The New York herald., 1922-04-12
MURPHY CONFIRMS
I.R.T. FORECLOSURE
Metropolitan Chairman Says
Bonds Will Not Be
Affected.

Col. Grayson p. Murphy confirmed
THE NEW YORK HERALD that holders
OF the Interboroush- Metropolitan Az
per cent. bonds are about to take
steps for acquiring by foreclosure
the ssa.s12.ooo OF Interborough Rapid
Transit Company stock, which since
1918 has been held as security for those
bonds. Col, Murphy. who is chairman
OF the Interborough-Metr ~
per cent. bondholders committee. said:
The proposed plan OF readjustnnent
will necessarily involve the foreclosure
OF the collateral trust indenture under
which the Interborough Rapid Transit
Company's stock is pledged as security
for the Interborough-M Metropolitan AZ
per cent. bonds.
The purpose and effect Of this fore
closure will simply be to enable the
committee to reduce the Interborough
stock to possession. That foreclosure
will In no way affect tho Interborough
Rapid Transit Company or that COM
pany's own bonds and notes"
There are about 5000 holders Of the
~ per cent. bohds. which were mar
kcted by August Belmont & Co. Mr.
Belmont, Cornelius Vanderbilt and
others. who are among the heaviest
holders OF the bonds in question. are
also either directors or heavy stock
holders in the Interborough Rapid
Transit Company. On the consumma-
tion of the foreclosure action $3.50 per
cent. Of the s35.ooo.00o outstanding
|. r. r. stock will be in actual posses
sion of the bondholders.
Corporation Counsel John p. O'Brlen
who fortnight ago was charged by
Mayor Hylan to take certain stems
without days delay for the seizure
by the city Of the marlborough subway
lines and who since then has uttered
several threats. received yesterday an
other commission from his Honor.
Starting with the pending negotiations
for modification Of the Manhattan 81
lease to the /. r. t.. the Mayor informs
Mr. O'Brien that many of the surface
lines operating under leases to the New
York Railways Company controlled by
the Interborough Consolidated Corpora
tion) are in receipt of exorbitant rent
ais guaranteed by the operating COM
pany," and that 1t Is because of these
exorbitant guaranteed rentals that the
New York Railways Company has
shown deficit In operation for the last
several years."
The proposed Manhattan lease adjust
ment, Mayor Hylan says, 'Is not the
only reduction that should be made In
unconscionable agreements existing be-
tween transit corporations in this city
The people have a right to expect that
other contract reductions and modifica-
tions will be made, and they have a
right also to expect the State Transit
Commission Immediately to do it's full
share to bring about these reductions"
Members of the Transit Commission
refrained from comment upon the
Mayors reference TO their duty rs he
sees II. II was pointed out. however,
in the commissions headquarters that
all the evils his Honor complains of In
the matter of exorbitant leases will
expire Of inanition when the city's
transit facilities have become unified
and rehabilitated under the commits.
sions plan OF reorganization.
Mayor Hylan instructs his Corpora.
ton Counsel ito try to induce the Fed
eral Court and the receiver OF tho
New York Railways Company TO pre-
vail on the stockholders of the sub
sidiary surface line companies to agree
to a modification of their leases, so
that the rental payments and other
charges may be reduced to normal