The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-04-22
RAILWAYS SYSTEM
TO Be HELD INTACT
Judge Mayer Refuses to Order
Return of 9th and 9th
Avenue Lines to Owners.
FIGHT ON BIG RENTALS
Receiver Instructed to Make
Survey With Experts and
Seek Remedies.

Judge julius NJ. Mayer or the Federal
District Court denied yesterday the petit
tons OF the Eighth and Ninth Avenue
Railroad companies for an order direct
Ing Job o. Hedges as receiver OF the
New York Railways Company to give
the petitioners possession of their prop
critics. The court also denied the petit
tioners leave to intervene and become
party defendants In the receivership pro-
ceedings
Judge Mayer said that the obvious
thing to do at this time Ia TO keep the
system intact, leaving the question OF
rights OF cwners OF leased companies to
be settled in court at tho proper time.
He said that ne had instructed the re-
ceiver TO employ experts to make a sur
vey OF the system % that remedies for
its situation may be devised on a COM
prehensive basis
II developed from the hearing that the
| lessor companies are not particularly
anxious to get their lines back II the re-
ceiver Is ordered to pay six months back
| rental. For the rent OF the first three
months of this period the parent company
| Is In default under the terms Of the
| leases. The annual rental Is $215,000
for the Eighth avenue and $4,000 for
the Ninth avenue lines, the lessee assum-
ing all taxes.
Blames Excessive Rentals.
The hearing brought the first official
answer made for any of the lessor COM
| panies OF the green car system TO the
charges made by Mayor Hylan and other
| city officials that serious weakness of
the parent company Is the excessive
rentals 1t has had to pay under its leases
with the twelve lines that make up the
most important part OF the system.
| These charges were voiced yesterday
by William P. Burr. Corporation Coun-
| sci, who spoke IN opposition to the petit
ton. He said that the rental paid TO
the Eighth Avenue Company was equiva-
lent to 265 per cent. on its capitaliza-
ton. and that the rental paid to the
Ninth Avenue Company was between IL
and 10 per cent. OF It's capitalization.
81 do not think the lessons are en-
titled to much consideration" said the
Corporation Counsel. Il do rot think
they are entitled to lessen by one day
the period the receiver may find neces-
sary to fully acquaint himself with the
| situation. The New York Railways
Company Is paying sl.934.oO0 in rentals
for subsidiary companies. II the lessons
had been willing to make conce ssions
| several years ago. when the company I
deficit was only $4,000. the receiver.
ship might not have been necessary.
I'VE do not concede that the dissolu-
ton of this system would break up the
| transfer system. Transfers could be
abolished only with the approval OF the
Public Service Commission. We think
however. that 1t is OF vital Importance
TO preserve the unity of the system, and
we are here to aid the court and re-
ceiver in doing this in the public in.
terest"
Michael Kirkland. counsel for the
Eighth and Ninth Avenue companies
said that charges that the lessor com
panies were receiving an excessive renta
were based on a misunderstanding OF
the situation.
The Eighth avenue company wa!
capitalized at 100000 in 1864" III
said, land the capitalization has no
been increased. improvements have
been made out of income The actua
value of the property is three times
what It was in 1864. Its real estate I!
: assessed at s1.9O0.OO0 and its franchise
. Is assessed at 100000 for taxation
purposes.
Mr. Burr says we are getting % !.
I per cent, figuring par value. when pa
value means nothing. II is the real valu
, OF the property that we are entitled t
get a return on
Mr.. Kirkland said that II an effort i
to be made TO preserve the system as I!
stands the receiver should be instructe,
TO persuade the directors Of the New
York Railways Company to find fund
with which to pay the back rental II
said that il was his information tina
both lines have been making money.
7 He said that there are 100 holders o
the stock OF the Eighth avenue compan.
! but that the controlling interest il
closely held. Joseph Tate is president
; Col Henry L. Stimson, counsel 10
the receiver. argued in opposition TO tn
, petition. He said that the receive
found the two lines TO be an integra
part of a system in which finances an
physical operation had become so inter
l mixed that disintegration would b
brought about with the utmost difficulty
He pointed out that four or five othe
lines use tho section of the Ninth avenu
line north of Fifty third street lie sal
that neither line could be operated indie
, pendently with the facilities 1t now ha!
Neither has a power plant.
Col. Stimson said that the receive
asked for time in which to investigat
a conditions before. anybody Is permitte
. 10 break UP the system he found on TAX
ing possession
In denying the request for leave
intervene, the court ordered that III
Eighth and Ninth avenue companies b
placed on the list of>those who will re
c ceive notices of all hearings on propose