Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-06-28
Ian SUBWAY
|lvNJJLMENTWORK
city officials to Discuss
Cancellation Of keystone
Company's Contracts
CONFERENCE TODAY
Breaking of Agreement for
Tubes in Arch and Locust
Streets Desired

Mayor Smith, Director Twining. of
the Department of Transit, and City
pticftor Connolly plan preliminary
conference this afternoon on questions
fhat will have to be settled incident to
the annulment by the city of the Key
stone State Construction Companys sub
way contracts.
President Louchheim, of the contract
Ing company, has not been invited to
the conference and nothing of definite
character is anticipated because of the
many sides to a settlement that will
have to be taken up If the plan, out
lined by the company as satisfactory. is
TO be carried through. He will likely
oe invited to conferences held in the
future. when negotiations reach a point
where his presence is imperative.
The Keystone Company holds contracts
Tor the Arch and Locust streets subway
sections and was awarded but never
given contracts for two sections in North
and South Broad street The company's
other subway undertaking includes the
section under City Hall. This is rs per
cent complete and will be finished dur
ing the coming year.
The contracts On Arch and Locust
streets are the ones tnat the city wants
to stop work on. under it's agreement
with the Government relative to the
completion, during the war. of the
Frankford elevated The amount in
volved in the two contracts sought to
be annulled is $2.9o0,o0O The amount
involved in the two Broad street sub
way contracts. on which work was never
started. is s7,90O,0oo.
Mayors Company Bond Agent
Mayor Smiths bonding company is
agent for the National Surety Company,
which Is on the bonds for the two sub
way contracts off Broad street. This
and other surety companies failed to
put up a surety bond fer the Broad
street work. which has been held up
for many months.
The Keystone Companys proposal 20
settle is somewhat similar to the one
upon which the s2,0O0.00O settlement
was made to the D. ]. McNichol Com
pany in 1906, as the result Of the sus-
pension of work and tne cancellation of
contracts in connection with the Tor
resdale filter plant 1t provides for pay
ment for work and materials fur
nished. materials ordered, percentage
Of profits and a loss of organization
and equipment Preliminary estimates
are said to show that a settlement along
these lines will cost the city between
100000 and s1,000,0O0.
In order to raise any such amount to
cover the Arch and Locust streets sub
ways It will be necessary for the city
to float transit bonds sometime this fall.
Under the ordinance giving the Mayor
and the other officials power to act no
nnaI basis Of settlement or actual set
Element can be made without the ap-
proval Of Councils. In the event of the
i<>Ae atp O.
ment a special session OF Councils might
be called during the summer to ratify
the move.
Rebate on Premiums
- The question of whether or not the
bonding companies are to be released
!. from responsibility through the annull-
ment of contracts and not be asked for
q rebate on premiums already paid for
the guarantee of the faithful completion
Of the work will not be taken up today,
but may be raised at later conferences or
when Councils are finally called upon to
rAtify any agreement.
Mayor Smith, as the owner of so per
cent Of the stock Of the Thomas b.
I Smith Company. the Philadelphia agent
OF the National Surety Company, is
placed in an indelicate position. in the
opinion of independent Councilmen by
2cImR as neeOlldlDT ol d
: scheme that will permit his company tc
escape all liability on bond already
paid for by the city.
In competitive. contracting the con
tractors always charge for the cost o.
the surety bonds in their contracts witt
4 the city, thus making the total premium
payment come from city funds. Th'
surety bonds given by the keyston
: Company proved very remunerative q
ThA fn III
ure of the companies to go on the bond
for the Broad street contract leaves tn
bonding premium question out OF an!
ostlement that may be brought about II
these cases.
CITY Solicitor Connolly is of the opin
ion that the Broad street work has neve
0esn contracted for, even though tn
award was made and signed by ofhcer
of the keystone State Construction Com
x8ay, The city has never, completed tn
contract by the signature Of Mayo
maith.