Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-03-31
LEASE A BARGAIN.
TAYLOR ASSERTS
Former Transit Directors
' Opinion Unchanged by
Twining's Attack
WILL ANSWER 1T LATER

E-Transit Director A. Merritt Taylor to-
day issued formal statement assuring the
pubic that the Philadelphia Rapid Transit
'ompanys proposed lease of the cty's
hieh-speed system. in its present form. Is
an excellent bargain from the standpoint of
the city, in spite of the attacks Director
Iwlnlng made in his report to the Mayor
and Councils Thursday.
Mr.. Taylor. who is father of the present
program Of high-speed transit development.
withheld all discussion of the Director S
report until he has had time TO give it
lurther study. He indorsed the views of
Ford, Bacon & Davis however. with the
one reservation that their figures are ultra =
conservative in many particulars"
The statement from the former Director
follows:
I'm response to requests made by the
newspapers and others for an expression
of my views with relation to the reports
or Director Twining and Messrs Ford.
Bacon & Davis upon the proposed contract
for the equipment and operation OF the
city-owned hgh-speed lines by the Phila-
delphia Rapid Transit Company, 1t is i'm
possible for me to comply at the moment
because the reports in question, without in
Guiding the diagrams, constitute a book of
$50 pages
The public may rest assured that | am
studying and analyzing these reports with
great care, and that | shall express my
Views with relation thereto as soon as praC- :
ticabie
The statements and conclusions ex-
pressed by Messrs Ford Bacon & Davis
are greatly at variance with those expressed
by Director Twining.
The Ford, Bacon G. Davis report
although utra-conservative in many par
tculars, Will, upon inspection commend it.
self as constr :tive in terms, and as a very
able analysiA and presentation of the facts
when ] mt out certain ultra-conserv-
ative featur~s of the Ford, Bacon G. Davis
report the necessity of eliminating these
features, and what the effect of their elm
nation will be, the people of Philadelphia
VIII see that the bargain which ! have in
| uuced the Philadelphia Rapid Transit Com
pany TO tender for the equipment and opera
ton of the high speed lines is an excellen,
bargain from the citys standpoint
Director of Transit Twining's plan I,
| wipe out the stock of the Union Traction
! Company as the first step to remove what
ne calls obstacles now in the way of fail
| agreement between the city of Philadelphia
| ana the Philadelphia Rapid Transit Com
| pany, today was called illegal by John II
! Chestnut and Joseph Gilfillan. Both mer
! are directors in the Union Traction Com
pany Gilillan is counsel for the Balfoul
| estate, which holds perhaps the largest in
| divdual block of Union Traction stock
| Director Twining yesterday said he be
| lieved the orercapitalizaton of the sub
| Sidiary companies of the Philadelphia Rapit
! Transit Company-and the Union Tractio,
| company zone of these-was perhaps th
greatest impedlment to "a fair' agreemen
between the city and the p. r. T.
| The present relationship or the transi
company and its subsidiaries is such, hi
| report points out, that they are receivin
| 2S per cent of the gross revenue of tn
| system or 81 per cent of the net earning
| of the system, and any guarantee to tn
| Philadelphia Rapid Transit Company
stockholders will be basically unfair to tn
| city's stockholders"
To guarantee the transit company
| fixed return upon its investment, the Di
| rector holds, would in effect place the com
pany's securities on par. as far as sta
| bility was concerned, with the bonds o
III city, and, therefore with all risk eimi
| mated, as the lease would have IL. he argue
| that the rate of interest should be reduce
| from to 4 per cent on Union Tractio
stock. the per cent, representing the DIFF
| ference, to be made available to the cit
| as an amortization fund to elimnat
| eventually Union Traction capital stock.
This proposal of the Directors, however
should only be put into effect, accordn
to his plan, if the provisions of the presen
lease guaranteeing the company flxe
| preferential should be ratified. And as tn
! Director is definitely on record agans
having the city guarantee fixe. preleren
tial, the proposal to eliminate the Unio
Traction capital stock is more than any
thing club in the lease negotiations
In discussing Director Twnlng's plan
| Mr.. Chestnut said today, II believe tina
| such a procedure would be in direct viola
tion of the Bill of Rights and dciberat
| overthrow of the law"
Mr. Gilfilan said. 1T is legally impos
sible in my opinion. IT, however, such
| proposal ever comes before our board
| we will give it careful consideration"