New-York tribune., 1921-12-08

tnS usRPVSlIiOu VI particular SenbtfMGH
now in offlc., not TO the right or power
Of the city governments to share in the
use Of this plan. The plan invites the
closest cooperation of the city govern
ment at every turn, and so far MS We
are concerned we propose to enter into
that cooperation whenever we car
properly do So"
when speak Of the city," explained
Mr.. Shearn, 81 am referring. Of course
to the city as administered and as II
Is going to be administered for some
ycnrs to come. That has to be taken
into account"
Mr.. Shcarn informed Mr. Williams
that the matter OF transferring the
lines directly to the city and taking the
leases back was debated by the commits.
sion for weeks.
"There are two reasons why the
mechanism that we propose differs
from that which you propose" Mr.
SheRrn went On. zone, that opposition
TO having anything constructive done
might have wrecked the plan. Second
very serious doubt about the legal
phase OF the question involved in the
loan Of the city's credit"
III the latter obstacle can be sue
cessfully overcome and it were pre-
these properties leased directly to il
think l could say at once that we
would be glad to take that view. But
we have to face actualities and exist
ing conditions, and we are bound to
relieve the situation, and, above all
things, must succeed without increase ID
saresT
CAN | want to do is to help you to
the extent Of my ability" assured Mr.
Williams, but he persisted in his criti,
cism OF the board of control.
Immunity Waiver Signed
When Mr.. Williams first was called
to the stand he was asked if he had any
hesitancy IN signing a waiver Of i'm
munity.
Not the slightest" he answered
Mr.. SheaTn said he wished to make
clear that there was no implication
against the b. r. IT. directors i'll asking
this formal requirement..
Questioning the witness regarding
the 1917 dividends, MIR. Shearn asked il
the main purpose of their declaration
was to create a favorable market fol
all B. r. T. securities.
~ think it was n minor considera-
tion," replied Mr. Williams.
"You had in mind then that some
SRI 100000 worth Of your notes were
CO... ic to maturity in July, 1882
"Yes, we understood that"
"And it was vitality necessary tc
finance those notes either by an Issue
Of bonds or BY new loan!'
1--WE assumed by that time that the
bonds would have been salable and
that the city's part of the construction
of the dual system contracts would have
been so far advanced that the earning
capacity Of the bonds would have beer
demonstrated"
Mr.. Williams declared that dividend
payments always had been made on the
strength OF an apparent surplus. Mi
Shearn agreed that this was 80 in con.
nection with the B. R. r., but that i,
was not true with the subsidiary COM
panies.
Dividend Action Upheld
Asked if he did not consd the dec
laration OF the dividends mistake ir
view of what he knew conditions to be
at the time they were declared, the
witness said definitely:
"On the strength Of the information
we then had at hand | would not have
changed my attitude i'll the slightest"
Turning to back pages in the history
of the company, Mr.. Williams said thai
the rcfunding mortgage OF 1902, whicE
amounted to $150,O00,0 900, had bee,
created under the advice Of group @.
railroad authoritea, including f. II
Hartman.
"Mr. Hartman" he said, "used t,
pride himself on financing the railroad.
,cJ, l>o Al
bonds bearing low rate Of interest
Fir. Williams admitted, however, tina
mistake had been made in limiting
to 4 per cent the interest rates on tn,
rcfunding mortgage Of 1902
Justifying the companys borrowin!
Of $4,000,000 i'll 1917, Mr.. William!
said:
IL don't know Of any railroad com
pany, unless it is particularly rich, tha
carries q sufficient working capital t,
take care Of ali its demands They ar,
constantly borrowing, and some time
they borrow in order to furnish tn,
money with which to pay dividends
not because the dividends have no
been earned, but because the none,
representing the dividends has been in
vested in some other way
Mr.. Williams said it was his opinicl
ated by the company il it had carrie,
an accommodating surplus Of from
$5,ooo,ooo to ss,0oO,ooo a year on tn
| books without distributing dividends.
at is dangerous thing" he wen
on, '"for street railway company t.
accumulate any surplus that is get at
able by public taxation or by publ
restriction of one kind or another. |
has seemed to me in late years tina
the only safe surplus of street railwa,
companies as a general proposition i
What is in the pockets of the stock
holders"
Referring to chart which showe
that B. r. T. stock rose from 80 i,
September, 1918, to As a month late,
! Mr.. Shearn said he was bound to as