New-York tribune., 1920-01-30
Big Fi1nanciers
May Be Called
La I.R. I. Quest
Continued from page

WIZ NOltu tHc StpCh OF lNtSc ulSIlLu-
tions. He said that if such stock was
controlled by one man he could vote
it in such a way as to repay himself
for all his charity if he donated part
of it.
The witness testified that the sur
plus of $l8,000,00o claimed by the In
terborough at the time of its last loan
included advances of $5 ,059 900 to the
New York e. Queens County Railway
Company; 81 800 coo to the Rapid Tran
sit Construction Company. and $780,
600 deficit on Contract No. 8 and re-
lated certificates. The witness said
that the Manhattan elevated system,
one of the Interborough investments,
had shown a deficit of $771, no in 1918
and $4,l02,711 in 1919.
Bankers Expenses Scrutinizcd
When Mr. Gaynor took the stand.
Corporation Counsel Burr started at
once with the bankers commissions
and discounts arising out of the Inter
borough loans. He testified that on
the last loan of 500 900 the banking
syndicate represented by J. +. Morgan
& Co. received a discount Of $l,7z3,-
720
These expenses, it was testified, were
incurred in floating the other bond
and stock issues:
Issue of $15.000,OOo three-year per
Ctut kOIQ UObcS, Soil W aug NSl DtlIilOuL
& Co., expense, $562, 800.
Issue of $1O,000,0 900 threeyear 5 pcr
cent notes of 1907 sold to William A
Read G. Co. and Lee Higginson & Co..
expense, S675 900
Issue of S25 100000 three-year per
cent notes, 1908. to j. 7. Morgan 6, Co..
expense, S1,265, 900.
First mortgage ) per cent forty-fvc-
year bonds, dated November /, 1907. to
=
$50.
Issue of s52,615, 900 first and refund
ing mortgage 5 per cent bonds, sold to
j. p. Morgan. at an expense Of s3,74T,~
514.
Issue of s107 $4,000 first and refund
ing mortgage per cent bonds, for CON
struction and equipment under Con
tract No. 3, to j. P. Morgan at expense
of $7.01S.050.
Claims Prospectus Cited
Corporation Counsel Burr, comment
ing on the fact THAI the lntcrborough
in its prospectus, laid great stress on
the safety, from change, of the 5-ccnt
fare asked the witness if this was
not due to the downward fare revisions
taking place IN various parts of the
country. Mr.. Gaynor admitted that
this was one of the advantages held out
to the investor, and that the claim
would still be good if the war had not
intervened.
Now, isn't it true that you have about
S50,000,000 invested in things that are
carried as assets in this company which
are really not assets?' asked Burr.
Il would not put ii as high as THAT"
the lnterborough official replied
Asked how much it actually was. the
witness read from a report showing
these assets" totaled little more
than $3o,000,000, including S24.324.0O0
IN Investments and $6,419000 in ad
vances to associated companies. Some
of the investments, the witness said,
earned returns while others did not.
"You carry the excess cost of the
Brooklyn extension, $1l,006, ,165. as an
asset, do you not % asked the Corpora
ton Counsel. The witness replied af-
firmatively. Referring to the Belmont
tunnel, Mr. Burr said:
And you have capitalized that to the
extent of S7.000,0OO? You are still ask
that investment"
II think that is reasonable" replied
the witness
~' Other Accounts Capitalized
The witness admitted that the com
pany had also capitalized $6,323 600
paid for acquiring the lease under Con-
tract No. /, S1,500,O00 in stock issued
to August Belmont G. Co. for services,
and $9,932 1888, the discounts or the
first and refunding mortgage bonds
The witness said the lnterboroueh's
present working capital was about
S4,o000O0, while. an equal amount was
invested in supplies and material al
ways required on hand.
MIR. Burr brought out that, although
the subway contracts with the city
were signed in 1918, out OF the $22,-
100000 of equipment originally called
Tor only S3OO,O0O was contracted Tor
IN 1918; $S.0oo,000 in 1916, $8,00O0O0
in 1917 and 100000 in 1918.
The lnterborough, although 1T is
selling s3,000,000 worth of power y
year. according to the witness, still
purchases some power from the Third
Avenue Railway Company, under some
agreement about which he was unable
to testify.
Switching to the strike Of 1916, M.
Burr wanted TO know what the "cX-
tlaordinary expenses OF $2,024.96 for
the two weeks labor trouble were
paid for. The witness said it was for
the hiring of special men to Guard
barns and cars, others to run trains
and for meals and accommodations OF
this strike breaking force.
No Expenditures Last Summer
Did YOU make any efforts along that
llnc during the strike last summer?"
asked Mayor lIylan, taking a hand in
the questioning. The witness replied
that so far as he know no strike break
crs were hired and no expenditures for
the purpose made.
Mayor Hyan brought out the fact
that some of the mon remained at work
while others quit their posts, although
they were all members OF the same or
ganlzation, the lnterborough Brother
hood. He wanted 30 know whether
President Connolly Of the brotherhood
had not called the strike over the Inter
borough telephone, but the witness SAID
ne could not testify to that. of his own
knowledge, although he had heard the
report.
The name of Raymond f. Almirall,
foreman OF the extraordinary grand
Jury, also was brought into the pro-
ceedings yesterday. Mr.. Burr asked
the witness to furnish to the lnvesti-