New-York tribune., 1919-09-21
Beginning of Disintegra-
ton of System Forecast
in Inability to Pay Sum
Due City Railroad Lines
Order of Court Sought
Deficit of $4,000 Month.
ly Said To Be Bar to
Independent Operation

Dsintegration of the Brooklyn troll
ley system began yesterday with the
announcement of Receiver Lindley M
Garrison that the Brooklyn Heights
Railroad Company on October l would
default 100000 quarterly rental for
the twenty-six surface lines leased
from the Brooklyn City Railroad Com
pany.
These surface lines cover 291 miles
of single track and are the main
arteries Of the boroughs street rail-
way system. The lines were leased in
February, 1893. The receiver says the
lines are losing $4,000 month. The
Brooklyn Heights Company already
had defaulted in payment of the Brook
lyn City company's Federal income
tax for 1918 to the extent of $46,034.22,
and the owners paid the tax them
selves to avoid the penalties. Under
the terms of the lease between the two
companies the lines are to revert to
the owners in the event Of rental
default.
Advice Sought of Court
Carl M. Owen, counsel for the re-
ceiver, will apply to Federal Judge
Mayer on September % asking for the
formal order directing the company to
default the rent on the plea that the
receiver has not sufficient funds. He
will also ask the courts advice as to
what policy the receiver must take
toward future possession and opera
tion Of the lines. At the same time
counsel for the leased properties will
appeal for the return of the lines to
the owners in case Judge Mayer per-
mits the default.
The lines affected include Avenue C,
bushwick Avenue, Calvary Cemetery,
Court Street, Crosstown, Cypress Hills,
Flatbush Avenue, Flushing Avenue,
Flushing Knickerbocker, Flushing
Ridgewood Fulton Street, Gates Ave
nue., Graham Avenue, Grand Street,
Greenpoint, Hamilton Avenue, Lorimer
Street, Myrtle Avenue, Nassau Avenue,
Nostrand Avenue, Putnam Avenue,
Richmond Hill, Sixteenth Avenue, Six
ty-ffth Street-Bay Ridge, Sixty-ffth
Street-Fort Hamilton, Thirty
Street-Fort Hamilton, Tompkins Ave
nue. and Union Avenue.
Independent Operation Doubtful
Independent operation of the prop
erty was considered a doubtful expert
ment, traction officials said. Financial
experts have reported to Receiver
Garrison an estimate of monthly def
cit amounting to $4,000 for a period
up to August 80, 1920. They declare
the operating expenses are $4,000
over the operating receipts.
Officials of the Brooklyn City Rail
road reported last July surplus of
100000 in cash and investments. With
this money the lines could be run only
for four months at the present esti-
mated loss.
Actual transfer of the properties
would not take place until December /
as the lease provides that separation
of the companies would permit sixty
days OF grace from the time of default
The Brooklyn City company organ
lzed yesterday special committee to
safeguard the interests of the stock
holders. Frank Lyman, president of
the company, notified the stockholders
that non-payment of rent would pre-
vent payment Of the October dividend
None of the officials had agreed what
terms to ask Judge Mayer, although
1t was indicated that there was consid-
cradle sentiment in favor of the inde-
pendent operation project.
Committee to Guard Stockholders
In addition to Mr. Lyman the spe-
clal committee includes Henry F.
Noyes, vice PRESIDENT; Alfred R. Horr,
James Tlmpson and Harold T. White.
1t was also learned at the B. R. T.
offices that Mr. Owen will ask judge
Mayer to straighten out the power
problems of the B. r. 7. subsidiary
lines. Authorization will be asked for
an issue of receivers certificates for
the lines which owe large power bills
to che B. R. T. The Brooklyn Heights
company will owe the receiver S6O0. 900
on October 1. It's debts to other power
companies are $718,880 to the Nassau
Electric Company, 100000 to the
Coney Island and Brooklyn Company
and $l18,OOO to the Queens County and
Suburban Company.