The New York herald., 1921-11-23
HEDLEY TO TESTIFY
ABOUT |. R. 7. TO-DAY
Board Minutes to Be Read and
Members Called in Transit
Inquiry.
sYELLOW Dog rs SOUGHT
lnterborough's Excess Power
Sold at Profit Which Welped
Subway's Showing.
sYELLOW Dog is SOUGHT

Frank Hedley, president and general
Railway 5s. which sold as high as 46.
manager Of the Interborough Napid
Transit Company. probably will be the
first witness called when the TraAst
Commission resumes its examination this
morning at 4S Lafayette street. Clarence
j. Shearn Is prepared to put him through
an exhaustive inquisition concerning the
company's finances and operation
Unless Mr.. Hedley's testimony should
consume the entire day Mr.. Shearn in
tends next to read into evidence salient
portions of the minutes Of meetings OF
the Interborough's board of directors in
1918 and 1919. The minute books were
in his custody yesterday From them he
expects to learn which members of the
board voted for the heavy dividends de-
clared In years when the company's ball
| ance sheet. under what the commission
| and its counsel regard as any fair sys-
tenn of accounting. would have shown
substantial deficits instead OF a book
surplus.
Board Members to BE Called.
Steps have been taken to assure the
presence in person Of members Of the
]. r. T. board of that period who still
are living. 1t is not likely. however, that
any OF them will be sworn and interro-
gated until the hearings are resumed
next week after the Thanksgiving
holiday
f. J. Berwind. chairman Of the execu-
tive committee. is due home from Europe
Saturday. Others who are being sum-
moned as witnesses are August Belmont.
Daniel G. Reid, Morgan J. O'Brien. Brig
Gen. Cornelius Vanderbilt and Thomas
De Witt Cuyler
a cra tor ~ ,,f
sion was occupied in what might fairly
be called n hunt for yellow dog ac-
count" The phrase and it's significance
will be understood by those whose men,
cries go back to the life insurance inves-
tigation conducted by Charles E.
Hughes.
During most of the day. with e. f. ].
Gaynor, chief auditor, in the witness
chair original vouchers were patiently
perused to determine whether they con-
cealed any Joker" or suggested juggling
OF accounts June. 1921, had been Sc
lected at random for this purpose. Ex-
animation OF all vouchers for that period
and their comparison with the accounts
rendered to the commission is labori-
Gus task. '.but Mr.. Shearn regards it as
one highly important
Not trace of anything suggesting a
yellow dog was revealed in the scout
ing. Everything appeared to be regular
and shipshape. The job will be resumed
to-day in a special collateral examina-
ton which IS to be conducted by Charles
MEG. Roberts Of the Transit Commits
sion's legal department. He will make
a painstaling hunt through the Sup
ply" 'legal' and miscellaneous ex-
pense account vouchers, which have not
yet been scrutiniZed.
T.~ ,x,e ~ .x1t sv,F,.
quent5y have been found to afford favor
lite cover for dogs OF the yellow species.
Should the departmental hounds in the
supplementary examination strike a
promising scent at any time Mr.. Shearn
and the Commissioners will take up the
chase instantly in full cry and in the
main hearing room.
PROFIT ON Excess Current.
An II. Eidder. the Interborough's su-
perintendent Of motive power. took the
stand late in the afternoon. His evil
dence showed that the Interborough
from it's power houses sells current to
it's subsidiary companies and others in
large quantities.. The actual cost of
power production was placed at less
than one cent n kilowat hour. II will be
proved later. however. that the INTERIOR
ough sold this current to railway sys-
TENS now jim bankruptcy at charges run
ming up to.almost three cents a kilowat
hour.
Witnesses who are scheduled for an
early hearing are Job f. Hedges. re-
ceiver: Frederick X. Wood, traffic man.
ager, and Mr.. Samuels. auditor of the
New York Railways Company, now in
bankruptcy. When they take the stand
1t will be shown that the Interborough
supplied power to its own surface lines
subsidiary system at large profit to its
subways division. though the latter was
comparatively prosperous. The New
York Railways Company. in turn,
sought TO indemnify itself by selling its
surplus power to certain other surface
railway systems hardly less impecunious
at profits approximately IS per cent. in
excess of cost.
Mr.. Gaxnors examination revealed
the fact tha t the s30.0O0 year formerly
paid to August Belmont as chairman Of !
the board ha s been discontinued for sew
eral years.
Senator Hiram W. Johnson OF Cali
fornia,. specially retained by the city to |
fight the traSsit law. conferred with |
John p. OBrien, Corporation Counsel
in the lat.er's Office in the morning The
Corporation Counsel said they had dis |
cussed transit matters generally" Fur
ther than that neither would discuss |
their talk.