The New York herald., 1922-10-09
I. X. T. is REORGANIZED
AND FIVE CENT FARE SA WE'D

stock. which will be held by the stock
holders instead OF by holding company.
mo dividends can be paid upon the
lnterborough Rapid Transit Company
stock for five years and in no year can
the dividend exceed per cent. Thus
provision is made against Interborough
stock being a speculative security and
against the payment of excessive and
improvident dividends.
ANY earnings in excess of per cent
upon the Interborough Rapid Transit
Company's stock must remain as a re-
serve against lean years or for use for
additions and betterments or to retire
capital securities thereby reducing the
nXed charges resting upon the enterprise.
Saving for Security Holders.
The consummatlon of the plan.
avoiding as IL does receivership and
the disintegration of the system, saves
the security holders from heavy losses.
This IS especially true in respect of the
II terborough-M Metropolitan Az per cent
bonds, of which there are about $500
holders, of whom nearly half are wom-
en- estates, trustees, savings banks.
trust companies, insurance companies
ard educational and charitable institu-
tions.
'rhe holders Of these bonds have re-
eeived no benefits from the dividends in
excess of per cent upon Interboroush
Rapid Transit Company stock paid
curing the years of liberal earnings, as
the return upon the bonds was limited
TO 4 y per cent. Yet as soon as earn
.nsS declined, default in the payment
OF interest upon these bonds was made
THIS default has continued for more
than three years. The present plan. pro-
vldlng for the distribution of the stock
or the lnterborough Rapid Transit Com
pany among the bondholders, affords
rem substantial ground for hoping that
II conditions improve they will receive
reasonable return-a return limited 60
per cent upon the stock, which is only
31a per cent. upon the surrendered
bonds
The 400 holders of Manhattan
stock, the 1S.60O holders of INTERIOR
ocSh per cent. bonds and the 1000
holders Of Interborough per cent.
notes, are saved the delay, confusion
and expense and probable interruption
OF income which would have resulted
from an lnterborough- Manhattan re-
ceivership.
Plans for Paying ON Notes.
Provision is made for paying off 10
Per cent. of the S3S.144G00 of INTERIOR
ough Rapid Transit Company notes
(most OF them bearing per cent inter
csO and converting the balance into
ten year notes with interest reduced TO
per cent. 1t is confidently expected
that the conversion privilege offered to
roldefs or the extended notes will result
IN their conversion before maturity into
per cent first and refunding mort
sase bonds maturing in 1865.
tage to the city and to the public i'm
avoiding the disintegration of the In
terborough- Manhattan system and in
insuring the continued operation of the
SUBWAY and elevated lines as single
sy stem with five cent fare
FINALLY, we submit that the present
plan may fairly be regarded as an i'm
portant step in the direction of carry
ing out the commissions comprehen-
sive plan embracing all the traction
properties of Greater New York
THE saving of the<Interborough- Man
haitian system from recelvership and dis
solution will make possible a much
earlier consideration of the commits
sion's plan than would otherwise be
possible"
The Interborough also has filed with
the Transit Commission its petition for
permission TO issue and dispose of the
new securities. The application, which
Is signed by Frank Hedley, president
and general manager of the corporation,
sets forth that 'the entire contemplated
issue has been underwritten by a re-
sponsible syndicate, at par and ac-
crued interest. upon the undertaking by
petitioner, in the event of it's ability to
issue said notes, to pay to such syndi-
cate as a commission or consideration
for its underwriting, the sum of $780,
500
That it is proposed. with the approval
of the commission, to issue said new
notes under and pursuant to an in
denture between petitioner and the
Guaranty Trust Company of New York
as trustee"