The New York herald., 1920-01-30
Declares I. K. T.
Surplus Went in
Big Dividends
Continued from Page one)

expense were provision for feeding anc
housing considerable bodies of men,"
You mean strikebreakers?' asked MP
Burr. Where did these men come fromr'
No Strikeoreakefs I'm Last Strike.
Mr.. Gaynor said they were furnished oy
n firm which specializes TN fsrnishinE mer
IN an emergency"
He said that no strikebreakers were
used In last summers strike. Tho Mayor
asked Mr.. Gaynor II he knew . 'Aman
named Connolly" Q referred to PatricB
]. Connolly. president OF the Interborough
Brotherhood Association and leader OF
the strikers last summer.
YES" replied Mr.. Gaynor.
'Does he work actively for tho eDm-
pany? asked the Mayor.
MT. Gaynor replied tina. ne assumed ne
did. The Mayor then asked Mr. Gaynor
If he knew that last summers strike was
called over the Interborough telephone
and that the strike notice was published
on an Interborough bulletin board. Mr..
Gaypor said he did not know of this.
Mr.. Burr at this point asked Mr.. Cay
nor to obtain data for the Board con-
cerning the alleged appointment of Ray
rnond F. Almiral1, foreman of the Extraor-
dinzry Grand Jury. as a commissioner
to establish the damage incurred through
the construction Of the marlborough sub
way between Manhattan Post Office and
Brooklyn Borough Hall. MIR. Burr also
asked Mr.. Gaynor to learn IL 1t wasn't
true that August Belmont was responsible
for the appointment of Mr.. Almirall as
commissioner.
One of the OUTSTANDING features Of the
hearing was the unlooked-for expressions
of good feeling. Following an explanation
by Mr.. Quackenbush that he desired to
assist in placing all the facts before the
Board, the Mayor remarked:--'Well. the
fact of the matter Is, Mr.. Quackenbush.
we are learning to like you little better"
The general atmosphere was taken by
some to mean that tho Board might in the
near future change its attitude toward the
traction interests and make the necessary
so that the roads may be
allowed to ''rehabilitate themselves finan-
cially."
Leased by the marlborough.
Interest in the affairs Of the Manhattan
Railroad Company arose from the fact
that the elevated roads were leased to
the Interborough in 1903 for period OF
ninety-nine years and are therefore con-
the Interborough. Mr.. Loudoun had tes-
titled that from 1904 to 1917 there was a
profit every year for the Manhattan Rail-
way Company. Beginning with 1918 there
was a deficit of $771, 40. In 1919 the rec
ords show a deficit of s4,10e,711. The same
year the subways made S292,3n.
Mayor Hylan announced early In the
hearing that the purpose In calling j. p.
Morgan and members of his firm was to
discover what the Morgan company got
for helping to float the bonds and notes OF
the Interborough since the beginning OF
subway financing.
It developed during the hearing that the
Interborough has about $50,0oo,000 of its
securities invested in enterprises apart
from the subway. Mr. Gaynor said that
estimate was "a little high" In bringing
out this fact Mr.. Burr's. purpose was to
show that while the Interborough is de-
manding an eight cent fare it still has
enough money to sink In outside enter
prises.
At the beginning of tho hearing Mayor
Hylan read a letter from w. o. Curtin,
which read:-'I am bonafide investor In
$4,000 Inter-Met ~ per cent bonds,
bought at so. bought these bonds on
the understanding that $500 Of I. r. T.
stock was deposited az collateral against
each $1,000 Inter-Met ~ per cent bond.
To pay the interest Of the bonds required
9 per cent per annum on the stock. The
earned and evidently paid q per
cent. What right had the traction Off
cials to pay dividends on the stock for any
purpose other than to pay interest on the
bonds? 1t looks like high finance and is
so high that the stink IL terrible.
thought that you were wrong on the trac-
ton situation, but tho evidence now being
brought out discloses that you are right"