New-York tribune., 1909-11-19
CITY FRANCHISES
RAPID TRANSIT ACT
DR.. MaItbic Explains Features
of NeSc Lax.

Cincinnati. Nov. is-In a paper read here
to-day before the National hunlo,paA
League Convention, Dr. Milo " MaitDie'
of the public Service Commission for the
let District Of New York. explained 'he
changes made by the new rapid transit
act as amended by the New York Legs
laturs OF 1905 and 1909.
6,omrnIss,onsr Msltbic discussed four of
the most important Observation-Disclosures
the indeterrninate franchise. the provision
for p-ofit sharing, the permission 20 use
private capital In building new rapid tran
sit lines and the provision for defrayinS
the cost of new lines by special assessment
In explaining tire indeterminsts fran
chiye Commissioners Maltbie said;
rbe pisn finally perfected was based
upon the indeterfninate idea. In All future
pIsp tie civ will have the right 20 ter
inmate the grant or contract az any tinns
after ten years and 20 take Over VIZ lai .o
tss company ma, ,rn nsST prpT,o' ppo1 reying r an
amount 70 be provided fcr, N the cohlIscst'
which shan not exceed the investment made
so,eb o. the onnf sopaaE aEs PS SSscress RON year 70
wear as the grant continues. untii niaIly
all the property in the street snaI u I,t Ir,UI,
10 the city free and clear without pay Euiel'
upon some date fixed I'm the grant
DATE OF REvERsIoN.
The date at which such reversion shali
take place is 10 be fxed at the earliest
time within which the Investment mace
by .he company In the road can ne amor amor
tised out Of earnings IN no CasS 1,,,,,,, - For FOR
the franchise OF for the termination OF the
lease or the contract. -,
II any rapid transit line Is thus tdhen
over the CRY may operate the line HeeH.
or lease IL 20 another eompa ny or ushsis. -,
It directly from the Old company to the
new company In other words. the hanas
of the eity shall be united and left Tree 20
minister TO the needs Of the cofnmuni'y a.
conditions from time TO time demand
The important points to be noted are tpe
short minimum period mot more than ten
vearsl. the limitation cf the amount 10 ne
Paid at any time (plHs 10 per cent? tns
decreasing amount as time runs on, the
fact that equipment viii be paid for se-
cor'ihg 20 its then value and the fact that
the more profitable roads will revert 20 t9e
city IN : shorter time thAn the less preft-
able ones --. .-..-..-.
ecuiprrsrt from roadway is that the FORMER
would dOibtie~S nc allowed 10 5eteriorsts
as the date, approaches at which the CITY
is TO recSIvc u free. Rrt i ths eayment
il Is likely that the equipment will be main
tafned IN Scud condition. In The case of
street surfars railroads this Argument
would apply with much force 10 roadway
as vcll.
Referring 10 profit sharing. Commissioner
Maltb!e said:
Attempting 10 meet these various condi-
lions and difficulties the commission
worked cut profit shArlns pl4n. u pro
vides that there will be Deducted from In
ments 10 reserve ard amortization finds
and return upon the investment not 20
exceed in any case per cent, The re-
the company and the city.
How THE CITY SHARES.
T. other words, Il The compang were to
waving ali charges except interest and divI-
cent ss the poiut at which a sharing Of
profits should begin. the city would get ?
? per cent me latter as an extra dividend
10 IT'S stockholders. II only per cent were
The company per cent. Or s per cent in an.
As 20 the use or proAts. the Commis-
sioner points out that the city's share shall
not 90 into the city treasury, but shall
hrst be applied 70 psy interest and sinking
fund charges upon municipal binds ISSUED
for rapid transit purposes. and the remain
der shall 30 into the rapid transit fund"
10 be used only for the CONSTRUCTION,
equipment or operation OF rapid transit
lines.
The Commissioner points out that in the
original rapid transit act of 1891 raril
transit construction by private a ultsI only
was contemplated. hut that subsequently
construction by the municipality was sub
stitUted after the referendum Of 1884 when
the voters of the old City OF New York
(now Manhattan and The Brors} decided
in favor OF the municipal ownership prin-
cipie Tho commission recommended 70
the legislature end the Legislature incor-
porated in the law an amendment RESTORING,
the right to use private capital In rapid
transit construction Subject 20 proper
safeguard and to The indsterminats p-ih
cipls before mentioned the Commission ts
now empowered To grant franchise 70 a
private company.
SPECIAL ASSESSMENTS
Ths new lsu aIeo permits the commission
70 provide for the construction OF rspid
transit lines ey special assessment upon
the property benefited. ON this point
CcmnIisstonar Maltbis Gays:
The most novel feature of the whole
=