New-York tribune., 1908-03-04
COUNSEL CLASH AGAIN
JTHBURG WINS NEU POINT
Gets in n Y. City Railsray Com
pany's Important accounts.

There was q clash yesterday over the Ques-
-ton Of insolvency in the suit brought by Attor-
ye.- General Jackson against the New York City
Railway Company The Cravath admission on
Monday before Justice Davis. in the Supreme
court was sort OF preparation for the hearing
Yesterday when Oren Root. the present general
manager Of the company was examined But
"a. clash came after Mr- Root had been the
s-znd. and was between Paul D. Cravath. coun-
sel for the railway. and H. r. Limburg. who
-er-esents the Attorney General in this suit.
r. zss toward the end Of the hearing when the
----x ~ the case was brought out by Mr Linn
b-,-F in at attempt 70 get in the equipment and
-,-s,rucrion accounts from 1903 on. Mr.. Cra-
,s-r objected but Justice Davis ruled against
him.
Then M Crsvath took UP the question of in
sor,srcv upon which the suit is based. and
said that the corporation was not necessarily
,-sa7,-ent heCa use its assets were less than its
liabilities for a time the actual test being for
-ee co-noration 70 meet its liabilities as they
pecare due.
Nsrv corporations - said Mr.. Cravath. other
than raoneyed corporations have been in a sim
sfs- r7sirlon but showed their ability TO per-
fo--, their corporate functions and meet their
-iz Lfi-iee a. maturity. In this case il has been
s+ov7 that the Metropolitan Securities Com
-s-v vas the chief creditor and has shown itself
=. ~ rssou-ceful and responsible corpora ton.
4,s,-fns raid IN 100000 and having 81 10000
s-il 70 Apply. No one has questioned its SOL
zenrv II the that its liza bilities were more
than It's assets we're applied. the Attorney Cen
e-sl would have the night 10 descend on scores
Of business corporations and close them out
The real test Is the ability Of the corpora ton
70 continue business and pay its liabilities as
they come due
N- .f-77t77 Ha NJ -F,-
quotations from q brief that he and Samuel
Trte--yer had submitted 10 Justice seabury
and on which the latter had refused 10 ap-
point state court receivers. M Linburg quoted
as follows
Insolvency MEANS lack OF sufficient prop
errv 10 pay debts TIE definition Of the bank
ruptcy act is that z person shall be deemed in
solvent When the aggregate Of his property ex-
ol1sive Of that fraudulently transferred is in
sufficient. at q fair valuation. TO pay his debts.
such is the general acceptation Of the term"
NJ Cravath had nothing TO say in response
- -he reading Of his own arguments. He per-
sisted. however. that his point OF view was the
real point involved.
NJ Roots testimony related TO the details Of
TIE reports Of the company. He admitted that
h took the figures from the treasurer and the
euditor without making an attempt TO verify
tHz1l. and when il came TO the account OF ma
-s-isls and supplies carried in the report at
about ss0edpo Nj Limburg asked him whether
this vas not large amount 70 carry
-r(o- al all replied Nj Root We carried
right along about S30oea worth Of materials
n th= construction and equipment teriaI ac-
count S50o.o00 was no large sum for g company
the size Of the New York City Railway Com
pan 70 carry
VII YOU tell ne from that report what was
the actual amount Of construction charged 70
rha+ account for the year ended June So. 1866
- Lin-burg asked.
1t shows s. 65s The auditor would have TO
tel whether this was correct OF not
Isn't IL surprising that construction material
worth $4,000 should be purchased that year
and only So65S spent for construction"
No. We might build one year and not an
otr=-"
Then Mr. C-avath came in with the state
-1e1t that the latter sum was only for con
sr-u--ior OF the New York city Railway Com
pa-v and not for the other roads
NJ Lirburg. Is he did the day before. then
tired -o show that z. large part OF the SS0o.pr
for construction material carried asset
vss really junk.
Do YOU remember buying 100000 worth Of
material a one time NJ Limburg asked Nj
Root
Yes. during few days purchased much
more than that for the S4"""E cohsNuc'i'ii
contracts
Do YOU know what the item Of S3lbSoo l"
carried IN rhe 1906 report as prepaid and un-
distributed accounts and track rentals repre-
sar-s7"
- knew a. the time. hut the general auditor
would have 70 be called on 70 answer now
Charles Z Warren. the treasurer Of the com
pan-. was recalled. He brought with him Two
tig bundles o< checks showing payments for
materials and supplies fo- the year ended June
81 l4l5. and tor which Mr.. Limburg had called
The 5sv before After a dispute with the Wit
1sss NJ Limburg declared
- ~ going 10 show thai they never pur-
chased these supplies ~hich figure in these re-
Pc--s"
III cravarh fought agailst this line Of ques-
cler.-E aur Justice Davis overrUler him
The balance sheet for this quarter ended
T3eoe-~re~ u 1866 said Nj Lin burg. shows
materials ard supplies on hand S:522 22"2 az the
s.~-frs- rzro-- for March 81 1906 shows sucn
materials on hand. STs6':55 II. Now. Mr- " ar
re1 call for ali the checks for purchases our
lnz that period"
Nr Cravath said there we're nearlE l''H''
checks in the lot. and declared the Information
could ~ gotten from the proper books puI
Nr Linburg raised MS voice 10 say that ne
o,in't propose 30 accept false ledger accounts
This remark Vas stricken out II was nnally
agreed 70 permit the accountant lor MI LII
burg 10 search for the checks wanted
The fact That Nj Limburg did not find all
thsr ne was looking for in the books does no1
mean that the proper items OF assets are ii''
explained there s. ID Mr.. CraTath
Justice Davis ruled against MI Cravath. now
e.er. and ier the analyses Of the equipment anu
eorz------f~- .~-.or,v,s from the balance sheets