New-York tribune., 1922-03-20
B. II. 7. Owners
Aim to Sue Citv
For 20 Millions
Threat Contained i'm Letter
Written Transit Board by
Protective Committee in
Behalf of Stockholders
Find Fault With Valuation
Contract Violation Charged
in Seeking Compensation
for Construction DELAYED

The protective committee of stock
holders of the Brooklyn Rapid Transit
Company. in letter to George Nc
Aneny, chairman of the Transit Com
mission. made public Yesterday threat
ems to hiring suit against the city to
recover $40, ,ooo, 900 as compensation for
the delays in construction that are de
clared to have put the company in the
hands OF n receiver.
The lct'er severely condemns the re-
cont valuation reports OF the commits
SION. and charges the city with fragrant
violation of its contracts with the
company.
The letter lis an expression Of the
views of the committee. which repre-
scnts moro than 10000 invcstors. own
ING S7d,000.000 Of stock 1t is headed
BY Albert II. Wiggin, president of the
Chase National Bank The other Nom
bcrs arc Charles A. Boodv. preside of
tho Peoples Trust COMPANY, of Brook
lNn; Frederick II. Ecker, vice pre- idcnt
Metropolitan Life Insurance Company;
Seward Prosser. acting chairman and
president. Bankers Trust Company;
Galcn /. Stone, Frederick Strauss. Ger
hard Nj. Dahl and Chcllis A. Austin.
" ldc DIN crcnCc seen
The committee contends that the ac-
tual investment in the properties
amounts to 1929, 5000 600 while the en-
ginccrs attached to the commission
have allowed con the basis Of thco-
rctical assumption' only $l5l,o0O, 600.
Because of this great difference the
stockholders give notice to Mr.. Nc
Ancny that they reject the commits
sion's proposal, as it is held that the
valuations afford no basis for a dis
cussion of the plan Of rcadiustmcnt
"for more than three years. the let
ter says, "thesc properties have been
IN rccciNcrshlp, mortgages securing
bond issues arc in the process Of fore
closure, tho operation of the railroads
has been continued under the most try
ing conditions and tho stockholders arc
properly concerned with any suggestion
emanating from responsible official
body bearing upon the future of their
properties"
ST Tcaking on the valuation issue, tho
report says:
"Our consideration of the conclusions
o. your Bureau Of Valuations and the
methods by which they have been
reached, coupled with the manner in
which such conclusions wcrc apparently
received by your commission and com
mcnted upon by your counsel, has con
WINGED W. that the hopes we entertained
for prompt. busnesslikc and unpreiu-
diced settlement of the grave problems
must be dismissed and that the valua-
tons III opposed afford no basis whatever
for disCussion.'
Complains of Injustice
"Wc cannot refrain from cmphasiz-
ing the very great injustice which the
proposed valuations do the rapid tran
sit properties of the company. for the
extension and equipment of which, i'm
conjunction with the new city built
subway lines, os,approXimately S7S. S.0O0,OO0
has been obtained from investors and
expended since 1918. The outstanding
debt against these p'roperties, includ,
ing the underlying bonds, notes and
bonds issued since 1913, with interest
in default, receivers certificates, tort
claims and other obligations, is csti-
mated at over S135, 100000, approyi-
mately $4,000, 900 of which has been
expended since 1913, under the direct
supervision and control of your COM
mission or your predecessors in au-
thority.
"To provide for this debt of over
S135, 100000 your engineers recommend
valuation of approximately $96,000,-
600, or 500 100000 less than enough to
provide for the debt, thus eliminating
completely all stockholders equities in
the properties. In reaching this valua-
ton your engineers have placed net
value Of approximately 22,400,O00 on
the company's extensive elevated rail
road system in the Borough of Brook
lyn, which was given an earning power
under the contract with the city of
S3,500,00o per annum, which capitalized
at per cent (the rate proposed under
your plan), would support a value of
az least $4,000, 900 for the propcrty'