New-York tribune., 1920-02-26
La Cuardia Bids
/. r. T. Cut Pay
OF Executives
Reduction of Hedley's Salary
to $25, 900 and End Of
Publicity Department, at
ST, 900 a Week, Urged
No Need for More Fare
New Board of Directors Is
Demanded; the ''Subway
Sun''Is Called Misleading


Sum- Is Called Misleading
Suggestions that the Intcrborougf
Rapid Transit Company might improve
need of an increased fare by reducing
The salaries Of executives. eliminating
much of the work of its law depart
ment, turning out its present board o1
directors" and abolishing it's publicity
department were made at the hearing
in the City Hall yesterday of the Boarc
Of Estimates investigation into the
traction situation.
Major f. H. La Guardia, President OF
the Board of Aldermen, who, as Acting
Mayor, presided, pointed out what he
called the company's Extravaganza
during an examination Of Edward f.
Gaynor, auditor of the Interborough
and of other officials. Among the
economies which Major La Guardia
said the company should effect imme-
diately were:
Reduction of the salary Of Frank
Hedley, president of the Interborough
from $4,000 to $4,000 year.
Reduction of the salary Of H. n
vreeland, director of welfare, from
$4,000 to $4,000 year.
The turning out of the whole board
of directors because they have lost the
confidence of the people, the stock
holders and the bondholders."
Reduction of Law Force
Cutting down the company's law de
partment 40 per cent.
ment conducted by Ivy Lee, who re-
ceives 81 1000 a month for conducting
publicity, including the publication OF,
The Subway Sun" and "The Elevated
Express" which we're characterized as
conveying information to "mislead the
public"
After William ?. Burr, Corporation
Counsel, had stated that the city al
ready had invested $241 100000 to per
petuatc the tive-cent fare and had ncS
drawn q cent of financial benefit to
date, he held UP a copy of the latest
issGe of "The Subway Sum-" which de-
pioted a crowd of people as being in
vestors in the Interborough, and which
said, Only the public authorities can
save these peoples savings"
"The object of 'The Subway Sum is
TO put before the public statements ia
vorabe to the company, is it not?" Mr..
Burr asked Mr.. Lee.
"The object is to take the public into
the company's confidence and make it
acquainted with the facts said Mr..
Lee
who prepares the matter for The
Subway Sun'?'
81 approve of the matter used, but it
goes through the hands of various OIL
cials."
Dividends Not Divulged
"You never tell the public about the
10 per cent and the 90 per cent div-
dends, which amount to millions of
dollars, do you ~
"No. sir"
Did you prepare the beefsteak edi-
torial a few weeks ago."
Il think it was prepared by Mr.. Har-
ris, one of my staff"
"Now, Mr.. Lee, you say you try to
present the facts to the public If |
give you an article will you publish it
in The Subway SUM-"
''lf the article receives the usual ap-
proval of those in authority"
"Ihen, Mr.. Lee" continued Mr.
Burr, 81 will ask you if you will pub
lish in The Subway Sum an article
like this, Mr.. HedleXs testites that we
have been spending money very freely
Since 1903 We have expended 1909 per
cent in dividends, or $65,000,000, on a
capital of S35,O0o,0OO We have no
dividends now. You can't keep your
cake and eat it too"
Mr.. Lee laughed in reply. William
J. Flynn, Director of Public Works
in the Bronx. member of the board
asked Mr.. Lee to "retract" "The Sub
way Suns" statement that "only the
public authorities can save these peo
pies savings"
81 resent this false statement, when
1T has been shown here that the com
money eXtravagantly,' said Mr.. Flynn
II think the company ought to retract
the statement"
Mr.. Lee explained that his depart
ment cost 81, 900 month and expenses
Major La Guardia turned to Mr.. He'd
ley and suggested that the publicity
department. might be dropped as q
means OF achieving economy.
Salary Roll Barred
In answer to questions Mr. Gaynor
explained that August Belmont, as
president of the company, received in
salary for three years ending in 1905
Sl5O,0oo, while August Belmont & Co
received as financial managers $780,
900. August Belmont & Co. was en-
gagged in raising funds for the com
pany, the witness said.
Here Major La Guardia nterposed
With another reference to "The Subway
Sun"
Don't you think" he said. that
;aiongslde of your recent issue where
you nave the splendid American work
ing men and women as holders OF
Your bonds you should have photo.
graph of Mr.. Belmont and his race
i'orses and few other directors who
nave grown wealthy in conducting
she'r own business with more prudence
man they have conducted the INTERIOR
ough,wouldn't you think it fair?v
~ don't think it would be fair" re-
piied Mr.. Gaynor. Il don't think there
Won be any relation between the two
pictures" WV
Don't you believe that the directors
nave duty to exercise the same care
prudence, foresight and intellieence ir
me affairs of q corporation as they De
Tor their own business >" ~
mere IS not the slightest doub,
"oout that said Mr.. Gaynor.
Dld these same men blunder in tbo;,
own ailairs as they did in the Inter.
company?" N'''S VI 'i''
financier's Losses Recalled