The New York herald., 1921-01-31
DELANEY SAYS R. 7.
JUGGLED S42S,OOO
Opposes Items Charged to Ac-
counts in Which the City
Has Interest.


Has Interest.
John II. Delaney, Transit Construc-
ton Commissioner. yesterday inter-
rupted the protestations of the Inter-
borough Rapid Transit Company that 1t
is not making expenses with the ac-
cusation that the Interborough has
charged items amounting to $423.000
improperly against operating expenses.
In accordance with the citys rights un-
der the dual subway contracts. he an
nounced he has served formal notice on
the company of his objection to the dis
position of the items. which notice Is
equal to call for a board of arbitration
to adjudicate the items unless the Inter-
borough acouiesces to the Commits
sioner's views.
The items complained OF range from
S131, ,04714 for publication of the Sab
toGy Sun and the Elevated Erpress and
other higher fares propaganda OF the
company to legal examinations made at
the instance of "Inter-Met" security
holders and a voucher for thorough
consideration of the Brooklyn strike and
of the successful unionizing Of the
Brooklyn roads by the Amalgamated AS
sociation of Street Car Employees with
the assistance of Hearst and Hylan."
Another principal item is the expense Of
examining charge made by Mayor Hy-
Ian to the District Attorney Of conspir-
acy between the Interborough Company
and its Brotherhood to bring on a
strike
Some OF the Objectionable items,
Commissioner Delaney said, are charged
against the subway division of the Inter-
borough while others are charged
against the Manhattan division, or
elevated lines, which are under lease to
the Interborough, in both OF which, the
Commissioner points out, the city Is
financially interested through the dual
contracts
The dual contracts provide that the
Commissioner may object to any exc
penditure as unreasonable or i'm
proper" and It is under that provision
that he has acted. His formal notice
requires the Interborough to transfer
the alleged improper items to "sus-
pense account" pending adjudication by
a board of three, one OF whom is named
by the Commissioner, one by the COM
pany and the third by those two ap-
pointees.
Among the items objected to, said
Commissioner Delaney, are payments
amounting to S130,000 made in 1919
and 1920 to Stone & Webster for ex-
amining into the financial affairs of the
Interborough Rapid Transit Company
at the request of Col. Murphy. chairman
of the Interborough-Metro Az
per cent. collateral bondholders protec-
tive committee.
Objection is made also to s7.5C0 paid
to Price, Waterhouse & Co. for investi-
cation OF Interborough affairs at the
request OF the bondholders' protective
committee.
Another Objectionable bill was that
rendered by the firm OF Nicoll, Anable,
Fuller a Sullivan for $4,000, which in
cluded the expenses of considering tho
Brooklyn strike and the alleged rels tions
of Mayor Hylan and William Randolph
Hearst thereto; the Mayors charge of
conspiracy between the Interborough and
it's employees and other items of like
character.
The Commissioner objected also to the
payment of s15,259.ss TO the law firm of
Hiscock, Deheny & Cowie of Syracuse
phose service was for the purpose of
procuring amendment to the Public Ser
vice Commission law by extending the
Jurisdiction of the Public Service Com
mission over the rates. fares and charges
fixed by agreement with local authors
ties" which would have the effect of
empowering the commission to modify
the dual contracts by which a five cent
fare in guaranteed.
A report of Stone C Webster on the
Interborough Consolidated Corporation
was published and distributed at n cost
of s4.575, of which the Interborough
paid one-half job Il. Hedges as re-
ceiver for the New York Railways Com
pany one-quarter and the trustee In
bankruptcy of the Interborough Consoli-
dated one-quarter, said the Commits
sioner He quoted letter to Mr..
Hedges from Judge julius NJ Mayer OF
the United States District Court, to
whom the report had been made. approv-
ing the foregoing manner of defraying
the expense
Commissioner Delaney also objects 10
charges of $4,000 to interest account
for deficits, on the ground the interest
is improperly charged.
Regarding expenditures for higher
fares propaganda, the Commissioners
statement said
THE Commissioner points out that
the contract provides for five cent
fare and that the expenses OF any prop
aganda or expenditure looking to a
change in the terms Of the contract
should not be charged against the ac-
counts in which the city has interest
but should be betrayed out OF the cor
porate funds of the Interborough Com
pany."