New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-09-02
I. r. t.
Receivership:
May Avoid 1t

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| tconttnusd from page one,
ers Trust Company, which were named
together with the marlborough in the
application of the Continental Secur-
titles Company, also were represented.
| With the exception of an attempted
discourse by Corporation Counsel
O'Brien on the increased fare issue.
which was cut short by Judge Mayer
the chief discussion was between Mi.
Quackenbush and Mr.. ZoIine.
Quackenbush Stirs Up O'Brien
Mr.. Quackenbush drew a retort from
the Corporation Counsel when he said
that for the last three years there had
| been condition OF government in the
| state and city that had left the Inter
borough without any responsible pub
lie officer with which to deal, adding
that now it appeared the Transit Com
mission would work out plan that
would restore the credit of the com
panny;;
nuendo for an increased fare" spoke
up Corporation Counsel O'Brien.
Before Mr.. O'Brien could continue
Judge Mayer interjected, saying: "This
! court is not forum for discussion
| OF extraneous matters"
In asking for an adjournment Mr..
| Quackenbush said he believed the bal
ance of the outstanding notes would be
deposited within few days The total
amount of current obligations he placed
at $1,365, 900, a sum which, he said, the
receipts of ten days would meet
Mr., Quackenbush declared that all
the other creditors We're secured,
pointing out that the city's claim for
100000 was Offset by the 100000
claim which the company had against
it; that the Manhattan Elevated had
as security for its claim the sac ,ooo, 900
worth Of improvements made ON the
road by the lnterborough, and that the
tort creditors We're secured by cash de-
posits made on the filing of appeal
bonds.
IF given An opportunity now the
i company may be able to continue OPP
GRAFTON without going into a receiver
ship" he said.
1--WE ask for a reasonable adjourn
meht In order to avert a receivership,
not only on account Of the company,
but in the public interest Originally
there was $35,000.000 worth of stock
OF, the company issued to build the
subways. Since that time 100000 900
IN per cent bonds and S40,O00,OO0 in
2 per cent notes has been placed at the
DISPOSAL of the public.
1.-The credit of the company is the
only thing that made possible the
building of the subways and their en-
largement, and the credit of the COM
pany is indispensable to the public.
Without. the credit Of the company and
1.-the sale of the securities the upbuild-
4 ing of the city during the last twenty
years would have been impossible. It
pays the most taxes in the city and is
the most useful citizen. The credit Of
the company must be preserved in the
| interest of the public if necessary i'm
provemerts are to be made.
Company Never Defaulted Before
eve have not defaulted ON a single
| obligation until to-day. We have been
slow to pay, but we have paid. No
one is in danger of suffering for the
next few years. AS to the notes, ! APP
preciate that if they are not paid we
will have tc put up the white flag, but
would prefer to put ourselves in the
hands of the courts rather than to sur
| render.
II believe we would be safe in the
hands of the courts, but If the Inter
borough goes into receivership on top
l VI t<@O 1AOOhAyA hdplO &IduSAt WIZ
will ever again buy securities of a
! traction company here ?"
! Launching into an attack upon the
| financial condition Of the company, Mr.
zoiine, whose client holds $4,000 of
the Z per cent notes, questioned the
| ability of the marlborough to secure
| the extension of all the notes, and de-
clared there was a possibility of in
dividual noteholders suing, obtaining
! judgments and levying on the property
It was to AVOID this, he said, that the
suit for receivership was instituted.
| Mr.. Zoline placed the total obliga-
| tons to be met by the company on
January / at $5S,0o0,o00, He de-
| TO be made in face of deficits result
| ing from operations for the last three
years. In 1919, although the business
for the year showed a deficit of $3,0O0,-
600, the company illegally paid out
dividends of over $8,000,000, under pre-
tense Of which it sold the bonds now
falling due, he charged. +.
Unless receiver were appointed
Mr., Zoline declared, the Continental
Securities Company would bring suit
for $4,000, the amount due on the
principal and interest of the notes it
holds.
Replying, WI. QuacRcnDuSn SAID
these payments would be met; that
the 10 per cent. reduction in wages
consented to by the employees would
save s2,600,000 annually, and that other
savings would probably wipe out last
years deficit Of $4,000, 600. Mr.. Quack-
enbush offered to keep the court ad-
vised as to the extension of the bal
ance of the notes, and it was agreed
that should any situation arise which
required the making of an applica-
ton to the court it might be made on
one hours notice to the various in
terested parties.
Following the court proceedings the
Empire Trust Company, which holds
81 per cent Of the marlborough stock
as trustee, filed petition in the Dis
trict Court, asking to be heard in OPP
position to the receivership actions.
The petition stated that the Empire
Trust Company believed the appoint
ment of receiver would greatly de-