New-York tribune., 1916-02-15
The Thompson Committee
Learns Total Of Fees
Charged as Construction.
SEEKS TO PROVE
MORGAN'S SWAY
Members of Estimate Board In
flucnced Through ShontS,
Is IntimatiOn.

The Thompson committee had two OBJ
jectives in its drive yesterday on the
dual subway contracts. Ono was to
,how that Controller "rendergasts dc
fence Of the contracts had few vulner-
able points The second was TO try 10
prove that Morgan & Co. exercised an
influence. through Theodore ?. Shonts.
president Of the Interborough, on mem
bcrs Of the Board Of Estimate.
With respect 10 the last. through
questions fired b. Banbridge Colby,
counsel 20 the committee. az two Of
fcials Of tho lntcrborough II. VI.
Fisher. secretary, and f. +. j. Gaynor,
au1itor these facts were established:
That on May 1872 after a threat from
=. P. Morgan to cancel the contract 10
supply the needed Sl70.00o,O0O to build
the subways unless the city closed It's
contracts within a few days, Shonts
wrote 20 George A. icAneny, then
President Of the Board OF Aldermen
and chairman Of the Board Of Estimate
Rapid Transit Committee, ormins
MIN Of the threat.
That less than three weeks .@ter Mr..
McAneny's committee submitted IA
vorable report 10 the board on the con-
'racts. They were. not signed, how
over. until the following April
Other Deyelopments
other developments Eere:
That the lnterboroughs interest
charges. lawyers fees, bonuses and
other theoretical items e construction
charged to its construction account will
bc about slO.oOO,OOO. which the city will
have to pay.
That the city paid $2,500,00O interest
charges on the loan o. S17o.Ooo,0Oo
which Morgan & Co. made to the Inter
borough.
That. on motion OF President Shonts.
who received the suggestion from Nor
can & Co.. the 1nterborough directors
waived its rights in favor Of Morgan
& Co. 10 a share of possible profits of
some S2,OOO,OOO on s4O,OOO,OOO worth Of
bonds.
In the letter to Mr Shonts Morgan & |
Co. said:
I'VE arc not willing TO commit our
selves to the investment OF Sl7O.0OO,OOO
q. any time in the future regardless Of
conditions. Accordingly, unless we hear
within the next few days that the con
tracr with the city has been closed we
shall be obliged to cancel the agree
m,nt"
MI Shonts, on receipt of this letter,
wrote 20 Mr.. McAneny. acquainted him
with Is provisions, and closed with the
following:
81 rust that our proposal of Febru-
try p. 1912. may receive the formal ap-
proval Of the Board Of Estimate and
Apportionment at its next meeting
On May p Mr.. Shonts wrote let
ter to Mr. Morgan containing this SEN
tcnce:
The agreement has been entered
into. subject on both sides TO the reser-
walton tha, IL shall be passed upon by
the courts before any action Us taken
under II. and all agreements taken un-
der the letter are taken subject 10 this
provision
Says Prendergast Was in Error.
Which caused Mr. Colby TO make this
comment:
This proves that Mr. Prendergast
was in error when he spoke Of there
trt r.Ifnurtsa cfrrf Hrpfrtrhf i1r 80
Admiral Realty Company against the
city 20 restrain - from entering into d
dual subway contract
what interest had the city in the
operation Of the Manhattan Elevated
road o" asked Mr. Colby of Mr. Fisher
"lt secures division Of the profits
after q certain preferential is earned. ~
$50 that the Controller Is not exactly
night in his inumation that the city
has no interest IN the moneys expended
in the third-trackng Of the Il lines 20
81 can't tell on what premises the
Controller bases his statement"
Then evidence regarding tie favor
able terms of the contracts were dwelt
OF by Nj Colby he emphasizing the
preferential or prior lien Of some
fourteen million dollars which the In
terborough holds against the annual
earnings Of the subways when in opera
tion.
Discusses Preferentials.
"The preferential tho Interborough
was TO get was widely circulated 10
show tho merits % the bonds o" asked
Mr.. Colby.
presume So said Mr Fisher.
The circular stated tho company re-
served the rights 10 increase payments
70 the sinking fund?'
Yes. Sir"
u find here in tho minute book. un-
der date Of August. z. when the al.
rectors met, reference 10 with