New-York tribune., 1911-01-12
REORGANIZATION HEARING
metropolitan BondhoIders' Com
mittee Appear Betore'P. S. c.
ARGUE FOR THEIR PLAN
Applicants Hold That They May
Properly Capitalize Super
seded Systems.

Az the first hearing before the PUBIC
service Commission yesterday on the re-
organization plan OF the Metropoli'Sn
street Railway Company proposed by the
1oint committee OF bondholders, II Was
brought ont that the applicants hold that
they may properly capitalize all moneys
expended on the changes from superseoe"
systems 10 the modern system OF undeI-
ground conduits
In thesplan the total reproduction N"'"e
OF the Metropolitan Railway system was
given as S2D.l54.So5 This total was ana
lived Yesterday by Charles Uebelacker'
chief engineer Of the system FOR the last
two wears, who testified that the value
Of the actual physical property. as eNlshhg
now. had been calculated at Sol 1851 TO
this. he said. had been added S-2""' IN
bonds and 5000 shares OF stock OF the Cen
tral Park North & East River Ralroao
Company. which were considered as assets
of the Metropolitan, being subject TO
pending litigation. With cash or hand
this would bring the total TO Slo6,I'S|6ol' ana
the grand total was reached by addhg
10 this $l3.S55.645 described as the net IN
vestrnent in superseded property.
The term Mr. Uebeiacker explained. ap-
Piled, for instance, 10 the tracks that were
used for The old cable lines. the cables.
the cable machinery and the appliances
used for operating such lines Such items
he said. represented no property now ac1u-
ally existing, but nevertheless these eX-
penses had 70 be incurred in the develop
ment of the system. and the applicants
hold that they may he properly capitalized.
Charles F. Mathewson, counsel for the
committee OF per cent bundholders'
carefully pointed out that this valuation
! did not include the value of the system
as a going concern, although such value
i-has been recognized by courts. He said
THAT various other items had been omit
ted. such as claims against other street
srailway companies, diverse parcels of land
for street railway purposes, profits OF pro-
motion, discounts on securities and the
value OF existing franchises. These items
might be estimated variously, he said.
but they would certainly sum up into mill
3ons
The hearing was held before Chairman
Wilcox and Commissioner Maltbie. 10
whom the matter had been referred by the
commission. Oliver c. Semple, counsel for
,the commission. who on the occasion OF
other reorganization hearings sat with the
commissioners and advised them in a voice
not audible to others. had his place this
time at a separate table. This. it was said.
was due 20 protests made by counsel for
bondholders against the former practice.
Mr.. Mathewson made the opening state
Inent, saying that il would he most unde-
slrahle TO have the Metropolitan system dis
;nteErated. He said the plan Of reorganiza-
ton had been framed with the utmost care
and was more drastic than any other such
plan he knew. He then read a summary
of the plan showing that II contemplated a
reduction Of capitalization from $l360ooooO
10 Sa6,0o.oO0 and a proportionally large re-
duction in fixed charges.
The fixed charges on superseded securities
al present amounted TO $l,4l5,9io he said,
whereas these charges in the new company
will be only S470724. The entire 3 per cent
on the income bonds would require only
100000 year, and If . per cent were 10
be paid on the stock TO be issued under the
plan the total annual requirement OF those
fixed charges. outside Of undistUrbed securl-
ties. would he little more than &0DCoO. ne
said The gross earnings were about $lS,-
10000 for the last available year
According 10 the printed schedule Of the
reorganization plan the undlsturbed securl-
ties amount to almost $2)p10o0 in per cent
bonds, meaning fixed annual charge Of
about 81 10000 and about so, 10000 in stocks.
with an annual charge, at the same rate, Of
5000 This would mean total of fixed
charges Of practically 100000, against a
gross revenue Of 100000.