New-York tribune., 1921-09-10
Morgan Holds
[. II. 7. Will PAY
y
Stockholders

as to enable the presentation to these
numerous noteholdcrs Of the reasons
why their interests would best be served
| tension"
Mr.. Morrow appeared as member
of the committee formed for the pro
lection of the company's note and bond
holders and based his opposition to the
receivershp upon his belief chat many
small holders Of securities to whom the
! interruption of income would be Sc
we're hardship might feel compelled to
part with their bonds and notes at a
great sacrifice.
SHOULD be avoided if it is possible"
Confidence Brought Change
At the beginning of his statement.
after reporting on the Improvement in
the financial condition Of the INTERIOR
ough Company since the previous hear
ing, Mr.. Morrow said that. in his opin-
ion, "this remarkable result could not
have been secured had there not been a
universal feeling on the part of the
note holders that the Transit Com
mission was correct wnen it expressed
the view that the interests OF all con-
cerned VIII best be served by a reason
able extension Of these notes
There seems to be a belief on the
| part OF some," he continued chat bond
holders favor receivershps aud fore
closures. if the property upon which
they foreclose their lien intimately be-
comes worth more than the amount Of
the lien. ] do not think there is much
warrant for such belief. Investors
do not lend noncv upon mortgage to
| corporations or to individuals in the
hope of foreclosing the mortgage secur-
ity and ultimately getting more than
their principal. Investors are primarily
interested in the safety Of principal and
| in the on-interruption of income"
The "loose TALK as to the probable
result Of a receivershp came in for
severe censure from the Morgan part
ner, who devoted much of his statement
TO contradictin2 what he believed to
be a general impression as to these
consequences.
''lt has been assumed by mary" he
said, "that if the Interborough Rapid
Transit Company defaulted in its bonds
or notes the city could terminate the
ignoring the s2oo,Ooo,oo Investment
that has been made in it BY private
capital. There is, of course, no war
rant for such belief. The city is the
owner of the subways. 1t has leased
those subways for long term of years
t. the 1nterborough Rapid Transit Com
pany The 1nterborough Rapid Transit
Company has spent its money in MAX
ing improvements and in equipping the
leased property, and with the full as
sent Of the city has mortgaged its lease
hold interest to secure tho people who
furnished it the money to mako those
improvements. Should default by
the lnterborough Rapid Transit Com
pany be followed by a foreclosure the
holders Of the secured bonds and notes
of the lnterborough Rapid Transit
Company would be compelled to buy in
the leasehold and to operate the lease
in order to protect their interests"
Not Financially Interested
Mr.. Morrow was explicit in denying
that j. p. Morgan & Co. are financially
interested in the reccivership applica-
tion.
"The firm has no interest in either
the bonds or the stock of the INTERIOR
ough Consolidated Company" he said.
ut has no interest in any of the sur
lace lnes, nor has 1t ever had The
sole connection of the firm of J. P.
Morgan G. Co. with the transit situa
ton in New York has been as the head
OF the group of bankers who secured
for the Interborough Rapid Transit
Company approximately 100000 900
from the investors of the United States
and Europe in connection with the con-
struction of the extended subways."
Judge Mayer, in announcing the ad-
Journment, repeated his previous state
ment that he would regard a receiver
ship for the Interborough as national
calamity, which he would do everything
in his power to avert.
Former Congressman jefferson NJ.
Levy appeared in the role of tax
payer to declare that the appointment
of receiver in this period Of depres
sion would be contrary to public policy.
Others who appeared we're Elijah ].
lollne, attorney for the Continental
Securities Company, who opposed the
sdJourninent on the ground that the
! lnterborough is insolvent, and Clarence
H. Venner, Of the Continental Secur
, tiles Company, who attempted to recite
some of the history of the note trans.
action, but was stopped by Judge Maver
Trust dOrnnanv An,oJ