New-York tribune., 1919-05-23
Court Hears Pleas
On S2O,00O,OO Loan
To Finance B. II. t.
City Protests Issue of Re-
ceivers' Certificates Not
Passed On by P. S. c.; De-
cision Reserved by Judge

Argument on the proposed decree
authorizing Lindley NJ Garrison, re-
ceiver of the Brooklyn Rapid Transit
Company. and its subsidia the New
York Municipal Railway Corporation
and the New York Consolidated Rail
road Company, to issue receivers GER
tificates not exceeding in the aggre-
gate at any time S20,0O0000 10 finance
the three companies, was heard yester-
day before Judge julius NJ. Mayer in
the Federal District Court. All par
ties concerned were represented by
counsel.
Judge Mayer reserved decision on
the application. which mad the appro-
val of ex-Judge Henry Lacombe as
special master, because Of the obiec-
tions raised by Edgar kohler, Assist
ant Corporation Counsel, ex-Judge
Francis NJ. Scott for the Corn EN-
change Bank, ex-Justice Samuel Sea
bury for the creditors committee.
Paul D. Cravath for the noteholders'
committee, and H. V. Poor for the
Central Trust Company.
Charles NJ. Owens. counsel for Re
ceiver Garrison, opened the argument
by suggesting minor changes in the
wording of the draft. Mr.. Owens ex-
planned that the amount to be bor-
rowed would bear interest at 6 per
cent. payable semi-annually. Those
allotted to Mr.. Garrison as receiver for
the Municipal and Consolidated com
panies were not TO exceed $4,000 ,000
and the remaining S4,000,00o is TO &c
to the 3. r. T. to be used to purchas
subway and street cars and equip
ment
Mr. Owens further explained thai
the certificates were to be paramount
and first lien on all property covered
by the mortgages. He also stated i
was the intention Of Mr.. Garrison. g.
receiver of the b. K. r.. to buy from
himself as receiver of the Municlpa
and Consolidated companies. the SIG,
900 900 allotted 10 these corporation
and in that way the entire issue coul
be disposed of to tho public, with III
same standing and discount charges.
attention TO the fact that the deere
did not provide for the Public Servic
Commission passing on the certificate:
Mr.. Poor, of the Central Trust Com
pany, as trustee of the first and re
funding mortgage, stated that the I
r. r. and its subsidiary, the Transi
Development Company, were purel
business corporations, and therefor
> did not come within the iurisdictio
of the Public Service Commission. II
declared as the b. Il. T. was only
financing company, the court had n
power to make the proposed certif
Gates q first lien on property covere
by the mortgage Of the Central Trus
y Company.
: Ex-Justicc Scabury said that of tn
s4000,o00 certificates to be allotted I
the B. r. T., s. 100000 was to be use
N cnlargng a power plant, and 500
900 in the purchase of surface cars H
then called attention to ex-Judge Ls
combe's adverse report on Receive
Garrison's request to issue certificate
s to the amount of 81 100000 to settl
= claims against the traction conce1
for the Malbone Street tunnel djsaste
- These and other negligence claim
= however, will be passed on by cx-Judg
q Van Vechten Veeder, who has been a,
n pointed by Judge Mayer, permaner
T. special master to report on such ma
n ters.