New-York tribune., 1921-12-08
Williams Defends Divi-
dend of $4,OOO,OOO,
With Road Near Fail
ure, as Good Business
City Construction
Blamed for Trouble
Stock Watering Is Denied;
Ex-President and Brady
Promptly Sign Waivers

Timothy S. Williams, president. and
Nicholas F. Brady, chairman of the
board, of the Brooklyn Rapid Transit
Company at the time receiver was
appointed, signed formal waivers of
immunity before the Transit Commits.
sion yesterday. They then presented
explanations in justification of the
poi'cy OF declaring dividends in 1917
when' as contended by the commission
inc company and it's subsidiaries were
"hewing close to the line" of hank.
ruptcy.
Their action was in direct contrast
with that of the directors of the Inter.
borough Rapid Transit Companv. who
last week blocked the efforts of the
commission to get at the course of the
lnterborough's financia, methods bv re.
fusing to testify unless they were per.
mitted to do so without signing i'm.
munity waivers.
Williams Defends Dividends
Mr. Williams occupied the witness
stand for five hours and his testimony
was almost categorically backed up Mr.
Brady. He spoke in support of the paw.
ment of $4,o00,0OO in dividends in 1917
referred to as critical year bv The
commission, during which the company
borrowed a similar amount and was
facing the maturity of $57,OOO.0O ir
notes. 49,
The 1917 dividends were Warranted
Mr.. Williams testified. on the grounds
tnat the company was earning a con.
siderable margin over the dividend re.
quirement, and that it was necessar,
to make investors feel that the com.
pany's credit was good"
he declared there was a "moral obli
CATION" on the part of the directors te
dlstrlpute the surplus earnings, regard
i Tess OF circumstances which could MOI
pc 1oreseen. The payment of the lasI
dividend by the New York Cons solidated
operating company of the b. R. T., OF
the day OF the receivership, December
III. 1913, he described as 8 coincidence
Cause of Receivershfp
Mr. Williams asserted that the re
ceivership primarily was precipitatee
bt,y the failure of the city to complete
IT'S part OF the construction program or
time: The inability of the B. r. T. t.
from the War Finance Board, he said
was contributory cause.
Emphatic denial was made bv Mr.
Williams of the suggestion that the
STOCK OF the company was watered tf
considerable extent. With simila]
emphasis he repudiated the inference
that the directors took advantage O,
the situation to. speculate in stocks.
Equaling IN interest his testim ony
concerning the financial methods of the
3: 4. L. was Mr.. Williams's criticism
OF the plan Of the commission for 8
reorganization of the city's transit
lines. He said it was his opinion thai
the holding company feature of the
commissions plan was not only oil
doubtful legality and open to serious
practical objections, but that it was
not necessary for accomplishing the
purpose.
Political Influence Feared
From the investors point of view. Mr.
Williams said, the objections to ar
intermediate agency were numerous
even assuming that the investors would
be reconciled to a plan of municipa
ownership. Like Frank Hedley, presi
dent of the l. R. T., and other transi,
authorities who have commented or
the plan. he expressed the belief thai
the board of control, as proposed
would present "a great opportunity
for political patronage and profit thai
would not long be disregarded."
Mr.. Williams presented plan Of
his own as an improvement on that Of
the commission. According to his pro
posal, the traction companies woule
convex title to the city at fixed nricf
representing fair value, payments tt
be made in semi-annual instairnents Of
such amount as would amortize the net
cost in a given number of years, with
the option of the city to anticipate
lContinucd on uaQa Slxl