New-York tribune., 1909-03-20
TO LOSE 4TH AVE. LINE
NEXT MOVE EXPECTED IN
MET. DTSMENBERMENT.
Franchise Tares of $500, 900 Unpaid
-Ne10 York 8 Harlem Afratd
Lessee Can't Meet Them.

avenue surfac ce line from the Metropolitan Street
Railway Company's system will be the next |
move in the dismemberment of the local surface |
lines. according to semi official information
obtained yesterday by The Tribune This most
important link in the Metropolitan system is |
owned by the New York & Harlem Railroad |
Company and is operated by the Metropolitan !
under a s99-year lease
BY the terms of the lease the Metropolitan |
is obligated TO pay to the New York & Harlem |
annual rental Of 100000 well as to pay
all taxes and operating expenses. The receivers
of the Metropolitan have not defaulted in the
rental TO date but they have left unpaid special
franchise taxes amounting, with interest. to
upward of 100000. on this ground counsel for
the New York & Harlem will probably ask in
the near future to have the lease set aside and
the road returned to its owners. The New York
& Harlem is part of the New York Central sys-
TEN.
In the Fourth and Madison avenue line
ceases to be part of the Metropolitan. the sys
TEN will lose one of it's best money makers. as
well of its most popular and longest
through lines. The road runs from the postoffce
via Park Row Centre street and Grand street to
the Bowery up the Bowery TO Fourth avenue,
through the Park avenue tunnel to 42d street,
west In 42d street to Madison avenue and along
Madison avenue to 138th street, total distance
of 9ss miles branch runs from Fourth ave
nue. and Astor Place to Broadway and Astor
Place
Before the Metropolitan went into the hands
of receivers the Fourth and Madison avenue cars
transferred to practically every crosstowu line
from upper Harlem to the Brooklyn Bridge. In
the last two years many of these transfer priv
ieges have been cut off, but the cars of the line
still transfer to such important crosstown routes
as S4th street 23d street and 14th street.
TRANSFERS WOULD BE CUT OFF.
The operation of the Fourth and Madison ave
nue. line as an independent road by the New
York & Harlem Railroad Company would, Of
course result In the cutting off Of all transfers
with the Metropolitan cars unless joint rate
was arranged between the two companies The
/ receivers Of the Metropolitan refused to make a
Joint rate with the Central Park. North & East
River Railroad Company which operates the
/ 59th street crosstown cars formerly operated as
a part Of the Metropolitan system. This case Is
/ now IN the courts. A Joint would doubtless
/ be ordered by the Public Service Commission
| but whether such a rate could be enforced will
| depend on the result Of the pending legislation.
The first intimation that the New York &
! Harlem might take over the operation Of tho
! Fourth and Madison avenue lire came in the
| announcement that the board or directors had
! passed the dividend n , per cent usually de-
cIared at this time out Of the semi-annual rental
| received from the Metropolitan. In explanation
| OF the omission F. V ". Rossiter. vice presi-
! dent Of the New York Harlem, mailed the
! following circular TO all the roads stockholders
| last night:
The property Of the New York s Harlem Rail
| road Company comprises the steam railroad eN-
| tending from 42d street, New York. 10 Chatham
| and portion Of the New York central terminals
"a distance, with branches Of 1865 miles
! and the city street railroad extending from
New York City Postofice TO 13sth street-a dis
! tanCe Of 9SS miles.
Upon April l. 1873, the steam railroad vas
| Railroad Company for 4o1 years. Under the
| terms of the lease that company guaranteed the
| payment to the stockholders OF the New York
| e Harlem Railroad Company Of per cent
! dividend on its capital stock In 1900 an add
| tional dividend of per cent was guaranteed by
| the New York Central & Hudson River Railroad
| Company.
on June II. 1896. the city or street railroad
| was leased to the Metropolitan Street Railway
| Company for a period Of 999 years at a rental
| for the first five years Of $350000 per annum,
| and thereafter Of 100000 per annum. which
latter amount is equivalent to per cent on the
| sf0.o0000O capital stock This rent IS payable
| quarterly. and II has been the custom Of the New
| York & Harlem Railroad Company TO declare a
| per cent dividend semiannualiy, payable IN
| April and october, out Of this rental
MUST SAVE TO MEET TAXEs.
On April l. 1902 the Metropolitan street Rail
way Company sublet the New York City
Railway Company the property covered by the
aforesaid lease and on September "a. 1907, re-
CeVers of the property of that company we're
appointed by the United States Circuit Court
Upon October 2. 1899 the directors having in
hand a surplus exceeding $3,000000 available for
distribution to the stockholders, caused to be
distributed S2500.G00 being equivalent to 25 per
| cent Of the capital stock Of the company. At
the present time there remains on hand only
| about 100000 which would be insufficient to
| meet certain unpaid franchise taxes, hereinbelow
| more particularly referred to, which your COM
pany will be required 10 pay in case the receivers
Of the city street railroad make default In the
| payment OF the lessee's obligations
.
| been assessed against the New York & Harlem
Railroad Company, in respect of It's city railroad.
special franchise taxes amounting, with interest,
| to upward of $500, 000. The Metropolitan Street
Railway Company under the terms OF It's lease,
| is required to pay these taXes-in fact, TO pay
all taxes which, under the terms OF the lease OF
| the steam line TO the New York Central & Hud-
| son River Railroad Company that company IS
| not required to pay.
| Though obligated to pay these taxes, the Met
| ropolitan company has undertaken first TO test
| their legality. which accounts for the accumula-
| tion of unpaid taxes, each years taxes being in
| litigation. That there is good reason for con
| testing these taxes is shown by the fact that in
| similar proceedings for the reduction of such
| taxes assessed under the same laws against
other street railroad companies decisions have
| been rendered for substantial reductions from
| the amounts of the original assessments. Care
| full investigation since the reCeivershp fails to
| disclose that the receivers have reserved a fund
| from which such arrears OF taxes can be PAID,
nor does it appear that. if ultimately they should
| be upheld. there will be surplus earnings suffi-
! cient for their payment.
! Under these conditions and upon advice of
| counsel. your directors are of the opinion that,
! for the present at least, ii would be imprudent
to declare dividends payable out of rental due
! or to become due under the lease Ia the Metro
! some readjustm"nt Is made. such rental should
/ be reserved as d protection against the arrears
! OF taxes above mentioned. or other obligations
[ f,- ,sr-E,.