New-York tribune., 1921-11-18
Dridends Given i'm 1917
1910 Exceed Earn.
ings, Testimony Shows
ii Transit Investigation
Solvency Question
Evaded by Auditor
falueless SecuritiesCalI
Assets Z; $65.625,OOO
Made on $2l,62O,OOO

The refusal of Edward F. J. Gaynor,
i bsditor of the Interborough Rapid
fnasit Company. to answer directly a
eaestion dealing with the solvency of
tie company yesterday caused the first
clash in the Transit Commission in
ststgtaon.
After he had repeatedly evaded the
ialerrcgaticn, which George McAneny,
thsiruan of the commission, insisted
several times he respond to, Mr..
Giynor was charged by Clarence J.
Shearn, special counsel Of the commits
ron, with ''dodging and hedging about
idmitting a palpable, disagreeable
het' Gaynor was temporarily ordered
rom the witness stand
1. was also brought out yesterday
Aai in 1917, 1918 and 1919 the Inter
Mrough had paid out in dividends ST.
10000 more than had been earned in
.his period.
Inquiry Into Dividend
Psrt of the examination was based
|u the balance sheet of the INTERIOR
ugh company as shown in it's statu-
ary report to the commission for the
gar ended June 80, 1921, the desire
n the commission being to- ascertain
|shether dividends had been paid out
u surplus, as contended by the COM
|nuy. or out of ca pital.
Mr. Shoarn t,,A,x,r.I - a.
shY the New York and Queens County
hallway Company stock, issued at a
Rr value of over $4,000, 900 and bought
BY the Interborough for s2,s95. .16O. was
carried in the balance sheet at cost
among some $19,O00,OOO of stock of
associated companies, when ID was
shown that the New York Queens line
had deficit Of $4,677,OO and an an
nual net operating loss of $634,s55.
For almost an hour Mr.. Shearn en-
1eayored to get direct answer from
ths witness, who persistently held to
his initial response that he had no
authority to answer the question. but
That he was confident the company had
sbided by the universal system Of ac-
scunting prescribed by the rules of the
eonmission.
Both. Mr.. Shearn and the witness
selo visibly stirred. After comforting
kef moment with Chairman McAneny,
~ Shearn tersely addressed the wit
bess:
The commission is disposed to ex-
sape you from the stand and take such
neasures as may be required to COM
~ : responsive answer"
Witness Must Answer Questions
). M Gaynor, flushing, started to leave
ns stand. but Mr.. Shearn, after q mo-
nsns OF reflection, said that the action
:, ne commission would be held in
s.spsyanes y and that he desired to ques-
Isn 1ds witness further on other
y9sses Of the Interborough's financial
ssssirs .s ~ contained in the balance
according to the rules of the COM
-nsaon, witness who refuses to an
~ questions may be prosecuted for
a .N4Isuemeanor or be made the subject
= Ssoa5empt charges in court.
80 Gaynor will answer the question
Sssa the hearing is resumed next
q. *saoay morning. it was indicated at
oraose Slose 0? the session by James L.
sposough, who said he would advise
~ witness to make response.
n, n. 60 not like to have this hearing
!oulned without purging any ap-
sace Of contempt" said Mr..
Nasezenbush. He went on to explain
w. Mr: Gaynor might have been
,s;nsxhat cautious, adding, "the COM
81, se,ss'on will remember there is GER
~ gentleman in this town named
gs.slce Venner and / am endeavoring
oppcss his activities in court for
purpose Of running this company.
,,.ss venner is president of the Con-
slssl Securities Company Of New
(Ceatinusd IN paas aIx)