The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-06-06
BELMONT DEFENDS
j PELHAM BAY DEAL
BEFORE THOMPSON
Quotes From Court Decisions
to Show lie Got 1000 In
tcr-Mct. Shares Fairly.
TOMkINS BALLAST CASE
GETS ANOTHER AIRING

TOMkINS BALLAST CASE
GETS ANOTHER AIRING
With August Belmont on fine stand.
the Thompson legislative committee be-
gan yesterday n review OF the case of
the Continental Securities Company
against Mr.. Belmont and the INTERIOR
ough Rapid TRANSIT Company as it was
handled and finally disposed of by the
Appellate Division. Mr.. Belmont's tes-
tlmony consisted of u review OF the
facts as thoy were developed In Special
Term, Supreme Court, and of quotations
Of the opinions of Justice Van Siclen
and the appellate Division.
The committee desired to know from
Mr.. Belmont himself. rather than from
the court records. how 1t was that the
marlborough Rapid Transit Company
came to pay him $1,000 shares of It's
stock for his interest in the City Island
and Pelham Park railroads in 1902. In
answer Mr.. Belmont said
Every circumstance concerning my
transfer of the ownership of the CITY
Island and Pelham Park railways to the
marlborough Rapid Transit Company
has been the subject of judicial scrutiny
In the case OF Continental Securities
Company versus August Belmont. In
terborotlsh Rapid Transit Company ct al.
After n trial which lasted five days
Justice Van Siclen dismissed on the
merits both the complaint and all the
charges 81 fraud, collision, eNtortion
and illcgality which 1t contained. This
decision has since been unanimously
affirmed by the Appellate Division. and
under the law that decision constitutes
. conclusive and final determination
OF the facts.
Tn opinions OF Justice Van
siclen and OF the Appellate Division
80 deliberately into the history and de-
veiopment Of the subway and the finan-
cial transactions connected Herewith,
and / make them and the decision and
Judgment part OF this statement and
record.
. No FRAUD or Bnd Faith.
1.-THE Appellate Division in It's opin-
lon concludes its investigation of the
facts with the following statement:
"a full investigation OF all the
facts and circumstances IN the trial
at Special Term has resulted I'm find
ings by the trial court which mega
tive fraud or bad faith and :he
charges OF exaction of IN extortioslte
bonus by Belmont & Co. With these
findings we agree.
1.-THE decision establishes the fact that
- solution had been found for the ex-
~traordinary problems presented by rapid
trans conditions In this city prior t.
the year 1900. when John T.. MCDon-
aid appeared ana became a successful
bidder for the construction and opera
tion OF the subway. Concerning him
Justice Van Siclen says:
1T appears. however. that while
the action OF said Mcdonald was
heroic in adopting the subway wall.
still he had neither the money nor
the financial standing to maintain and
support II. and WAS compelled TO look
to others for the fultlment OF his
contract. said Mcdonald
was unable TO meet the requirements
called for by his contract with the
city, and after extensions thereof the
defendant belmont appeared and in
duced others to Join with him with
sufficient financial standing and faith
In the enterprise 10 proceed with the
work"
Had to Have Old Company.
Still quoting from the records of tn,
court, Mr.. Belmont informed the Thomp
son committee that when operation q
the subway began to he considered fl
1900 The rapid transit act was In
terpreted as making II obligatory tina
only "A railroad company already operat
ms a railroad in New York city coul,
undertake the operation OF the subways
The Legislature declined 10 amend tn
railroad law so as to permit the forma
ton of a new operating .cUnpany
Whereupon Mr.. Belmont acquired o
per cent. OF the stock of the City Isian,
Railroad Company and the Pelham Par
Railroad Company for about $2T0.00I
Then came the desired legislauv
amendment and the PETERBOROUGH com
pany was formed. Mr. Belmont turne,
over to this company his shares in tn
City Island and Pelham Park conpanie
and received in exchange 1900 share
OF 1nterborpugh stock. Mr.. Belmon
sought to make II clear by his quota
tons from the court records that IN
franchises of the City Island and Pei
ham Park roads were valuable fran
chises and that his requirement of Is,
900 shares OF lnterborough stock 10
them was not an excessive compensa
uon for the risks he had taken.
The court has expressly found" h
said, that the $4,000 shares were issue
to August Belmont Il Co. for ample con
siderat!on; that the properties an
moneys for which the capital stock G
the 1nterborough Rapid Transit Com
pany was issued were fairly and reason
ably worth a sum at least equal 10 tn
par value thereof. and every one know
that to-day the properties SO trans
ferred are worth many times the amour
OF the stock then issued for Them"
Gofng 10 Chicago aud 81. Louis.
Mr.. Belmont win continue hts test
mony after the national conventions II
told Senator Thompson that he wa
going to Chicago and to ST. Louis, an
In explanation OF his desire to attend IN
do'ngs at Chicago he said tina Mrs. BE
mont was Interested in the meeting {
sufragists there and that he thought h
would go along to see the fun.
The afternoon session of the commit
tee was devoted to another rchearin
of former Dock Commissioner Tonkins
charge that he hadn't been fairly treate
when he bid to supply ballast for tn
new subways.
Chief Engineer Craven of the Publ
Service Commission was on the stan,
and his only explanation of his rea,
vertising for bids after specifications ha
been changed was thai the Tomkiu
quarry wasn't nice and clean. IT W.
shown again hat the specifications II
track ballast were 30 changed as TO cl
out Mr., TOMB. MSS company and AIS
that Francis DE g. Sullivan WAS a d
rector and Cornelius Vanderbilt a stool
holder IN III" company, which ultimatcl
rat tho. . A. L.