New-York tribune., 1922-04-27
t1vlan Board
Moves 10 Take
Over |. Il, T.


Continues from pare ors>
wouldn't have to wait for 1icAneny to
give the order for better service"
Assistant Corporation Counsel ". c.
VI. Mayer. who was present at the meet
ing, said that the board could require
the Transit Commission 10 give the
1nterborouch formal notice OF default
and that the default could be based
on tho testimony of Frank Hedley,
president Of the 1nterborougl' before
the commission, The default having
continued since Mr.. I1edlcy testified,
He intlmatcd that the commission could
be served with writ Of mandamu- by
tine Board of Estimate if it refused to
comply with the resolution.
In the Judgment of tho Transit Com
mlssloners, any proceeding such Is
seems to be desired by the Board Of
Estimate would result in an aneillary
'roceiVcrshp proceeding. which would
be subordinate to tho ono already
started by the American Brake Shoe
and Foundry Company. Before that
takes place. the Board Of Estimate will
have to prove a default OF the part Of
the Transit Commission, aud after this
rather doubtful undertaking is ont of
the way the city would have to satisfy
tho court that the bondholders OF the
company would be protected. The right
to recapture the property through pay
ment for the lines does not accrue
under The terms of the contract until
1929, and then the city would have TO
pay cost plus Is per cent,
What promises to BE- hard battle
between the Transit Commission and
the 1nterborough over the valuation of
the lnterborough s equity in the hie
system got fairly under way Yesterday.
The valuation bureau Of the Transit
CoTmisslon has turned III q tentative
valuation Of the marlborough. placing
the aggregate at S1T4'ooo'ooo, The
company appraiaes its holdings al
100000 900
Edward F. :. Caynor chief of this
auditing division Of the Interborough,
said at yesterdays hearing before the
commission that the Brooklyn tunnel
had cost the lnterborough interests in
all $14,a52,267.6e The commiseior'7
valuation is S9,56a, ,oa154 An item of
1900 600. charged Up on account of
tunnel. was admitted by Mr.. Gaynor
to be due for extra work the Rapid
Transit Construction Company Gan In
tecborough company had to complete
itself because of the bankruptcy Of
one OF It's own contractors. Liti-
cation with the city is now pending
OYER the city's liability for this item,
Clarence ]. Shcarn, counsel for the
commission, seemed to think the item
lad no right place in thc schedule Of
construction cost, as the stock OF the
construction company was owned b.
the Interborcugh
The Intcrborough's claim on items
so far not recognized in the commits
sion's valuations amount to about ST.
100000. Judge Shearn called atten-
ton to an item Of $4,000 for souvenir
books distributed at the opening Of
the original subway. lie seemed to
think IT somewhat of a joke that tho
company should submit bill for this
picturesque celebration.
Belmont Got Big Commission
August Belmont appeared in the
schedule for two substantial payments
for his services, one for $25000o as
commission for underwriting Il $40.
000,0 900 capital stock increase, and the
other of sl12,500 for dscounting the
salo of $16.o0o0oo gold notes.
Legal expenses paid Strong e. Cad
waladcr and Nicol. Anable & Lindsay.
amounted to s178.5s9.53 This item
ment." Mr. Gaynor contending that this
legal advice was in connection with the
roads equipment.
Harking back to the claim of the
Rapid Transit Construction Company
; for work on the Brooklyn tunnel. Mr.
De Ford said to MIR. Gaynor:
"As matter of fact. the Inter
borough Company. operating through
the Construction Company, agreed to
1t had reason to believe it would cost
them from s1o,ooO,ooO to $4,000 600
You wanted to keep the B. r. T. from
coming into New York, didn't vou-
that was one Of the reasons, wasn't it,
and the other reason was YOU hoped
TO mako q profit out of the operation
Of the extension. isn't that so?''
No. said Mr. Gaynor, "primarily
it vas to get to a fruitful terminal"
SO far as this property is concerned
you have received the profit and have
distributed it to your stockholders in
dividends that ran up to 20 per cent"
said Judge Shearn.
Profit Doesn't Matter, Says Edwards
ITO some extent" said Mr.. Gavnor.
Here MIR. Edwards broke in with: "Thc
answer to that is that no matter how
much profit we received, it does not
interfere with or vary the value of this
property, which is devoted to tho nuh
lie service, or the question of what il
would cost to reproduce that property"
The fallacy in your argument is
that the property is the city's nov and
The city has the title to it, said Mr..
Deford.
THE city cannot get it as long a. we
have the contracts" said Mr.. Edwards.
And the contract is worth seS 900
900. ! think we had better bvv the
contract instead Of the road" said
Judge Shearn.
You cannot have one without the
Other retorted the traction LAWYER.
That is matter for argument later
on said Mr.. Deford
Judge Shearn said that the Intorbor-
ough claim for reimbursement in the
sum of sl2,oO0,o0o for the Rrooklvn