New-York tribune., 1909-04-07
TRACTION FINANCES.

The report of the Public Service Commission
regarding the operation of the surface car INES
Of Manhattan for the fiscal year ended June ~
1908 shows how much in need of reorganization
what remains Of the Metropolitan traction sys-
TEN is By dropping ont the Third Avenue Rali-
road COMPANY the 39th street line, the Secohu
avenue line and the others that have been cut
off .be receivers succeeded in reducing the
rentals from s10.317.36 Is in the fiscal year
1907 10 S4633.979 "a last year. But this sum
inCiudes full rentals for the three months before
rhe receivers took hold. For the nine months
since the receivership the rentals amount 10
only S214S.000. On this basis for fun year
they would he now less than S3,oOo.Vp, assum-
ing that since July 1, 1905. the receivers nave
not made further cuts in the fixed charges OF
the system If they are S3,00o.o00, that means
saving in rentals Of more than St,oVo'o''
year as result of the receiverShip
but despite all this saving In rentals the re
cefvers of what is left OF the Metropolitan sys-
rom renort deficit Of S1.047. $50 So for the
period of nine months during which they were
oparatfng the road. This deficit is due 10 the
great Increase in operating expenses last year
over the year before. an increase Of more IMAM
s. $4,000 for the Metropolitan and Ihlrd ave
nue. lines together, comparison Of the two sepa-
rateIv with the results Of the previous year
being impossible How much Of this increase Is
permanent 1t is impossible to say. CertalniF
tbe lines cannot properly he run cheaply as
they were before the receivership, because as II
we'll known. they were permitted then to get
into a sarious state of disrepair. On the other
hand this disrepair is undoubtedly responsible
for mart Of the great increase in the cost or
maintenance shown in the report. Maintenance
Of wav increased in cost Sjo1.34So oS ana main
tpnance of equipment Sl.204,669 II. accounting
between them for all but 100000 Of the IN
creased cost Of operation Of the two systems TO
gether. Once the cars and lines are in good re-
nsir these maintenance charges ought 10 he re-
duced so as to bring the Metropolitan near 10
earning its present fixed charges
Another element that helps TO explain the
deScit for the nine months of the receivershlp
notwithstanding the great cut In fixed charges
Is a fall in passenger income of S6I5.3SS 70
this figure again for the two systems and for the
whole year Probably this decline In revenue
was due TO the panic, for the year includes lts
most severe season. Passenger uatnc fell on
sharplv in the fall and winter OF 1%DI-Os from
% 10000 fares in October, 1907, TO 2o,tooop
in Ianuarv 1908 a heavier decline than can he
expIained on any other basis than upon the
effect of the panic. The cutting of Of transfers
occurred too late in the year for the report to
throw much light on the number Of passengers
carried or the profits Of carrying them after the
reduction Of transfers The ending Of transfers
between the Metropolitan and the Third avenue
occurred early in April. The number OF cash
messengers during that and the two succeeding
months appears not to have been affected ma
terially by the change. Operation expenses are
not segregated hy the month, so il Is impossible
n tell whether reducing the number Of trans
ferred ma ssengers reduced the cost Of transpor-
tatiOn not.
Purchasers of the Metropolitan system may
reasonably look foEward to larger passenger
revenue than is disclosed in this report, cover
ing 2 season of panic and business contraction.
They may fairly expect 10 he able 10 reduce the
cost of operation, receverships not being notable
f,r economical management, and this receiver
shin being confronted by unnaturally heavy
maintenance costs But apparently in the re
organization the axe will have TO be laid again
10 those fixed charges which the receivers have
apparently reduced about S7.0o3,00 a year. II
the reorganized system Is to he made profitable.