New-York tribune., 1920-02-04
lnterborough
Paid Bonuses
OF $2,964,837
Auditor Admits on Stand
MOrgans Got Half-Million
for Merely Being Willing
to Finance Corporation
Shonts Given $l5O,OOO
Company Kept $50, 900, 600
in Morgan Bank for Year
at 2R Per Cent Interest

Bonuses of $2,064 1897 have been
handed out by the Interborough to its
officials, bankers and employees since
1905, 1T was brought out yestc rday be-
fore the Board of Estimate in its trac-
tion investigation. Among the pay
ments testified to by E. F. j. Gaynor,
auditor of the company, was one or
S5O0,000 to J. P Morgan e. Co., paid
to the bankers for holding themselves
ready to supply money, although the
money was never called for.
The witness testified that the late
Theodore p. Shonts, former prcsidenv
of the lnterborough, received bonuses
Of $l5O,uO0 in the years 1913 and 1914
for his services in getting the subway
extension contracts with the city This,
1T was testified, was in addition to
President Shonts's salary, which was
100000 year.
Corporation Counsel Burr, Mayor
Hylan and Comptroller Craig, all of
whom questioned the witness, tried in
vain to have the auditor admit that the
nickels taken in on the subway and
elevated paid these bonuses The wit
ness testified, however, that all the
bonuses were charged to the cost of
work under Contract No. g.
Hedley Urges New Subways
Frank Hedley, president of the Inter
borough, was on the stand for short
time toward the end of yesterdays
of ho I,I1 r
that the construction of new subways
was the only solution of the present
transportation nadequacy.
He testified the road was CARRYING as
high as 100000 passengers a month,
admitted that its location was ad-
mirable, but declared that operating
costs had risen rapidly that only an
increased fare would allow for adequate
service at a reasonable return on in
vestments.
Mr.. Iledley's deliberation in answer
the anger of Mayor Hylan.
"Asnwer yes or MOI" shouted the
Mayor as Hedley started on a long ex-
planation. Don't make speech"
AT another time the Mayor banged
MS gavel before the witness was we'll
launched into his reply and angrily
Withdrew his question. Mr. Hedley tes-
tlhed his salary was SG500O wear and
that he derived $1,000 or $4,000 addi-
tlonal year from various inventions
now utilized in the Interborough sys-
TEN. Most of these, it was brought out
on cross examination. were perfected in
the lnterborough workshops.
SS0,000,000 in Morgan Bank
Mr.. Gaynor, the first witness called.
testified that sums as high as $50 O,OOO.-
600 of lnterborough. funds were banked
with j. +. Morgan, and that the latter
paid only 212 per cent interest on it.
Such sums, the witness said, were kept
as long as year at time, being bank
balances held in readiness to carry on
construction work and operation.
The witness said months extra paw
had been given as a bonus to all en-
ployes who refused TO join in the strike
of 1915, and S2O,66S to EMPLOYEES for
efficlcnt service during the Hudson
Fulton celebration
ne witness admitted that he himself
was given a $4,000 bonus "in appre
citation Of valuable services rendered in
the negotiations for subway and ele
waited extensions" Another bonus to
employees was called a "coasting
bonus. This was given to motormen
who saved the most power. and amount
ed to 1901.
The inquiry turned toward the ac
QUESTION and ownership of the Hotel :
Belmont Mr.. Gaynor said that it was
owned by the Subway Realty Company.
an lnterborough subsidiary. but had
been leased and subleascd several
times.
The property, it was testified. was
bought at the time of the subway con-
struction and subsequently improved
by the building Of the hotel. This was
then leased for long term to B. l.. M.
Bates and his associates. the witness
sald, at an annual rental of per cent
OF the cost, which was 81 2.5OO,0O0.
1T was brought out that the property
had doubled in value. but that the
rental had remained the same, being
hxed on the original valuation.
The lnterborough's expenditure Of
more than $2,0OO,OOO during the 1916
strike was gone into in detail vester-
day. Some of the items read bv Cor
poratlon Counsel Burr were: 5000 for
rope, $546 for police Whistles $4,000
lot MAINTAINING general headuuar-
ters at the Hotel Belmont, $46l for
revolvers and ammunition and 5000 OOO
TOR feeding the strikebreakers and en- ,
ployecs Mr.. Burr objected to such
items as S6,S50 for cigars and a har-
Der bill of 5000
RS~ R-cL> &c