New-York tribune., 1919-08-28
Calls ON Hedley to Make
Good Offer to Submit to
an Investigation of Its
Financial C. Con Il It'll o N
Want Vouchers Examined
Asserts hjudicious Expen-
ditures May Account for
Lack of a Surplus Now

The fight of the Interborough Rapid
Transit Company for the Increased fare
TOOK new turn yesterday wnen Mayor
Hylan wrote letter to Frank p He'd
ley, general manager Of the company,
saying he was prepared to take advan-
tage of the offer made by Hedley and
James l.. Quackenbush, the company's
general counsel, to permit an investi-
cation of its finances.
Although the letter will not reach
the Interborough Offices until to. day.
an official of the company, when he
read copy of it as given to the news
papers, said the company gladly would
accedc to the Mayors request for a
complete examination by the city's ex-
perts.
Wants Company's Vouchers
The Mayors letter follows:
"When Mr.. Quackenbush and you ap-
peared before the Board of Estimate
on Saturday, August 16, you said that
you would welcome investigation of
your finances by the city.
"After careful consideration / have
decided to accept your suggestion.
take it that you meant that the in
vestigation by the city would be helped
by the lnterborough and, Of course,
this would mean that not only the
books and accounts but also the vouch-
ers as we'll would be open for the in
spection Of the city.
"Will you please make it clear, by
return mail, if you mean that you will
throw open not merely such books as
might bear out your contentious con-
cerning the company's finances, but
that ALL Of the books, accounts,
vouchers, payrolls, etc, will be immcd-
lately open to study, and that you will
explain to our investigators the true
meaning of any entries which are not
readily understood.
Asks Data for Fifteen Years
Assuming that you meant you would
welcome q real Investigation | am in
structlng auditors to prepare at once
for this Investigation, and, as pre-
liminary STEP may ask that you pro-
vide US with complete list of all
expenditures of the Interborough Com
pany and its subsidiaries and prede-
ccSsors back to the time you took over
The original subway, about fifteen years
ago?
81 would like you to segregate these
expenditures, so that we viii rct all
the costs of legal work. construction,
property, equipment, coal printing and
stationery, costs of all salary lists out
of each six months during the fifteen
years, etc.
"From this you can readily see what
I am aiming at. Fifteen years ago you
had in mind certain railroads. along
with their assets and obligations, and
certain cash in hand. Since that time
you have taken in annually very large
sum of money from the New York pub
lie in the shape oS ive-cent fares.
want the city's auditors to examine
this mass OF data so they can tell ua
exactly what you have done with that
income during these years.
at is possible that you have been
injudicious with your income and that
a different method of expendng your
income might have left you at this time
with a very large surplus. Obviously
if you had very large surplus you
would be in an admirable financial posi-
ton right now.
81 have found with many public
utilities companies there has been a
disposition to take out of the treasures
unwarranted sums for dividends,
bonuses, legal expense and all sorts of
queer expenditures. This normally
leaves the treasures dry and in the
past the treasures have been watered
with new securities.
sometimes an item is reported as
an asset when it is desired to sell Sc
curltles for corporation, and then
that same item appears as a liability
short time later. A case in point is
your exp lanation of the lnterborough' s
$1S,00O,00 surplus to the public when
you were floating a lot of new bonds.
When we asked you the other day be-
fore the Board Of Estimate about this
$4,000, 600 surplus you swept it aside
by explaining that about SS,O00,O0 Of
1T ha' been invested by your company
IN Queens County trolley lines, which
have suddenly become worth very
little in your eyes. 1t isn't quite clear
10 me yet what became Of the other
$4,000 600 surplus.
after | have received the records
requested herein, I shall ask you to
lay before me some further details as
to your methods of financing, your
Investments, etc, but, to start with, |
VIII thank you to advise me at once if
l may expect fulflment of nv
present requests. You will please un-