The New York herald., 1922-05-04
I.R. T. ACCEPTS NEW PLAN,
ASSURING FIVE CENT FARE

I mission also received joint letter from
J. r. Morgan, chairman of the Inter
borough Rapid Transit Company bond
holders and note holders committee
Alvin w. Krech. chairman of the Man
haitian Railway stockholders commit.
tee. and Grayson M. p. Murphy. chair
man of the Interborough- metropolitan
four and one-half per cent. bondholders
committee This letter said. in part:
I'm formulating this plan the COM
mittees have sought to work in harmony
with the aims Of the Transit Commits
sion To that end the plan contains the
following provision:
This plan is not intended to conflict
with the ultimate contamination of the
plans of the Transit Commission of the
State of New York. On the contrary,
it is believed that the consummation OF
this plan will promote the public pur-
poses the Transit Commission has in
view. To the end that the committees
may be in a position effectively to CO
operate with the Transit Commission in
accomplishing its aims, each of the three
committees expressly reserves the power
to adopt modified or substitute plan
in accordance with the plans of the
Transit Commission when said commits
sion shall be in a position to take def
mite action respecting it's plans. Any
such modified or substitute plan shall be
subject to the provisions of the next
succeeding article (XvIu.) hereof
Similar to Tentative Plan.
In most respects the perfected plan is
similar to or identical with the tentative
plan first made public by Judge Mayer.
The original amount of new capital to
be provided for, however, was only
$7,000.000. The sum Is now increased
to $15.000.000. largely because Of the
necessity of financing the service bet
terments demanded by the Transit Com
mission Section of the perfected
plan of readjustment says:
ITO provide for capital expenditures
the Interborough company will create it's
ten year per cent. gold notes to the
authorized amount of $15.000,000, Of
which it is intended presently to issue
$10,500.000. The indenture under which
said notes are to be issued shall contain
appropriate covenants on the part Of
the Interborough company that until the
payment of said notes the Interborough
company will not sell or Issue any bonds
secured by its first and refunding mort
gage, except upon the conversion of It's
secured convertible gold notes Cor re-
newals or extensions thereby, or for the
purpose of paying the principal OF said
ten year per cent. gold notes"
Section estimates the amount Of
cash that will be available Tor the re-
quirements Of the plans, as follows:
"a Earnings for the four fiscal
years beginning with July I.
1922. over and above the pro-
posed new fixed charges $11 ,S4e, 600
(2) BY postponement OF sinking
fund payments on 1nterborough
bonds accruing during the three
and half years beginning July
(s) Proceeds OF sale Of SIC. 10000
face value of new 1nterborough
ten year per cent. gold notes. 10000. 900
Total $2e, ,ee1 800
Estimated cash requirements. 80. 23.314. .440
Surplus above estimated require
mentS $6,647 ,O6O
City ana Commission ON Board.
The new provisions for election Of d.
rectors with representation of the city
and the Transit Commission are stated
in section TX. of the plan. as follows:
"One-half Of the directors of the In
terborough Company shall be elected by
its stockholders. The other half shall
be elected in such proportions as the
committees shall determine by, or in the
nomination Of (a) the Transit Commits
sion or other analogous public authori-
ties and the city of New York (if they
elect to avail themselves of the priv
ilege) under an appropriate arrange
ment, (b) the Manhattan Company or
its stockholders, and (c) the registered
holders Of the Tnterborough Company's
first and refunding mortgage bonds.
Unless and until lawful provision can
be made for such election Of directors,
provision for their election In accordance
with the provisions hereof may be made
through a voting trust covering at least
4 majority of the Interborough stock.
which shall be for such period. not less
than five years, and contain such pro-
visions, as the committees may deter
mine. For all purposes of this plan voting
trust certificates may be distributed in
place of stock certificates"
Terms for participation in the plan
by security holders are stated thus:
Holders Of Interborough-Metro
Company collateral trust Al per cent.
gold bonds (secured by Interborough
Company stock originally pledged at
the rate of $500 of stock for each $1,000
bond), may participate in the plan
I'D by purchasing, at their prlnci-
pal amount and accrued interest new
Interborough ten years per cent. gold
notes (to be presently issued under the
plan to the amount Of S10,500,000) to
an amount equal to Is per cent. of the
principal amount of their bonds. or at
their option.
| "(2) BY surrendering go per cent. Of
their bonds for delivery to an under
writing syndicate to be organized to
purchase such of the $10,500.ooo of said
notes presently to be issued as are not
taken by the holders of Interborough-