New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-01-21
"viCious and DiSadvantageouS
to City," He Says Of Them
at Hearing Before
the P. S. c.
"SWAG FOR SAME BUNCH"
Declares Deficit on Interest New
York Must Pay in 1927 Will
BE S43,398, 000-Will-
cox and McAneny
Defend Plans.

lnt DOdIu Oh AIuclHltN, dpptdltu pt-
fore the Public Service Commission
yesterday at the hearing on the pro-
posed contract of the city with the In
terborough and Brooklyn apid Transit
Company for the future construction
and operation of subways on the dual
plan. and strongly argued against the
contract. as formulated. He attacked
the contracts with the Interborough
and Brooklyn companies as vicious
argued for their reformation in both
form and substance. He submitted a
fourteen-page brief to the commission.
Mr.. Mitchell declared it was one Of
the last times he would have the oppor-
tunity 10 speak upon the subject in
public, and he wanted TO go on record
as standing right where he had from
the first in opposing the acceptance Of
the offer of the marlborough and the
plan reported and adopted a the joint
conference in May. 1912. Furthermore.
though he realized he would be beaten
by a majority vote in the Board OF
Estimate and in the Public Service
Commission, he intended 10 maintain
his attitude toward the grab until
the final vote was taken. he declared.
Referring 10 the contracts with the
railroad companies. he resorted 10 pop
ular slang-with apologies to the COM
missioners-toward the end of his argu
ment, and said:
1T doesn't much matter how they
get away with the swag, il is the same
bunch which is going TO pocket it."
Crowd AppIauds Mitchell.
great crowd damned the Public
Service hearing room, and Mr.. Mitchel's
remarks were frequently punctuated
with applause. Those who spoke
against the adoption of the contracts
exceeded in number those who were w
crowd became demonstrative at times.
md Chairman Wilcox of the commits
sion had difficulty in maintaining or
der Several policemen were on hand
bat heir services were not needed.
President Mitchell pointed out, among
Lis general objections TO the INTERIOR
uueh contract. that the provision for
the leyeling of existing leases TO 4
nat forty-nine year term by extending
the present unduly unfavOrable Oper-
ating terms for the company for long
periods Of years results in a gift to the
company Of approximately $4,000
90"
Besides this benefit accruing 10 the
company he cOntended that under other
provisions in the dual contract the
company came in for benefits Of al
most $1oO,OOOpOJ more. He declared
the city never would be able To meet
the interest charges as provided in the
contract with the Interborough, and
that the accumulated deficit on the
city's interest would amount to S43,-
sos, 900 in 1921 This deficit the city
would have to write into its tax budget
at the time, as ii would not be able TO
float bonds for it. he declared.
Says City Must Pay.
In making up the sum Of the enor-
NOUS benefits" which would go TO the
marlborough company, Mr.. Mitchell
first considered under the head Of re
caption provisions of the contract have
been devitalized." the matter Of the
city paying twice for the equipment.
IN that regard he said:
The plan contains no provision for the
termination of the contracts for the
present subway. except in 1917 or some
date thereafter. and il states that then
the amount paid by the city shall be the
present worth OF the annual guarantee OF
$685.. goo for the remaining period OF
the contract. or until January !, 1866
provided the entire system is acquired
The city must pay. in addition, the value
Of all equipment
These provisions require a much larger
payment than would De made in condem-
nation proceedings. for upon condemna
ton If the city pays the capitalized value
Of the gross profits II receives the whole
;robertv without further payment. The
proposed plan provides not merely fOr
the Capitalization Of gross profits. but
for an additional payment for part OF
the propcrty--the equipment In Other
words the citv must pay for the equip
meut twice, once through the capitaliZa-
ton of the earnings thercfrOm and once
for the property itself The amount in
voIyod is enormous. According 10 the 10 ,
reuort Of the Interborough Company. the
COS; Of the equipment was approximately
SEA. 600. 600
As another benefit" to the Inter
borough Mr. Mitchell declared that the
excessive sinking fund Of per cent
allowed upon the company's new cap
ital will produce a surplus in the sink
ing fund Of from S39.OO0OOo To $50
oCo.OJO. which the company is permit
ted 10 appropriate 10 its own exclusive
use"
Further, in this same category OF
benefits" Mr.. Mitchell declared that the
contract relieved the lnterbOrough from
providing for past depreciation upon
any Of the subway property except roll
ny stock. and the amount Of accrued
depreciation from which the company
Was relieved. upon power equipment.
buildings. etc. and which the city must
2pgImc under the new contract. 70 Jan.
aarY 3 1911. would practically be 81.
DJg.fJD H. Iltche added that mot
.iHefabdlHR ali previous reports. opin-
fy... ..L .,4,I.ft,,a fI,tt,J IL. IL.