New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-01-01
Last of Securities Sold
or Pledged i'm Feverish
Rush 10 Escape Inn
mediate Bankruptcy
Ruin, Says Hedley,
If FareIsn't Raised
Unexpected Aid Comes
When Court Orders
Trustee to Lend Million

BY giving every available asset as
security and selling it's last bond ant
mortgage the Interborough Rapic
Transit Company yesterday managed
to raise the s3,3CO00O needed to save il
from immediate bankruptcy. A million
of this was advanced by the Inter
borough Consolidated Company on an
order of Federal Judge Mayer.
Frank Hedley. president of the In
terborough, made the announcement at
6 o'clock last night after feverish
day spent in canvassing every possible
resource for funds to tide the company
over the first Of the year.
He declared that with every asset
Of the lnterborough pledged or sold
through the transaction nothing but
an increased fare would keep the com
pany from a receivership on july /.
1920, when number of large oblira-
tions must be met
Court Orders 100000 Advanced
Unexpected assistance in avert;ng
disaster came late in the afternoon
"hen Judge Mayer issued an order d.
rectng James r. Sheffield. trustee in
banktuptcy for the lnterborough Con-
solldated Corporation, the holding com
pany. to advancc 81 900 900 to the In
terborough Rapid Transit Company out
OF the funds in his possession The nd
vance was made conditional to the put
ting up of $4,000 by other parties
and the authorization of the ~ per
cent bondholders' committee. headed hv
Grayson NJ. p. Murphy
slr. Hediey, in his announcement.
SAID the amount had been raised bv
Ihe sale OF the company's six months
7 per cent secured notes to various
classes OF security holders and banks
Tor $2,90O0O0 The other 100000 was
obtained by the sale TO the Title Guar
antee and Trust Company of a $3.50 600
pond and mortgage on Brooklyn real
estate
Saved From Receivership"
Mr.. lledley's statement read
The company will have to pay out
on January 2, 1920, for interest and
SINKING fund on its per cent bonds.
the sum of S4,067, ,644, and 81 ,O50, 900 for
rent OF the elevated railroads, or
SOL ,644 in fixed charges.
The cash on hand this morning fell
short Of this sum by S1,500,O00 and
tnere were unpaid accounts for sun
Plies and for taxes of about ST 500
600, leaving So 800 900 in cash short
age.
This amount has been raised by the
sale OF the company's six months 7
per cent secured notes for $4,000 .OOo
and the sale of It's last bond and
mortgage for 100000.
The subscribers who took the notes
ceivership. They have given as Sc
curity practically everything the com
pany owns not already pledged A
good part OF the collateral security
consists OF the amounts due from the
city for WORK done on the new sub
ways, and the payment of these sums
may necessarily be delayed.
Raise in Fare Declared Inevitable
"The company expects that it will be
able to NEE, It's obligations out Of
revenues until April I and perhaps
until June so, 1920, without further
assistance, but it will not be able to
meet its obligations on July |, 1920
from revenues produced by a scent
fare, and it will then have no further
security to pledge for a loan.
"Unless there shall be a readjust-
ment OF the fare in the mean time
there will be nc way of avoiding a
receivcrship next summer.
"Thls will mean the complete ruin
OF thousands of honest investors, and
great public Inconvenience through
the breaking up of the subway and
elevated system. 1t will result in de-
stroying the single fare for many pas
sellgers. 1t is impossible for an i'm
poverished company 10 give as good
l.,
again the company VIII suffer.
"In addition. this destruction of Sc
curi'y values Will make it impossible
ever again to obtain additional private
capital for needed extensions and i'm
provements."
Declared Saved at Last Minute
Nlr. Hedley said that the Manhattan
Railway owners came in at the last
moment after he had obtained pledges
at minute intervals during the day
from every other interested party. He
admitted that the Interborough was
doing tremendously increased" busi-
ness, but even this was not sufficient
to keep the company solvent under
nickel fare.
Mr.. Hedley declared that the Board
of Estimate resolution ordering an in
quiry Of all the traction companies OF
the city was encouraging as an indi
cation that the city officials were get
ting ready to confer with the traction
representa- tjves as tho basis for
solution Of the problem.
1T looks more like getting to-
gether than at any time during the
last year." Mn Hedley said. Il feel
that before an increased fare is brought
about we must be able to sit down with
the parties who order increased fares.
"Worn Out With Investigations
investigations are an old story and
were Worn out with legations.
This is not matter of investigation,
but of what is to be done now The
tendency of the times in New York and
elsewhere is toward municipal owner
ship and private operation. That's
what you have in New York, so far as
the subways are concerned.
THE continuation of the system is
of such Importance to the public and
to investors that | was sure we would
carry over We won't be complicated
with any labor matters until the mid
die of January, when the representa-
tives Of the men have been asked to