The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-22
Superstructure of City's II,
Surface and Subway Lines
Enters Bankruptcy.
LOW FARES ONE CAUSE
Shonts Explains Wage In
creases and War COndi-
tiOns Had Effects.
OPERATION NOT AFFECTED
Will Fight Effort to Put Origi.
nal /. r. T. Co. Into Courts
Net Income Drops.

James II. Shefield was appointed
yesterday receiver in bankruptcy for
the Interborough Consolidated Cor
poration by Federal Judge julius NJ.
Z Mayer upon a petition signed by Dave
H. Morris and others. representing the
company's bondholders.
The fnterborough Consolidated Cor
poration is the holding company that
controls approximately 81 per cent. Of
the stock Of the Interboroush Rapid
Transit Company; IS per cent. Of the
stock of the New York Railways
Company the green" car lines),
which went into temporary receiver
ship on Thursday, and As per cent. OF
the stock OF the New York Transpor-
tation Company, which operates the
Fifth avenue omnibuses.
While yesterdays developments, in
asmuch as they affect the holding
company only. and deal with the
financial rather than the working end
of the transportation problem, are not
expected to result in any immediate
innovations of management, they
nevertheless added to the general
feeling of unrest that has been ex-
perienced by traction men and the
holders of local traction securities
for the last several months.
Theodore p. Shonts. president OF the
Interborough Consolidated Corporation,
the Interborough Rapid Transit Com
pany and the New York Railways Com
pany, in a statement issued yesterday
subsequent to the latest receivership or
der said that 1t was the intention Of him
self and his associates to hght any fur
ther receiverships to the bitter end.
Mayor Has Nothing to Say.
Mayor Hylan, when informed OF the
courts action said that he had nothing
to say and referred questioners to Cor
poration Counsel William p. Burr. The
Mayor said he had received no notice OF
the application for receivership for the
Interborough Consolidated Corporation
and didn't want to talk about it until he
had examined the papers. Mr.. Burr. no.
titled at his home BY telephone Of the
days developments. said that no might
issue a statement some time to-day.
Comptroller Charles L. Craig contri-
buted the following general information
on the subject:
Everybody knows that the INTERIOR
ough Consolidated Is n holding company
for the tail ends OF the old Metropolitan
Strcct Railway Company" said Comp
trollcr Craig at was organized to un-
load on the public, and IL is n fortunate
thing that the receivership has inter-
fered with the unloading operation.
Neither the receivcrship OF the INTERIOR
ough Consolidated nor of the New York
Railways, Company affect In the slight
est degree the city's contract with the
Interborough Rapid Transit Company
for the operation Of the city owned sub
ways and equipment"
James r. Sheffield, the receiver for
the Interborougn Consolidated Corpora
tion and who may. II the creditors
agree. become the permanent trustee OF
the corporations resources. IL a former
president of the Republican Club and
head of the law firm OF Sheffield &
Belts, So William street. He executed
a bond of $25,000 in the capacity OF
custodian OF the corporations assets
until the creditors meet and elect a
trustee.
Owners OF 55 Bonds Act.
The petitioning creditors, Dave H.
Norris, William r. Ladd and William ].
Fransioli, based their right to act on
ownership of collateral trust Az per
cent. gold bonds OF the Interborough
Metropolitan Company. The INTERIOR
ough Consolidated Corporation was al
legged to be liable for interest owed on
these bonds as the result of the consoli-
datiop~aSI e Inier'ooropsS(> Metropolitan
Company and Finance and Holding
Corporation. Mr.. Morris owns ffty
bonds. Mr.. Fransiou. four; Mr.. Ladd.
one.
Evidence of the bankruptcy OF the
Interborough- Consolidated Corporation
was presented in the form of a tram
script OF the minutes of the meeting
Of the board of directors yesterday.
This transcript follows:
''The president stated that inquiries
had been received from holders Of In
terborough- h-Metropolitsn AZ per cent.
bonds as to whether this corporation
would be In a position to pay the semi
annual instalnnent of interest due on
Anril /. Tho president further stated
that the corporation was not now nor
would II on April l be In possession OF
aufficient cash to meet this liability (:
that the present condition and immediate
future prospects Of the marlborough
Rapid Transit Company were such that
there was no likelihood of a resumption
OF dividend payments on the stock of
that company for some time to come. and
that a continuance OF the receipt Of such
dividends by this company was neces-
nary " the interest on Interboroush-M Met
ropolitan Az per cent. bonds was to be
raid, and that in the circumstances II
was matter Of policy for the board TO
decide whether II would not he advisable
10 commupicatc these facts to the inquir-
ing bondholders and at the same time ex-
press a. Willingness 10 let such further
action y taken In the courts or ether
wise as TO them seems proper. There
fore. after discussion. on motion the
Following resolution was adopted.
..sResolped, That the president be
cerftmusd on slsta Pags.