The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-15
SHONTS APPEALS
FOR HIGHER FARES
Surface Lines in Danger Of
Early Bankruptcy, He Tells
Civic Bodies.
ONLY FOR WAR PERIOD
Head Of Company Paints
Gloomy Picture and Asks Pub
lie to Judge Fairly.

Theodore p. Shonts. president Of the
New York Railways Company. spoke for
the surface lines yesterday in a state
ment addressed to the Chamber OF Com
merce and taxpayers organizations In
tended to bring public sentiment into
line for increased fares, and said that
the company is now operating street
cars at less than cost. Its Indebtedness
is more than SIS 900. 900 and it's capital
ization Is less than the value of its
property.
Mr.. Shonts urges public support of the
petition presented to the Board of Esti-
mate and Apportionment to permit the
Public Service Commission of the First
district to regulate car fares during the
war time emergency period according to
actual needs rather than by the fran
chise rate. In making this request there
Is no intention of asking relief for
longer than the war. Mr.. Shonts says:
I'VE do not ask the Board Of Estimate
to abrogate any OF the city's rights or
powers nor to alter any franchise con-
ditions except for the temporary emer-
gency. The wisdom Of putting the
emergency problem in the hands of COM
missions has been thoroughly recog-
mixed, and municipal authorities of Buff
falo. Rochester, Syracuse, Schenectady,
Utica, Troy. watervliet and many other
smaller communities in this and other
States have taken this course.
No Interest on Mortgages.
The emergency confronting this COM
pany Is extreme. It threatens early
bankruptcy. 1t Is q matter Of the deep
est concern to every civic and business
body and to every business man and
resident in New York. We believe that
when the public knows tho facts its
judgments will be fair"
On January 1, 1918, the company had
a deficit Of s1.144,7s1. No interest has
been paid on its second mortgage since
June 80. 1916. and at the present time
the company Is not even earning inter-
est on its first mortgage. The basic
principle Of fair return under the Public
Service Commission law is not less than
10 per cent.
The stockholders Of this company
never had any dividends whatsoever.
There can Be no charges made Of over
capitalization. The reorganization Gin
1879 reduced the capital 341.sS3.S94.50
and the Public Service Commission ap-
proved the capitalization as then fixed.
Ho totdi vi 6tOSh, JULIUS anu NOT-
vertible ecrip. underlying bonds or other
mortgage indebtedness Is 376.044.22497.
Tho capitalization Of the company is
less than the value OF its property. To-
day at actual prices It would cost $751;
100000 to reproduce the property now
used.
Company Underca pitalised.
This excludes any value for any Of
tho franchises. although these alone are
taxed by the State on the value OF $13.-
100000. and also excludes any going
value. At normal average prices the
value OF the company's property invested
in the public service. exclusive Of fran
chises and good will value, Is at the
lowest estimate ss2.0oo.o0o.
AT the time of the reorganization the
Public Service Commission fixed the
valuation OF the company's property,
for the issuance of securities, at $685.
sol, 900. This does not include fran
chise or going value. either of which
would have brought this value up to
more than 500 900, 900. More than So
1890 has since been expended in addi-
lions and betterments. In other words In
stead Of being watered. the company is
undcrcapitalized.
THE company has to pay the security
nOlQeTB OF l6dSeu lines lOT dupul
10 per cent Of the par value OF $22.-
oo0,717, Of such securities now out
rtanding. But they have no effect on
the fare. They must come out of the
fair return allowed US by the law, and
which Is strictly limited II they are
too high, It Is our own loss.
Rides Less Than Cost.
THE situation is. therefore, extremely
simple Owing to war time increases in
our expenses for labor, taxes, materials
and supplies. expenses have increased
so rapidly as to more than eat up in
creases in receipts. We are furnishing
street car rides at less than cost"
Mr. Shonts explains tie overcrowding
Of cars by the company's shortage in
motormen and conductors. 1000 under
the normal complement. Some cars are
unused at the barns because there Is no
one to run them. Regarding the trans
fer system. he says:
The New York Railways Company
gives transfers from II e cars Of any one
line to the cars OF any other line In the
system II by receivership the public
lost the transfer privilege. 1t would cost
car riders far more than an increase in
fare. The sad experience of the loss of
transfers during the Metropolitan com
pany's recelversi Up must still be fresh
in the public mind"
Higher Fares His solution.
The company operates 42.7S miles OF
track that Is owned and es.42 miles OF
leased track. Under agreement It oper-
ates 1873 miles more. Concluding, Mr.
Shonts says:
This Is not a question OF dividends or
money making. 1t is purely a question
OF being tided over an abnormal wartime
emergency. The increased expense OF
operation due to the war could not have
been avoided. WI ether these lines be
operated by the Federal Government or
under municipal ownership or by the
present owners. these expenses will have
to be met Nothing will meet them ex-
cept more income. That means higher
fares"
PRISONER FEELS KEEPER.
Polish Young Man Now in Hos
pital, Badly Injured.