New-York tribune., 1920-01-22
Stockholders Received
$500, 600 More Than
Company's Net Income,
Estimate Board Is Told
sl.500,0O0 Stock
Given to Belmont
1877 P. C.. Paid ON Stock
in Is Years; Equipment
Schedule Never Filed

The Interborough Rapid Transit
Company paid out more than s6.00O,O00
in dividends in 1918. although its net
income for that period was $500. 900
less. according to testimony brought
out yesterday when the traction III
vestigation of the Board of Estimate
got in full swing with the examination
Of its first witnesses.
Mayor Hylan presided at the two
sessions held during the day at the
City Hall Testimony given by Inter
borough officials, or elected on cross
examination conducted by Corporation
Counsel Burr fol the city, was to the
effect that:
August Belmont received S1,500000
in marlborough stock for promoting
the organization of the company.
Chief among Mr.. Belmont's ser
vices" was the acquisition Of the
City Island monorail franchise, which
was never utilized, and was finally
sold for $27 900.
The Interborough never has filed
schedule of its equipment, as re-
quired by its contract with the city
terborough company in the original
subway and its extensions amounts
to S77,414,139.
An Interborough surplus fund of
s20.0OO.OO0 was used in ciectrifying
and third tracking the elevated sys-
tenn andsin substituting the New I Iork
and Queens County Railway line,
which has been on the verge of in
solrency.
Equipment Schedule Never Filed
The council chamber at the City Hall
had been changed to resemble court
room when the proceedings got under
way, at 1920 o'clock. Tables had been
placed at the front of the room for
Corporation Counsel Burr and his as
sstants and for James L. Quackenbush,
interborough attorney, and large
squad of lawyers, accountants and Of
hcials from 100 Broadway. A chair at
the end of the semi-circle used by the
board members was set aside as wit
ness chair, and stenographers were in
stalled nearby
Mr. Burr opened the inquiry by stat
ing the purpose OF the hearings and
called upon William J. Fullam, as
sistant counsel to the Rapid Transit
Commissioner, TO take the stand and
Identify copies Of the original subway
contracts. After reading the section
referring to the fling OF schedules OF
equipment every six months, Mr.. Burr
asked Has any sAh schedule been
fled"
no. ! have examined the records !;
not to my knowledge" replied the wit
ness.
$50 that this section has never been
complied with ?" the Corporation Coun-
se asked
no" replied Mr. Fullam.
Auditor Tells of Financing
EDWARD +. J. Gaynor, auditor for the
Peterborough, WHO was on the stand at
Goth morning and afternoon sessions
vas then called. He said that he had
complete lisJ OF Inc subway construc-
non and equnmen. vouchers, conpris
ing between 10000 and 10000 relating
10 construction and 10000 TO equip
ment
ar. Gaynor testified that the equip
ment account Of The interborough
company showed from December 81
1888, to November 20, 1919, the total
aufn OF s33 ,0s5,983 under contract No.
ana sl,ZOs.s1a under contract 10. z.
sE. Gaynor was asked 20 describe
ne relations between John B. Nc.
Dona!d, the subway contractor, the
Aapad Transit Construction Compan,
ana the lnterborough He said Tho
sonstruction company wae formed
WIN capitalization Of g6 900 900, Il
AIRY out the project Of Mr. Mcdonald
ay 1t alone.
w;.1 "ao a were the people ASSOCIATED
*i.h Nr- McDonald," asked MIR. Burr
nIgas' belmont. Cornelius Wander
Dn', Matter &. Holden, ANDREW Freed
w., Yen, j." "Asiam A. Read and George w
'"2hx, the witness sad.
sl,5e0.000 to Belmont
.noer cross-ezamination Nr. Gayno1
,.eo tina. 81 800 900 in zsock Of IN.
inhssrborough had been jsannd ~ w
.s'"'"at for his nervices in orvanizin,
Sss las company. r. II. La Cuardia. prcgi
~ a' of the Board Of Aldermen. wh,
been following ths proceeding,
was.pi'y' caused ripple Of laughte
-. ILLS man Belmont alive 1,'
ssol,.T much 90" Mr. Quackenbusl
~ ,y'so- 81 spoke 70 him yesterdav
:ire. ~ VIII DC glad 10 appear here an,
"l.s as you wiEh" '' "''
him . ssnwgnc say ne would Ike 70 hea
" " mr. La Goardia sad. ' ~'
Aej,an.s .isYnor testified that when M
he .iia.n ss,1 turned over his untcrest Il
ne reesi''aJ eontfae.s ~ the nnancier
s,,rl l~sslssd sd @z.10o,o0D in interbofo,,vl
jsfes @ ..' one e-quarter intefezt an.
VI sasfx2y't y't s,ae5 shares. in aaai,inn ~ "''
h. fyf~n ',, yearIy zalary for 4he car" r~nt ~ q
'sf Cent Dividend In One Year
", "1ysr 2y Hylan, Mr. La cna,d,a ~,
n b,sn bwns. all took hand al this poIn
raId~ aId~lms.ng out the high dividend
~1 me lnterboroaxh In In. ma
,"attnped nm r,ags three
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