The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-28
B. R. 7. RECEIVER CAN
BORROW 100000
Judge Mayer Provides for the
Company's Immediate Fl
nancial Necessities.
TAKES CARE OF INTEREST
Former Judge Lacombc to
Pass as Master on Needs for
Additional S13,900,0OO.

Federal Judge julius NJ. Mayer said
yesterday at a hearing on the petition OF
, Lndley NJ. Garrison. receiver for the
! Brooklyn Rapid Transit Company. to be
authorized to borrow nearly $l6,900.o0o
on receivers certificates. that he would
appoint e Henry Laconbe retired Judge
| OF the United States District Court, as
special master to determine conditions
affecting the issue. Judge Lacombe sat
in most OF the litigation connected with
! the receivership of the Metropolitan
Street Railway Company and the New
York. City Railways Company.
Judge Mayer authorized the receiver
TO borrow 100000 for immediate use
with such resources as he has. Chief of
these assets is $1,000, 900 in 4 per cent.
rcfundlng first mortgage bonds of the
r. r. 7. in its treasury. The receiver
expressed confidence in his ability to
meet obligations as they develop.
Interest amounting to s53a.0Oo on first
mortgage bonds of the Brooklyn Union
Elevated Railroad Company and the
Kings County Elevated Railroad Com
pany, subsidiaries of the B. II. l., will
be due on February 1. A default on this
interest might lead to a foreclosure suit
that would jeopardze the dual subway
| contract.
Interest on paper in banks amounting
TO $4,000 Is past due. The B. r. T. has
outstanding bank loans amounting to
$4,000. Cc". Other interest payments will
become due soon. A number OF lawyers
representing banks and Mr.. Bogue OF the
War Trade Board. which holds ST., 000,-
claims.
Paying Interest on Loans.
The receiver said that IT was his in
tention 10 pay interest on loans, but he
would not renew the loans in a form that
would make them obligations against
the receivership. The lawyers assented
20 this and were in agreement that their
clients would not press the receiver to
put up aHditiona. collateral.
Some concern was expressed about
the effect on existing collateral II the 4
per cent. Il. X. T. bonds In the receiv-
er's possession are put in the market
The receiver said he would not take this
course without giving notice TO the credi-
tors
Pau, Cravath. representing the bank
ers who placed 100000. 900 in short term
notes for the part OF the B. r. T. in
the dual subway contract. suggested the
plan adopted by the court. He said:
We know that n sum not to exceed
. < Ia n ha
| erty going until April l, 10 prevent de-
| faults that will jeOpardze the subway
contract. I suggest that the court make
an order authorizing the receiver to
| place temporary loans up to 100000,
| using the credit OF the receiver. and then
refer to the master the question as 20
| the ultimate issue of receivers certif-
c3tes'
! r. Elicit Hodgskin, representing hold
ers of the bonds OF the Brooklyn Union
! Elevated Railroad Company, urged that
! provision be made TO pay the interest
! due February !. He said that there Is a
feeling among some Of these bondhold-
! ers that they may hope to gain by fore
! closing on their mortgage. thus disinte-
grating the r. r. T. system and leopard
!zing the dual subway contract
City Reserves Its Rights.
| CORPORATION NOuNecl W lIIldn =.
! said there was question whether the
company had not already defaulted on
its subway contract. He said that the
| city was interested in the terms under
! which the receivers certificates are to
| be issued
THE bankers who have been raising
! this money heretofore, | presume. will
! be the same group called upon to raise
! this additional money" said Mr.. Burr.
.l.I., 10
| see that this receivership is not made
an occasion for the exploitation of this
! great property"
The Corporation Counsel said that he
| reserved the right to question any part
, of the proposed issue OF certificates
when the matter comes before the Pub
| lie Service Commission.
William l.. Ransom counsel for the
! Public Service Commission. said that
tho receivers action in providing for
| $50 cars. which were ordered by the
commission, was commendable He said
| The cars should he ready by autumn
Mr.. Ransom added. however, that the
| financial practice proposed appeared to
, be continuation of the vicious" meth
! DDS which brought the company TO its
| present situation. He said that the
/ r. T. 7. is a holding company not sub
| Iect to control II has been lending
: luiIhS W lN SUI AdNt me supsIulhIleS on
I their certificates Of Indebtedness II ha.
| accumulated S2l,000,00O in these certif,-
-ates
I He said It appeared to be the plan
! 10 have the surface lines. which are
/ not in the receivenship. issue more Ger
| tifcates of Indebtedness, which are pay
| able within year and consequently
not subject 10 regulation, to the re-
ceiver in exchange for the capital cx-
penditures he is to make for surface