The New York herald., 1921-11-24
PLAN OF UNIFIED TRANSIT
is INDORSED BY HEDLEY

avaiia bic surplus" asked Mr.. Shearn
'and that illustrates your point, doesn't
it,?
The witness assented.
Assets yalueIess to Him.
Mr.. Hedley, who has been the /. r.
IT, president only since the autumn OF
1913, after the death of Theodore p.
Shonts. acknowledged that as an in
vestor he would not pay anything for
certain stocks carried as assets in the
1921 balance sheet of the Interborough
Though admitting these securities to be
worthless from an investment point o!
view. he was unwilling 10 concede that
the properties of the company in ques-
ton. Queens county surface sub
sidiary. are wholly without value.
These properties probably are not
worth as much as Ss.000.o00. the figure
at which they were carried, but 1t has
not yet been determined" said he. what
they are worth. Perhaps it will suffice
for your question that / wouldn't pay
anything for them personally"
well. II they are known 20 be worth
less should they not. in your judgment,
have been written down."
Certainly yes, sir"
"Then. without touching on any other
items, it is perfectly clear, is it not, that
if you had not included In your assets
IS, ,0O0. 600 of worthless stocks and stale
debts you would have shown to this
commission deficit OF more than
81 900, 900 last June instead of surplus
of So, 600, ,000?"
THAT would have been shown" was
the answer. ION the basis you describe.
In my Judgment II is not the way to
make out report but 1t is my firm be-
lief it is the way we were instructed to
make out the report"
Pointing out the misleading possibili-
ties of such a report Mr.. Shearn said:
Here you have some 100000 of
per cent. bonds outstanding In the
hands of the public. They have depre-
ciated approximately to SO. 1t is prob
lem with an investor whether to dump
them or to hold them and the investor
finds filed with the public authorities
and sworn to by the. president Of the
company a report showing a surplus.
He Is bound 20 be misled il he thereby
is led to hold on to his investment"
Ready to Help I'm Middle.
Mr.. Hedley protested he had signed
the report in good faith.
What have been doing more than
anything else since / became presl-
dent" he went on. "is making every
reasonable effort with the hope that
some tribunal at some time in the near
future would be assigned to this job
down here in New York, to see that this
whole traction matter should be
Strengthened out. 1t is my understand
ing you are here for that purpose. and
Iwant to assure you. Mr.. Shearn and
this commission, that you have just
about 100 per cent my cooperation"
The witness repudiated utterly all re
sponsibility for the large dividends OF
the past. He did not even become a
director, he suggested until after the
death of Mr.. Shonts.
The examiner showed that it appeare !
from testimony that the interest on
s19.0C0,00O of bonds has been used for
other than subway contract purposes.
such, for instance, as the buying of the
worthless Queens companies and of the
more profitable investment in the Hotel
Belmont, but that these items will con-
tinue to pc charged against the subway
and that. therefore, no return ever can
be received by the city on its subway
investment until after these interes;
charges have been paid. The same is
true of the Queens company's 5000 OCJ
in unpaid power bills.
Isn't the situation, then, Just about
this with respect to those outside enter
prises. that 1t is a case OF heads the In
terborough wins and tails the city
loses?" asked Mr. Shearn.
We'll, from the Interborough point
Of view that would be a pretty good
bet"
Mr.. Hedley's reference to the probable