The New York herald., 1920-01-22
SHOW |. R. T. HAS
PAID 1877 PER CT.
Auditor Tells Total Dividends
in Sixteen Years of Com
pany'S Existence.
Si,5oO,oOo FOR Mr.. BELMONT
Books Show He Received Large Sum
for Services in Buying
Car Line.

| That the Interborough Rapid Transit
Company paid it's stockholders total of
1879 per cent in dividends during the
sixteen years since it's organization. and
fiscal year ending June 80. 1e19-the year
in which the company began its fight for
IN increased fare on the ground that revc-
nue. was insufficient to meet its debts
was the most important disclosure yester-
day in the inquiry by the Board Of Esti-
mate into the traction situation, which was
resumed after an adjournment from last
week.
Another development was the disclosure
that $1,50o,oo0 in Interborough stock had
been voted to August Belmont for ser
vices rendered" One OF these services, II
developed. was the purchase for the Inter-
borough OF the old Pelham Bay and City
Island monorail car line for $500. 900.
which the Interborough sold for s27. 900 to
the Third Avenue Railroad system, after
different franchise was procured by Mr..
Belmont Tor its Pelham Bay Park extern
sion. in the Bronx.
rs that man alive?" queried Fiorello IT.
La Guardia, President of the Board of
Aldermen, who was amazed that so much
money was paid to a man for obtaining
franchises. "If so. he should be brought
here as soon as possible"
Would Call Mr.. Belmont.
James L. Quackenbush. chief counsel for
the Interborough, replied that he had
talked with Mr.. Belmont just the after
noon before, and that he would be pleased
to have him present whenever the Board
requested.
The examination Of Mr.. Belmont and
other financiers who were concerned with
the development OF the Interborough is
expected in succeeding sessions of the in
quiry, which promises to be far reaching
In its efforts TO lay bare the real financia,
investments in the system and compare
those figures with the values put on the
property by the corporation officials in
their plea for higher fare.
The amount of the dividends declared by
the company in sixteen years was told
by Edward F. Gaynor. auditor for the
company, upon examination by Mr.. Quack-
enbush and by William p. Burr, Corpora
ton Counsel
IF the interborough had conserved those
dividends 1t would not now be in the con-
dition that IL is" Mayor Hylan inter-
itcted. Now when things are possibly
not as advantageous to the company as
they ought to be, don't you think the COM
pany should go to the stockholders? DON {
you think the company should get its FL
nancial aid from those who enjoyed big
dividends instead Of extorting it from the
pocket of the people?"
"ReIief Only Temporary"
Mr. Quackenbush replied for the witness,
saying that it was too bad the directors
had not the foresight to conserve the divi-
dends and that it would be a nice thing II
the stockholders should help out now. but
that the stockholders OF today were proba-
bly, not the stockholders of yesterday. and
that even then the relief would only be
temporary.
II was shown that the money with which
the I. r. r. paid it's most recent dividends
was borrowed from the Tnterborough Con-
solidated Company. which is under a re-
ceivership. Mayor Hylan's questioning
brought out the fact that there was a
balance OF $4,000 at the end OF the last
fiscal year after meeting interest. sinking
funds and other debts Evasive answers
were given TO his questions regarding
where this money went Mr. Gaynor de-
clared the profit was 81 100000 less than
the fair charges on preferential payments
due.
Horace NJ. Fisher. secretary OF the In
terborough. was called TO explain the
financial manipulations of John B. Nc
Donald, builder OF the subway. under the
name OF the Rapid Transit subway Con-
struction Company. Three-fourths Of the
contract made between him and the city
Mr.. Mcdonald assigned to this company
and the other fourth to the Interborough
company. This fourth amounted to $500
900. MIR. McDonald's associates in the
company. IL was brought out. were August
Belmont. Cornelius Vanderbilt, Perry Bel
mont. Charles w. Morse. Walter c. Oak
man. Andrew Freedman. william A. Read
and George w. Young.
Mayor Hylan asked him what gold
mortgage bonds" to which he had re-
ferred, meant. Mr. Quackenbush came to
the fore and said IL meant bonds redeem
Continued on Page six, Col. Thrcc)