New-York tribune., 1919-08-25
Likely To Be Attempted
Before Jan. l, in Opin-
ion of Legislators and
Wall Street Financiers
Plan Proposed by Nixon
Commissioner Discusses His
Ideas Of Project: Billion
Dollars Probably Involved


local transportation matters, including
former Public Service Com. .issioners.
the idea of Public Service Commission
cr Lewis for a merger OF all of the
local transportation companies into
one giant corporation is much nearer
realization than was though. possible
before the settlement Of Tho strike of
the Interborough Brotherhood.
The probability Of such . merger is
predicated upon certain admitted facts,
as follows:
l. Vice President and General Man
ager Hedley of the marlborough
stated before the Board OF Estimate
on Saturday, August 16, that. in his
judgment, the Interborough at the
present time is, to use his own words,
financially busted"
2. Both Vice President Hedley and
James l.. Quackenbush, general coun-
sci Of the Interborough, said that a
receivership is due in the natural
order of things not later than Jan
uary ], 1920.
3. The Brooklyn Rapid Transit
Company and allied corporations al
ready arc in the hands Of receivers.
Of the proposed merger Commits
sloner Nixon says:
From the viewpoint of the city, of
the public and the investor the sou-
ton of the present emergency must be
along the following lines, which in the
m'in repeat the views l have hereto
fore stated:
81 Eacn Of the present transit sys-s
TENS to be si'npifed by the consolida-
ton or merger of the constituent COM
panies into one railroad corporation. Of
course it may be found desirable to
have separate corporations for surface
railroads and rapid transit railroads
respectively. Personally | trust to see
such steps taken as will insure one cor
poratlon only with which the city and
the commission can deal, but this is
detail
"2. All holding corporations, So
called (not railroad oorporations), to
be abolished.
"3. Leases of roads to be terminated.
"a Perpetual franchises to be changed
to franchises limited to fixed erede neriods
within city charter limitations or to
what are known as indeterminate
franchises.
.. Values of properties to be agreed
upon or arrived at by such means as
Will leave them unquestioned
AT an Agreed Valuation
"6. The city to have the option of
acquiring the properties within fixed
period at the agreed valuation plus the
cost OF additions, extensions and inn
provements. cit may be desirable to
provide for amortization of purchase
price out of earnings.)
~. A flexible fare to be estab-
ilshed, whereby fares shall be auto
matlcally adjusted to meet the cost of
service, together with reasonable re-
turn both to the city and the in
vestors upon the agreed fixed yalua-
tlons and upon the cost OF additions.
extensions and improvements.
q. The city to have representa-
tive on the boards of all companies.
III the transportation companies are
disposed to take up this matter along
such lines, | am prepared to use al
my official power to bring about
satisfactory, and it is to be hoped a
permanent, settlement of the whole
situation. Ii the corporations con-
slder their situation as bad as rep
resented it should be possible to work
out an agreement along the above
lines without too serious DELAY"
Total Around $1,000, 100000
The total capitalization in stocks
and permanent debt of the local trans
portatlon companies, including various
small steam railroads wholly within
,he city, stage coach line, and two
baggage and transfer companies, as of
the fiscal year ended June 80, 1917.
is $1,121 1856, ,oo1.44 This is the last
compilation printed by the Public Ser
vice Commi ssion 1t does not include
various later note and bond issues bv
the b. K. T. and the Interborough.
Deductlng the Pennsylvania Tunnel
g. Terminal RAILROAD Company and the
others not reasonably classitiable under
passenger transportation lines. and the
total remains, in round figures about
81 COO 900 600.
!; I'm any project to merge the local
Ines said former Public Service
commissioner yesterday, Eve shall
need to start with the sum of $1,000
oooooo, representing capitalization in
stocks and permanent debt. 1t does
not follow that the city, if it desired
to take over all of the local lines,
would have to extend its credit in that
sum, as many of the railroads are
worth far less than their capitalized
value.
Courts Will Set Price
There is to be considered. however
that the courts of last resort invariably
have held that when the state or
municlpallty, by virtue Of power con-
lerred by the Legislature or by exist
ing law, confiscates or take over
private property, it must do so by due
process, and due process means.
nrlefly, that the courts, or agents of
the courts must ultimately decide on
the question of value. So, while the
sum as tabulated. may look suspicious
ana not in conformity with actual value
!, must be remembered that it win re-
solve Itself. into a matter of orderly
ana legal procedure, which usualIv
means that the city or the municipality
ann1 approprlates the property of an
"'aer must pay good price for il.
IN the matter Of the condemnation
o. 'he various parcels, including A raij-
Toao ped Tor several miles. for the
Ca'sN!li aqueduct back Of Kingston.
the city had to pay high price sor
nearly everything taken. vastly over
running the original estimates
therefore, when Commissioner Nixon
begins project of merging the local
transportation lines, with the idea Of
retundlng their capitalization and per
manent debts, he will have to keen the
sum of $l,00o,000,0OO in sight as
starting point.
An increased fare for New Workers
IS inevitable. AS matter of fact the
1are for hundreds of thousands of pas-
sengers has, within the last two or
three years. gone down from IL to 10 /
and cents.
Take, for instance, the opening of
the Jerome Avenue line. Thas extern
son pulled away from the Putnam
division Of the New York Central fully
1000 pasSpnrerS -ros,o,.~,.s