New-York tribune., 1922-03-11
Refusal to Pay Rental ON
Manhattan ~ i'm Plan
TO End Lease May Lead
TO Bankruptcy Court
Action Expected
After Marcel, 81
Elevated Go. Urged to
Take Back Old System: :
Service Order Resented

Rand Trarsit Company Is imminent
Immediately after March 81, it became
known ye-terday, on account of the
company decision To pay TO more
rentals TO the Manhattan Elevated
Railroad COMPANY.
An overdue payment Of s1,o6o.ooo
vas to have been paid the Manhattan
company or April for The last three
ronths Of 1921. and this the Inter
borough Las decided not TO pay. The
company. in view OF the insistence by
the Transit Commission that it imme-
diately improve and increase It's ser
wee and provide seats during tho non
rush hours, has decided to force
showdown and take the first steps TO-
ward the abrogation Of the 1903 999-
year lease.
Two propositions were made recently
by the lnterborough TO the Manhattan
COMPANY looking to turning back to the
old company the old Manhattan sys-
ten, together with its extensions since
1908 Alfred Skitt, president of the
Manhattan company, speaking presum-
sbly for the directors and stockhold-
cs, refused both propositions, in eff
ist telling the lnterborough company
mt the Manhattan people are salts
ti with the lease as it is.
Proposal Made by I. Il. r.
The marlborough proposed to the
Manhattan company that it take back
It's old system, including the third
track equipment. extensions and power
houses, at s30,000,000, this sum in
round numbers being the amount the
lnterborough has expended on addi-
tons and Improvements since taking
bver the system almost twenty years
ago. The lnterborough asked the Man
haitian company to pay interest and
sinking fund charge on this s30,000,-
ono, the sinking fund being sufficient
to discharge the major debt ct the end
Of a reasonable period
Turning back to the Manhattan COM
pany its old property would relieve the
Iuterbprough Of fixed charges amount
ing to about S7,6O0,O0e. divided as fol-
lows: Interest on S60,0oO,000 at per
cent, S4,200,00O; interest on bonds,
Sl.6oO 900; taxes, $1,S00,000.
The marlborough officials, from
frank Hedley, president Of the COM
any. down, feel aggrieved at the
Transit Commission for promulgating
at this time its so-called service pol
Icy, which in effect involves radical
and somewhat costly changes, spelling
Increased fixed charges for the COM
sany,
In spite of the fact that Commits
iioner McAneny said on Wedne sday
that there was nothing in the nature
Of threat on the part of the COM
mission in demanding radical improve
msnt in service, the marlborough
Company officials interpret the move
aent as practically an ultimatum, the
carrying out OF which makes it i'm
possible for the company to try longer
TO carry the Manhattan lease burden.
Company Fears Coercion
NJ. Hedley and his associates regard
iuhllment Of the commissions expec
tations as impractica bic under present
operating conditions. They think the
commission is using coercion to force
the lnterborcugh and other companies
70 assent TO the comprehensive one
blg-company plan OF the commission,
with city ownership and private opera
ton. Privately, the marlborough Com
peny. people say that the Transit Com
MISSION is trying to force them to pay
money when they have not got it, and
Sasn they cannot possibly obtain it,
WIN their present contracts and com
mltmente
This is the main reason for the
somewhat desperate expedient of de-
3,su!ting on its lease contract with the
manhattan, which automatically will
.ofee the Manhattan security holders
10 recover their property under re-
ee,Vershlp proceedings.
., IN view Of all the facts, March 81 is
in.sely to prove an eyentful day in the
~ history of the two big companies. If
the present plan Of the lnterborough
~ adnered to it will default on the
gSeroue quarterly payment on that
oeee and on the first quarter for 1922.
- on the same day Judge julius NJ.
ni; %isyer is scheduled to take up two ap-
sEncations for q receivership for the
ssaL'eloorough. The American Brake
s, snoe and Foundry Company has made
sppllca'lon for receivership on &C
.Uunt @ OF the failure of the INTERIOR
sasA 70 liquidate an overdue debt for
materials delivered. This is under
Continued en pass shrsel