New-York tribune., 1919-08-16
The District Attorney Now
Gives Out Letter Inter-
boro Head Wrote Morgan
4 Co. i'll August, 1913
Told of Bright Future
Informed Morgan & Co.
Interboro Would Make
Big Profits OIL 5 Cent Fare

District Attorney Swami made public
last night letter written by Theo-
dore P. Shonts on August 81, 1918, to
j. P. Morgan e. Co., in which Mr..
Shonts predicted a bright financial
future for the Interborough Rapid
Transit Company.
The letter was written in response
to the Morgan firms request for a
statement of the financial condition
and expectations of the Interborough.
The Morgan firm purchased $33 AGO.
600 worth of Interborough short term
bonds.
In the letter Mr.. Shonts quoted the
estimate of independent engineers"
that the company's share of the Inter
borough's yearly income would increase
from $12,440,0OO in 1919 to S21,91O, 900
in 1926.
"The engineers state" wrote Mr..
'Shonts, "that in making the estimates
full allowance has been made for the
unfavorable conditions brought about
by the war"
he Gave Some Figures
Mr.. Shonts pointed out that in the
ten-year period ended June 80, 1917,
the company's gross revenue increased
IA per cent and the net income avail
able for interest mounted 179 per cent.
He held that these figures justified the
expectation of continuing expansion of
traffic and earnings, based on a five
cent fare. Mr.. Shonts notes, however,
that an increase in fare has been ap-
piled for.
"The granting of this necessary in
crease would enable the city - obtain
sooner return on it's investment" he
said.
Mr.. Swami holds that if the facts set
forth in the letter are true the Inter-
borough has no grounds for its claim
for an increased fare. If the state
ments are not true, the District At
torney asserts, the Interborough presi-
dent is liable, under the Penal Code,
for endeavoring to obtain property or
credit by false pretences.
Extracts From Letter
After describing the proposed notes,
their term and security behind them,
Mr.. Shonts said in his letter to Morgan
& Co.:
"The cost of the Interhorough new
supways, elevated extensions and
third-tracking, etc, as originally esti-
mated in 1913, has been paid from the
proceeds derived from the sale of the
company's first and refundng mort
gage per cent bonds, of which $780,
oS5,000 are outstanding in the hands of
the tublis. Largely as a consequence
of the war the cost of completing the
lnterborough new rapid transit system
is approximately $780, 900 more than
the original estimates made in 1913.
Except for work to cost about s6.000,-
600, which is to be deferred until after
the war, the proceeds of this note is
sue will be sufficient to complete the
company's contribution to the cost of
the lnterborough new rapid transit
system, while the city has yet to pro-
vide about $40,0O0,00 to complete it's
contribution
The greater part of the proceeds of
tnls note issue will be expended for
rolling stock and electrical equipment
Story Told in Figures
The urgent necessity of providing
the enlarged rapid transit facilities is
demonstrated by the rapid growth of
trafhc and earnings of the comnanv,,
lines, since the opening of the subway
exclusive Of the subway mileage con
structed as a result of the contracts
made with the city in 1913 for the
enlarged system as shown bv the fol-
lowing figures: