The sun., 1919-03-21

Of the reorganization of the Metropoli-
tan Street Railway Company, in which
II Is claimed that the defendant Is liza
BILE for upward of million dollars, and
the defendant will DO without means to
meet any judgment recovered thereon.
THAT there Ia grave danger that the
lines OF the defendant may no longer be
operated In single system, but the
various lines which are now owned or
leased may be broken up and separately
operated: that there In likewise grave
danger that suits may be instituted
against the defendant in respect Of the
claims above stated and that II is cs-
sential to the interests OF the defendant
and to the interests OF the public and of
the plaintiff that the property of the
DEFENDANT should not be sacrificed that
the position Of the defendant is the more
acute by reason of the present bad
financia lsituation of public service cor
porations generally; that there are out
standing unpaid special franchise taxes
Tor the year 1900 against the property OF
the defendant and certain of the lessons
which with interest claimed to be due
thereon amount to approximately $780,
900 that such taxes constitute liens up
on the special franchises OF the COM
! panies affected and that there is likeli-
hood OF steps being taken by officers of
| the city OF New York to sell such lines.
That FOR the fiscal year ended June
| 30, 1918, the result from operation Of
the defendants system was such that the
income OF the year received from all
sources was s1b3.633s7 less than the
amount required to pay the interest on
the first real estate and refunding mort
gage per cent. bonds that for the six
months. December a1.19ls. the DEFENDANT
income of the period wac s73s,1s7.bo less
than the amount sufficient to pay such
interest; that on December 81, 1918, the
defendants corporate deficit was S2l2b.-
03s.32; that all of the defend ants spe-
oial and reserve funds have been ex-
hausted and that the defendant has not
such SUFFICIENT credit to obtain the mon
eys required for the operation Of Its
property
That the said system, together with
all Its appurtenances. rolling stock and
other property, Is now in a reasonably
good condition: that during the last
year the lines owned and leased by
the defendant carried over three hun
dred million passengers. and the average
number of persons employed by the de-
PENDANT will exceed six thousand"
The petition concludes by stating the
action Is taken to conserve the assets
or the company. prevent the filing OF
numbers OF suits and consequent legal
fights by creditors TO obtain priority
which in the opinion OF the plaintiff
might ultimately prevent the defendant
from continuing in business.
In tho answer to the petition. which
was signed on behalf of the New York
Railways Company by James L. Quack-
cnbush and Richard Reid Rogers OF
counsel. the defendant admits all the
allegations contained in the petition and
Joins in the prayer for the appointment
OF receiver "to preserve the unity OF
the system as It has been maintained
and protect and preserve the corporate
franchises privileges and property. to
preserve the corporate existence and
protect and preserve said property. real
and personal. from being sacrificed I'M
der any proceeding which can or may
be taken TO prejudice or sacrifice same
Members OF the Board OF Estimate
were In session as a committee OF the
whole. as usual before the regular meet
ing day Of the board, yesterday afternoon
! when word was brought to them at 30
o'clock that a receivership was imminent
for one OF the Interborough companies
Although they had been told that their
refusal to grant the Public Service Com
tr1ny the right to give increased fares
probabl would result in receivership
for the companies. they said It was the
first intimation they had that action was
| to be taken yesterday. They took no &C
ton on the information and adjourned
before full details were learned.
Mayor Hylan asked Corporation
Counsel Burr TO go to the Federal court
and suggest that coreceiver be ap-
pointed TO represent any interest that
the city might have. Mr. Burr had a
talk with Judge Mayer, who told him OF
the appointment Of Mr.. Hedges as tenn
porary receiver. The Judge said when
argument was heard March 81 TO make
the receivership permanent he would
hear anything the city might want to
| say at that time.
When Mayor Hylan was told later
that the receivership was for the New
York Railways Company he said:
The marlborough people said there
| would be a receiver for these lines. ThSy
have made good their promise"
Only several days ago Comptroller
| Craig declared emphatically that the
Board Of Estimate would not recede from
its refusal to permit the transit lines
TO get an increased fare. He declared
municipal ownership and operation
seemed to be the solution of the transit
difficulties. Speaking about the sub
way and the elevated lines. he said that
IL the marlborough wanted to throw up
its contract with the city he felt that
some way might be found for the city to
finance the lines.