The New York herald., 1922-10-10
REORCANIZED r.. 7.
MAY FOLLOW NEXT
Committees Representing
Holders of Various Secur-
tiles at Work.
4 NO CONFERENCE YET
But All Interests Reported
to Be in Earnest About
Undertaking.
MAYOR MAKES COMMENT
Says Any Good in /. r. L. Plan
Originated in Board of
Estimate Report.
MAYOR MAKES COMMENT

REORGANIZATION of the various constit-
uent parts of the Brooklyn Rapid Tran
sit system Is to follow that OF the In
terborough, it was learned last night.
AS the reorganization plan promul-
gated yesterday by the Interborough-
Metropolitan ~ per cent. bondholders
committee has removed one of the big
obstacles to the carrying out of the uni
fled system plan of the Transit Com
mission so the simplification of the b.
r. T. system will bring the unified sys-
tenn nearer to an accomplished fact.
The B. r. T. problem is more compli-
Gated than the Interborough and pre-
sents more difficulties, both legal and
financial 1t is known. however, that
committees representing holders of va
rious kinds of b. r. T. securities have
been working on the situation. but so
far the movement has not reached the
stage of a joint conference. Those
aware of the facts say there can be no
question of the good faith of the under
taking and that it will be only ques-
tion of time until 1t is put through. That
will mark the end Of the receivership.
Where the money will be obtained for
additional financing is not yet revealed.
Says Plan Came From Board.
According to statement made by
NdyOl I1yidH ldSl lhSill NHSttNtI SDOtt
there is in the Interborough reorganiza-
ton plan originated in the report of the
Board of Estimate made public after
their investigation early in 1921
The Mayor said the outstanding fea-
lures of the Murphy plan were:
Il. The reduction in the per cent.
dividend guaranteed to the Manhattan
Elevated Railway Company under the
terms of its lease by the Interborough ::
and
40 The wiping out of the securities of
the Interborough- CONSOLIDATED Holding
Company, including s63,sOs. 900 bonds.
snd the return of the stock held as COL
lateral security for these bonds to the
lnterborough stockholders"
I'm the report" Mayor Hylan said
'the Board Of Estimate distinctly de-
clares the dividend of per cent. paid
to the Manhattan Elevated Railway
Company under the terms of the lease
by the 1nterborough Is utterly unwar-
ranted and should be discontinued The
report of che Board of Estimate dis
tinctly declares that the financial diff
culties of the Interborough were not due
TO the operation of cent fare but
solely to the dissipation of 1nterborough
earnings to the Manhattan Elevated
Railway Company and to wastefulness
and extravaganza in Interborough man
agement with regard to the Manhattan
81" lease"
Sees other simiIarities.
a quotation was then made form the
report ending with the declaration that,
If any contract were to be modified. II
should be the Manhattan lease rather
than the cent fare pact. In this. again.
the Mayor insisted the reorganization
plan followed the directions of the Board
of Estimate report
Referring TO the statement of Mr.
dated Corporation would be wound up
and its securities wiped out. naming
them, the Mayor made this comment:
Like the preferred and common stock
of the Interborough-Metr Cor
poration. it's predecessor. there never
was any invested money value behind
the preferred and common stock of the
Interborough Consolidated Company.
These two corporations were merely
holding devices. the issue of which was
to be used for speculative purposes and
gambling on the stock market The
preferred and common stock were is
sued In order to capitalize the excess
earnings of the subway on a cent fare.
The cancellation of the 4h per cent
bonds and the return OF the S32, 900. .00(
Interborough stock underlying these
bonds TO the stockholders Of the Inter
borough Rapid Transit Company is only
a necessary step in getting back tc
honest financial management. This ster
was suggested I'm the report of the
Board of Estimate"