The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-07-15

RECEIVER FOR B. R. 7.
SURFACE LINES ALSO
Garrison Takes Charge of
Four Systems on Order of
Judge Mayer.
DEFAULT ON THEIR BONDS
Large Claims Are Outstanding,
Says Central Union Trust
Company's Petition.
DEFAULT ON THEIR BONDS

The receivership Of the Brooklyn
Rapid Transit Company was extended
to its surface lines yesterday. Lindley
NJ Garrison, receiver for the Il. X. L.
and Its rapid transit subsidiaries, was
made temporary receiver for the TOUR
systems which operate all OF the Brook
lyn surface lines except half a mile OF
Independently owned waterfront track
Receiver Gauison's jurisdiction was
extended by Julius NJ, Mayer, Federal
Judge in charge OF traction receiver
ships. on the petition Of the Central
Union-Trust Company, trustee under the
FIRST refunding gold mortgage or the
B. r. T. executed in 1902. The petition
was included in the bill of complaint Oh
the trustee In n suit in equity to foreclose
its mortgage lien.
In extending the receivership Judge
Mayer set August 26 as the day for oral
argument on o motion to declare perma-
nent the appointment of Mr.. Garrison.
Only the subway and elevated lines
Of the marlborough system, the surface
lines of the Third Avenue Railroad
Company and the Eighth avenue hne'
which has Just been separated from the
New York Railways Company. now re-
main outside the receivershps whlcn
protect the lines OF the other systems OF
Manhattan and Brooklyn from their
creditors In the emergency caused by the
Increased costs of labor and materials
Conditions Did Not Improve.
When tine Brooklyn Rapid Transit
Company, the New York Municipal Rail-
way Corporation and the New York Con-
solidattd Railroad Company were placed
In receivership on December III II was
thought best to leave the Brooklyn sur
h. hnn n
their owners. Developments have not
been favorable. Due to their continued
inability to charge an increased fare
three Of the surface line systems failed
&c nay interest charges due July /. Inc
extension of the receivership will operate
to prevent the disintegration of the B. L.
IT. system.
While they were not parts OF the re-
ownership estate, the surface line sys-
TENS are all controlled by the Brooklyn
Rapid Transit Company, the holding
company, by stock ownership or lease.
The receiver has been financing the sur
face lines and operating them. The Ell.
. fects of the extension VIII be legal
rather than practical
When Judge Mayer authorized Re-
ceiyer Garrison to issue S20.0OO.oOO in
receivers certificates Henry V. Poor,
counsel for the trustee under the frst
TO be modified on appeal so that the lien
Of the certificates was not made TO sup
pIant that of the first refunding mort
gage. as il did that Of the remainder OF
the funded Indebtedness of the Is. X. L.
The foreclosure suit and the extension or
the receivership are additional steps
toward the protection of the bondhold-
ers.
Under the 1902 mortgage per cent.
e. nf z
face value are outstanding, of which
$500, 900 are in the hands OF the public
az the remainder SI0.0o0,000 were de-
nosted as collateral for. the $50, cO0.0O0
note issue. with which the dual subway
contract had been financed to date
$4,000 were deposited as collateral
for bank loans and 100000 are In the
B. r. T. treasury.
Systems Affected by Order.
The systems into which the Brooklyn
surface lines are grouped are the Follow
ing: Brooklyn Heights Railroad COM
many. Nassau Electric Railroad Company
Brooklyn. Queens County and Suburban
Railroad Company. and Coney lsla'u anu
Brooklyn Railroad Company.
The B. r. T. owns these companies
hut the Brooklyn Heights Railroad Com
many holds its important lines by lease
from the Brooklyn City Railroad Com
many. Among these leased lines are
those of Fulton street, Flatbush avenue
Court street. Myrtle avenue. Nostrano
avenue ami st. Johns place
II is alleged In the complaint oil th'
Central ITyion Trust Company that thu
n. r. T. has defaulted in interest In
stalments due on its first refundine
bonds on January l and July l. each In
stalment being for more than s45O,oOo
II is added that the subsidiaries nave
been financed by the holding company
and that the best interests of the sys
tenn now demand that 1t be unified in th'
receivership.
The complaint alleges that the sur
face line systems have outstanding lars'
claims for personal injuries and larg'
current obligations. among which arr
claims of the holding company for powe
and repairs. 1t is charged that som'
OF the surface line systems have de
faulted on interest, that others will d.
SO and that TO protect them against tn
suits of creditors who may begin efforts
TO disintegrate the system the extension
of the receivership is necessary.
Williams TO Remain I'm Charge.
Col. Timothy S. williams. forme
president of the b. r. r, is presiden
OF the surface line companies, He ha
been In charge of their operation unde
Mr.. Garrison as receiver OF the b. r. T
This method of administration will no
be changed for the present it was an
nounced at the office OF the b. r, 7
- last night.
Judge Mayer yesterday ordered Job F
Hedges. as receiver of the New Yorl
Railways Company, TO pay interest du
on a note for 100000 held by tn
Guaranty Trust Company. The interes
IN for the period from April last I
October next.
The trust company holds $1,000, 90
Of the railways companys first refund
ing 4 per cent? bonds as security. TIL
loan has been reduced from $1,000. 00(
Judge Mayer directed James II. Shef
field. as trustee in bankruptcy for tn
Intenborough Consolidated Corporation
TO keep intact S43l. $40 now on deposl
with the Empire Trust Company for us
In payment of coupons of Interboroug
Metropolitan A per cent, bonds.