Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-09-07
B CONDEMNED AT COUNCILMANIC HEARING

| neede0 more
sewers ana more pavements."
| Yet Mr.. Hervey was ready to admit that
the system which has been worked out In
New YORK under which the deficits In opera.
ton OF the rapid transit lines are to be paid
ior out OF the tax levy without any in.
crease in fares was about the best plar
mat could be expected under all the cir.
cumstances.
When 1 asked him about the contracts
win the operating companies he referred
me 10 Leroy It. Harkness, the chief OF
rapid transit of the commission. In the
course OF long conversation Mr.. Hark-
ness reviewed the history of the. dealings
Oh the city with the operating companies.
NEW YoRK'S SUBWAY EXPERIENCES
The first subway was built under a con-
tract which provided that the operating
company should pay the interest on the
uohus ana l per cent for a sinking fund,
,he contract TO run for fifty years. To Sc
cure cure itself against default in the interest
,he city TOOK what amounted to a mortgage
ON the operating plant. Under this ar
rangement the operating company was very
soon earning from 15 to 20 per cent on
the total investment, and when an extern
SION TO Brooklyn, to cost about SIC, ,0O0, 900,
was proposed this company offered to build
II IL the city would put UP s2,0OO,00O Of
.he cost. These lines took the cream Of
q,
NO otner contracts so favorable to the city
could be made
The latest contract is that with the
Brooklyn Rapid Transit Company. IL in
volves the expenditure of about $3.50, ,0oO.-
VVV. VI this sum the city will provide
sIoo,oOo.OOO and the Brooklyn Rapid Tran
SIT Company will furnish the remainder,
out or the earnings the company Is to take
nrst S3,50O,O00., a sum equal to the present
is t,la
per cent interest or the new money It
puts into the enterprise. After these pay
ments have been made. the city ts to get
per cent on what IL puts in IL there is
anything left If there is a deficit, 1t is to
be met by taxation.
Mr. Harkness is of the opinion that the
deficit will not continue for more than ten
or twelve years and after that time the
earnings will increase SO that the accumu-
lated deficit will be wiped out. There is no
thought at the present time of making the
riders pay the deficit.
But every new line that is being built.
according to Mr.. Hardness, is considered
as business proposition that must stand
on it's own merits 1t must show evidence
that 1t will pay within a reasonable time
without regard to the increase in the value
of property which follows its building
"A city would go bankrupt" said he "if
1t depended on increases in assessed valua-
tion to pay for its rapid transit lines"
FIVE-CENT FARE IMPERATIVE
1t is proper. however, for the city to
bank on an increase I'm population and on
an increase I'm the demand for transpor-
tation An expert. he said, had figured
that the population of New York doubles
every thirty years, and the travelling popu-
lation doubles every twelve years. 1t is
on this increase in the number of users
OF the new transit lines that the city Is
depending to produce the money needed to
pay the interest on the transit bonds.
When I went over to Brooklyn to fnd
out what they think of the matter there
l found Lewis w. Pound. president of the
borough most emphatic in his insistence
on a uniform five-cent fare, no matter how
large the deficit in operating expenses
might be.
What is troubling us here. said he
'is just how to raise the deficit in the
first few years. 1t is my personal opin-
ion that it would be better to issue short
term bonds to pay part of the deficit each
year than to pay It wholly from the tax
rate. Then as the deficit grew less the
bonds could be paid off. In other words.
I would like to spread the payment Of the
deficit over a longer period of years than
is likely to be occupied by its accumula-
ton We expect to break even in ten or
twelve years at the outside. but we may do
better. At the best we shall have hard
work in raising the money for the first
two or three years.
But we object to any increase in tho
rate of fare. We must carry the people
for five cents and find a way out in some
other manner. l don't believe in assessing
the property benefited. as real estate has
TO carry too much of burden already.
1t was proposed over here. but it will not
be done"