The New York herald., 1922-04-07

ton or this plan VIII not only insure
the continued operation OF the INTERIOR
ough- Manhattan lines as one system.
but will enable the company to mako
substantial improvements in service by
providing the necessary funds for the
purchase OF new cars and other needed
equipment and for other capital pur-
poses.
'"The plan In no way conflicts with
the program OF the Transit Commission.
On the contrary. the Interborough-
Manhattan companies. with their finan-
cial structure readjusted in the manner
proposed. will be in a much better posi-
ton than they now are to cooperate
with the Transit Commission in carry
ing through some comprehensive plan
TO achieve the public objects tho COM
mission has in view.
''The formal agreements embodying
the plan for submission to the security
holders are In the process Of prepara-
ton"
summary OF Main Features.
Attached to the Judges statement
was summary of the main features Of
the plan as prepared by counsel for the
Interborough-Ma voluntary re-
adjustment 1t follows:
Il. The Manhattan rental is to be
payable out Of the earnings of the COM
tined system after the payment OF in
terest charges and is to be at the fol-
lowing rates:
For the fiscal year beginning July
J. 1922, per cent. For the fiscal year
beginning July l, 1923, per cent. For
the fiscal year beginning July 1. 1924.
and subsequent years. per cent.
These preferential payments are to
H. xin%l %lwrA
Manhattan stockholders II the earnings
exist.
Tn case per cent dividends should
be paid in any year upon Interborough
stock. any further distribution Of divi-
dends for that year is to be divided upon
O prescribed basis between the Inter-
borough stock and the Manhattan stock
until the total dividends upon the Man
haitian stock for that year have reached
z per cent.
"2. Provision IL to be made for the
payment Of all existing current obliga-
tons. including the arrears of rentals
at the present rate and taxes under the
Manhattan lease down to July 1. the
beginning OF the next fiscal ycar. Pend
ing the contamination Of the plan no
dividends are to be paid upon Man
haitian stock. but accruing Manhattan
bond interest Is to be paid and Ave pay
ments OF approximately 100000 each
are to be made to the city Of New York
on account of taxes now in arrears on
the Manhattan property.
Provision is to be made to insure the
application Of a proper amount to the
maintenance and improvement OF the
Monhattan property. including the In
stallation OF turnstiles at stations and
rheumatic control doors for cars.
"Ss The interest payments on the
Interborough 8 per cent. first mortgage
bonds and on the secured notes are to
continue uninterrupted. but in order to
increase the amounts available for the
Improvement of the Interborough prop
critics and other capital purposes the
sinking fund In respect of the Inter
borough 5 per cent. first mortgage bonds
is to be waived for a Ave year period.
"a. The Interborough secured notes,
aggregating $3s.144,o0o. maturing Sep
tember l next, are to be extended for
a period OF ten years.
"6. The Interborough stockholders are
to subscribe for $7.000.000 OF new Inter-
borough notes. Such stockholders as
scription are to surrender a portion Of
their stock for the purpose of insuring
the sale Of the notes to others.
"6 1t Is estimated that the proceeds
of the sale Of the notes to Interborough
stockholders, the sinking fund payments
TO be waived by the Irterborough bond
holders and the surplus earnings for
four years above the proposed preferen-
tial. dividends on Manhattan stock on
the new basis will provide for all pay
ments and maintenance in arrears, and
in addition $15,0Oo.000 for capital re-
quirements. chiefly additional equipment.
" A. lnu y
lowance for substantial increases In
service. It is also estimated that by
1925 the Interborough Company's accu-
mulated preferentials will have been
made UP and that thereafter the earn
ings Of the system will provide several
million dollars annually toward the pre-
ferential to which the city Is entitled
under its subway contract All the
foregoing estimates are based upon a
five cent fare.
az. The proposed new securities will
be subject to the approval of the Tran
sit Commission in accordance with
law"
Situation Called Hopeful.
George McAneny, chairman of the
Transit Commission, said:
''The members OF the Transit Com
mission have read with interest the
tatement of the court with relation to
the agreement reached between the In
terborough and Manhattan fnteress In
an effort to avert a receivership OF the
marlborough properties.
''The commission for several months
past, in its informal conferences with
the representatives of the companies,
has insisted that their existing engage
ments must be modified. recognizing
that the lease In its present form. with
provision for the payment of the fixed
per cent. dividend to Manhattan stock
holders as rental, is the greatest single
bar to necessary Improvement Of service.
The agreement, with the several bal
ancing concessions. reached this after
noon represents apparently substantial
move in this direction.
x.-x&