New-York tribune., 1922-04-01
Company Fails 10 Meet
$1,o5o,000 Obligation
for Lease of "L" Lines:
Open TO Foreclosure
Seizure by City
Threatened Again
HyIan's Resolution 10
Take Over Roads Taken
Up by Board Of Estimate

The Interborough Rapid Transit
Company defaultcd Yesterday on its
quarterly rental of 81 .O5O 600 duo to the
Manhattan Elevated Railway Company.
Deferring payment on this rental,
due under it's contract on January 1
last, leaves the 1nterborough in a sit
uation of extreme gravity. 1t is ex-
posed to foreclosure action by any
one of more than 1000 Manhattan
stockholders who may not feel disposed
to accede to any recommendation from
the Manhattan stockholders committee
represented by Alvin W. Krech. Any
dissatisfied stockhoIdcr could begin &C
ton.
While the lntcrborough dcfaultcd
on its Manhattan lease rental, it met
yesterday at the special meeting of di-
rectors the regular semi-annual inter
est, amounting to S8l3,6 $50, due to-day
on the first mortgage per cent bonds
Of the Manhattan Railway Company.
The main bulwark protecting the In
terborough from q receivership is the
Federal court precedent on Thursday,
when Judge julius NJ. Mayer refused
to grant the application of the Amer
lean Brake Shoe and Foundry Com
pany and the Continental Securities
Company for the appointm of a
efeceivcr.
Seizure by City Threatened
Regardless of possible bankruptcy
proceedings, the Hylan administration
is determined to push the Mayors
threat Of seizure. and the Board of
Estimate and Apportionment referred
to committee a resolution yesterday on
motion of Mayor Hylan requiring the
Transit Commission to give the Inter
borough thirty days warning Of i'm
pending seizure by the city.
Pursuant to the Mayors recent let
ter to John P, O'Brien, Corporation
Counsel the resolution set forth that
the city intended to exercise its
rights and option to terminate the con-
tract and lease" with the lnterborough
and "take possession of the railroads.
unless the corporation fulfilled the
terms Of it's contract to the satisfac-
tion of the municipal authorities.
The default of the Interborough was
made known shortly after the close Of
the Stock Exchange yesterday, when
President Hedley issued the following
statement:
"The Interborough Rapid Transit
Company board, at it's special meeting
this afternoon, authorized the officers
of the company to pay the semi-annual
interest, amounting to $813,660, due
April I, 1922, on the first mortgage 4
per cent bonds of the Manhattan Rail
way Company IS part of the rental,
and s17,5OO semi-annual cash rental.
action upon the per cent dividend
rental, amounting to s1,ob0,000 for the
quarter, due April /, 1922, was de-
ferred by the board for further consid-
Grafton.
"The officers Of the company re-
ported progress and were authorized
to continue negotiations with the rep
resentatives of the Manhattan Railway
Company looking toward readjust-
ment of the rental provisions of the
lease
Back Against the Wall
A Manhattan stockholder, in COM
menting last night on the situation
said: eve are on the edge of big news
concerning the Interborough and it is
likely to break tome morrow morning"
The formal decision Of the directors
of the Interborough in their special
meeting yesterday not to pay the guar
anteed rental is in conformity with
their informal decision two weeks ago
The Interborough people say that they
cannot pay the per cent guaranty
rental on s60,000,ooO Manhattan stock
and that they are willing to take their
tCsntlnued on pase sIx)