borough Rapid Transit Company in the subways under contracts 1 and 2, and is exclusive of the investment of $147,559,000 in contract No. 3. This statement shows a total investment of $77,414,139.05.

Mr. Quackenbush.- Now I may hand copies of this up to the members of the Board?

Q. And the second paper attached to it is what, Mr. Gaynor? A. The second statement shows the sources from which the Interborough Rapid Transit Company derived the moneys which were applied as shown in the first statement. Shall I read it off?

Q. Yes, if you will be kind enough to read that. A. Bonds and notes issued for cash, $52,615,000.

Mr. LaGuardia. What is that?

The Witness.

Bonds and notes of the Interborough Rapid Transit Company issued for cash, $52,615,000.

The Chairman.- Just read that over again, Mr. Stenographer. (The answer was read.)

Mr. Quackenbush. You find that on the second page, your Honors.

A. (Continued.) Capital stock issued for cash, par value, $21,400,000.

Premium obtained on $2,200,000 of stock at 110, $220,000. Stock issued for property and services, $13,600,000.

Mr. Burr.— Have you divided that, subdivided that into what was property and what was services?

The Witness.-I can subdivide it, yes. $9,600,000 of the last mentioned figure was issued in payment of the Rapid Transit Subway Construction stock at the rate of $160 a share; $2,500,000 issued to John B. MacDonald and his associates for the remaining quarter interest in the lease of Contract No. 1; and $1,500,000 issued to Mr. Belmont for his services and for some property; a total of $13,600,000.

By Mr. LaGuardia:

Q. Well, that $9,600,000 represented stock? A. That is stock. Q. Did that stock represent any actual physical property? A. That $9,600,000 of stock of the Interborough Rapid Transit Company, issued in payment for $6,000,000 of Rapid Transit Subway Construction Company stock, represented the acquisition by the Interborough Company of the right, title and interes to $6,000,000 of cash in the Treasury of the Construction Corupany, plus all the rights and privileges which the Rapid Transit Subway Construction had in the original contract No. 1.

Q. Good. So it was $6,000,000 in cash, and the remaining $3,600,000 in the right to contract No. 1?

Mr. Quackenbush.-- Plus $2,400,000 in cash, all shown on page 1, Mr. President.

Mr. LaGuardia.—All right, I will handle this.

The Witness.-- That gives a total security prior to the new contract of $87,635,000.

By Mr. Quackenbush:

Q. The paper which I have reads $87,835,000, Mr. Gaynor. A. $87,835,000. If I said anything else, I was mistaken. $87,835,000. And the subway investment, to which I have just testified, $77,414,139.05, leaves a balance of $10,420,860.95 invested in other sources, to wit, real estate not used in operation $2,644,088.62; advanced on note of the Subway Railroad Company for the purpose of completing the building at the corner of 42nd Street and Park Avenue, $942,022.72; stocks and bonds of associated companies acquired, namely: Subway Railroad Company, capital stock, $2,335,605.83; New York and Queens County, capital stock, $2,895,160.24; New York and Queens County Railway Company, first mortgage, four per cent. bonds, $789,635.74; New York and Long Island Traction Company, capital stock and bonds, $744,779.61; Long Island Electric Railway Company, stocks and bonds, $613,003.63; cost of Manhattan Railway release and I. R. T. expenditures on elevated lines, entirely apart from the contract of 1913, $689,968.46.

By Mr. Burr:

Q. Could you tell us what those expenditures were generally, which you refer to? A. Those were expenditures made by the Interborough upon lines and equipment of the Manhattan Company, which up to this date have not been reimbursed to the Interborough Rapid Transit.

By Mr. Quackenbush :

Q. And have no relation. I think you said A. No relation whatever to the expenditures under the certificates of March 19, 1913.

Q. Prior to that time? A. Prior to that.

Mr. Burr.- Have you got that divided, how much was the cost of the lease and how much was represented by the expenditures? You have it all totaled.

Mr. Quackenbush.-We will give that item.

Mr. Burr.- I thought he might have it now.

The Witnesss.-Yes, I can give you that. The cost of the Manhattan leases, that is, the expenditures directly connected with the acquisition of the Manhattan lease, $51,250, and the remainder of this sum, expenditures upon lines of the Manhattan Railway Company, not yet reimbursed

Q. When you say not yet reimbursed, will you explain what you mean by that? A. The Interborough Rapid Transit Company, up to the time that the contracts of 1913 were made, was constantly adding equipment, rolling stock, new stations and other improvements to the lines of the Manhattan Railway Company. Those disbursements were from time to time made by the Manhattan Company and the amount refunded to the Interborough Rapid Transit Company. In the settlement that was made in 1913, I think it was, there were some disputed items, which amounted to about $416,000, and between that date and the present time we have spent a little over $200,000 for the same purposes.

Q. Those are expenditures claimed by the Interborough Rapid Transit Company to be for the capital account of the Manhattan Railway Company? A. They were.

The Chairman. I just want to ask a few questions.

The Witness.-That gives a total of $11,654,324.73. By the Chairman:

Q. Mr. Gaynor, the Interborough Rapid Transit Company has a lease of the subway, has it not? A. It has.

Q. It also has a lease of the elevated system? A. Yes, sir. Q. Now what relation is the Interborough Metropolitan to the Interborough Rapid Transit, what connections have they, if any? A. The original capital stock of the Interborough Rapid Transit Company, to wit, $35,000,000, was, to the extent of $33,198 surrendered in exchange for four and half per cent. collateral bonds of the Interborough Metropolitan Company.

Q. That is what they call the gold bonds, is it not, Interborough Metropolitan gold bonds? A. Interborough Metropolitan four and a half per cent collateral bonds, that is the technical description of them. The bonds so issued were issued at the rate of 200 in bonds for 100 of bonds of the original Interborough Rapid Transit stock.

Q. And $99 of common stock? A. $99 in common stock of the Interborough Metropolitan Company.

Q. Now, what relation is the Interborough Metropolitan to the Interborough Consolidated? A. The Interborough Consolidated is the successor of the Interborough Metropolitan.

Q. And was not there a holding company that consolidated with the Interborough Metropolitan, some holding company? A. The Interborough Metropolitan in 1915, together with the Finance Company, were consolidated and they formed the Interborough Consolidated Corporation.

Mr. Quackenbush.-And that was called technically, Mr. Mayor, the Finance and Holding Company. That is where you got the idea of the Holding Company.

The Witness. Finance and Holding Company.

Q. What is the capital stock of the Interborough Consolidated, or what are their securities? A. The capital stock of the Interborough Consolidated Corporation is the successor's stock to the Interborough Metropolitan, and the stock of that company was

issued substantially as follows: $99 of common stock to the holders of the old Interborough Rapid Transit stock to the amount of the stock exchanged, to wit, $33,198,000. The preferred stock of Interborough Metropolitan Company was issued to the holders of the Metropolitan Street Railway Company stock and to the holders of the Metropolitan Securities Company stock. And those sources would practically account for the outstanding stock and bonds of the Interborough Consolidated, successors to the Interborough Metropolitan.

Q. What is the New York Railways Company? A. The New York Railways Company is the successor company of the old Metropolitan Street Railway Company, having been organized in 1912, when the Metropolitan lines were in the hands of a Receiver, organized for the purpose of taking over the lines of the Metropolitan Street Railway Company.

Q. Is the New York Railways Company now, or has it some time in the past been connected with the Interborough Rapid Transit Company? It was connected with the Interborough Rapid Transit, was it not? A. Not with the Interborough Rapid Transit.

Q. With the Interborough Metropolitan? A. Interborough Metropolitan. Connected in this way: The old shareholders of the Metropolitan Street Railway Company exchanged their stock, many of them, for securities of the Interborough Metropolitan Company. When the reorganization of 1912 was effected, the Interborough Metropolitan Company became the holder of the new stock issued by the New York Railways Company, which retired the old stock of the Metropolitan Street Railway Company. So that the connection between the Interborough Consolidated and the New York Railways is found in the fact that the Interborough Consolidated Corporation is now the owner of substantially all of the capital stock of the New York Railways Company.

Q. Where does the Interborough Consolidated get its revenue, if it gets any revenue? A. Its revenue was derived — in the revenue days

Mr. Burr.-You are not speaking of internal revenue?