The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-09-01
LRT.CANTPAY;;TRES
TO AVOID RECEIVER
Company Will Admit To-
day 1t Is Unable to Settle
$38,000,00O in Notes.
TO ASK DISAPPOINTMENT
Seeks to Convince Judge
Mayer at Hearing 1t Will
Meet Obligations.
BEHIND IN ITS COAL BILL
Hirshfield Sees Plan to Sepa-
rate Lines and Cut Off
Transfers in Bronx.
BEHIND IN ITS COAL BILL

The Interborough Rapid Transit
Company sent formal notice yesterday
to j. r. Morgan & Co. that it would be
unable to pay the $4,000, 900 of Z PEI.
cent. notes due to-day, the failure to
meet which forms the basis of two
petitions for the appointment OF re-
ceiver answerable by the Interborough
this morning. AS a result none Of the
notes win he paid to-day, II was said
1t was understood also that the In
terborough failed to receive up to lase
night sufficient number OF deposits
OF the notes to warrant the years ex-
tension at per cent. recently APP
proved by the Transit Commission.
In the face of those conditions it
was understood in Wall Street yester-
day that the marlborough was maxi
ing desperate effort to get its finan-
cial affairs into such shape that 1t
could convince Judge julius M. Mayer
in the United States District Court
this morning that the company would
be able to take care of its obligations
sufficiently to make a receivership I'M
necessary.
VIII Seek PostPoaemsnt.
Sufficient success had been made In
that direction. it was reported, to war
rant the 1nterborough, the Guaranty
Trust Company. as trustee. and the
Bankers Trust Company. as trustee, all
defendants in the complaint filed by
the Continental Securities Company.
asking the court to postpone the hear
ing. That. il was understood. will be
the motion OF the marlborough also In
the suit brought by the American Brake
Shoe and Foundry Company:
John p. o'Brien. Corporation Counsel,
who will represent the city, also de-
PENDANT in the suit of the securities COM
pany, is expected to assume an attitude
of watchful waiting before he acts for
the city. He would not indicate yes
terday what his course would be.
As nearly as could be learned only
about rs or so per cent. OF the notes
had been turned in for extension in
dorsement, and that was not regarded
as enough to make the extension pos
sible. II was understood that IL rs
much as 80 per cent. of the notes could
be obtained the notes would be extended.
and arrangements would be made to pay
of such note holders as objected to an
extension. Efforts in that direction viii.
be continued to-day.
Ready to Pay $4,000 Claim.
Should the Interborough and its co
defendants ask for an adjournment this
morning 1t is expected that they will
represent to Judge Mayer that notes are
being deposited in such volume as to
warrant the belief that the extension can
be made and the necessity of meeting |
payment avoided for the present. That |
would wipe out the immediate condition |
Of which both bankruptcy petitions COM |
planned.
1t was understood further that the
marlborough will orer to pay or the
$4,000 claim. protection of which Is
sought in the suit of the American Brake
Shoe and Foundry Company.
1t also was expected that the Inter
borough. answering the securities COM
pany's application. would be able to
show that It has discharged its current
or approximately $3,OOo,OOo,
with the exception of its coal bill. Ar
were being made yesterday,
II was understood, to make a payment
of approximately a third OF the total
on the coal account. with an agreement
upon dates when additional payments
would be made.
The belief was general In Wall Street
that II the marlborough r. able to 60
into court and make the showing above
outlined. the receivership would be
averted.
David Hirshfieid. Commissioner of Ac-
said he was continuing his in
vestigation into conditions and motives
lying back OF the receivership petitions.
and expressed the opinion that the In
terborough favored O receivership for
the purpose of dvorcing the subways
and elevated lines. thereby enabling the
company to eliminate transfers and
Charge double fare at a number OF
points. particularly in The Bronx. The
elimination of ouch transfers. Hirsh-
field said. would cost the riders Of The
Bronx between $1o,ooo,ooos and $751;
600, 900 a year.