as treasure, Td en- 4f he
That day came, it check was drawn TO to
company, but $1,000 had been left in the trust ac-
cover it. treasurer Moorehead drew a check for
49, to the Morton ttraot TrRs o
pany. for the Central Crosstown Railway Com
way Way Company drew its note for $500 900 the
MeTopolitan Securities CompanX This note t was vas
lawyers; and If it did emanate from the office Of
the lawyers of the securities company, | can only
say that they had the agreements between the
companies before them and knew what should and
should not have been done.
The learned counsel for the other side have
stated here in court that they under obf-
cations pay that 100000. Now: if they were un.
der obligations, they had no right to pay IL 1t
was simply voluntary act the part Of the
Interborough- Metropolitan company to get the
Metropolitan company out of a scrape-the scrape
which they found themselves in as result of the
payment OF this trust fund into Illicit channels
Judge Ward granted thirty days to both sides for
the Presentation Of briefs.