The sun., 1919-01-25
SCHIFF OPTIMISTIC
ON B. R. T.SITUATION
Relieves Stockholders, How
ever, Must Put Hands Into
Their Pockets.
TALKS AT BANKERS CLUB
Receiver Garrison Also Ger
tain Company's Problems
VIII Be Solved.

Jacob II. SchifY discussed the AFFAIRS Of
n. Brooklyn Rapid Transit Company
from thu point Of view of one interested
IN IL, notes at q luncheon OF the Bond
club in the Bankers Club yesterday. He
predicted that tho stockholders would
have to put their hands in their
nockets" as part Of the reconstruction
nrocess Lindiey NJ. Garrison. the re-
ee,yer for the Brooklyn Rapid Transit
Company and its subsidiaries, and Travis
H whitney. acting chairman Of the
public Service Commission. were other
speakers
Kuhn. Loeb a Co. Mr.. schirs Arm.
helped to place 100000 in short term
notes with which the Brooklyn Rapid
transit Company began to do It's part In
the dual subway contract Mr.. Schiff ex-
dressed confidence In the future OF these
notes and the company's bonds, but was
less certain about the stock. He said:
81 know nothing about the Brooklyn
papid Transit Company except SO far as
We have learned about II in connection
with the subway. We thought there was
no better security than these Brooklyn
RapId Transit notes. and we were greatly
disappointed to find out that tho COM
pany was gradually drifting into bank
rup,cy. Its earnings until year age
we're brilliant. Under changed conditions
its net earnings were practically wiped
out. The company needed more capital
than had been provided for; in short. II
needed a receivership.
cr.ts0sA Over Carvison
we were greatly. gratihed. when We
we're consulted, by tho selection OF for
mar Secretary Garrison as receiver.
do not criticise the old administration
M Williams had tremendous difficulties
To overcome.
The Job of Mr.. Garrison is compare.
lively an easy one. He needs something
like $4,000. 900 to get the property In
good shape. When you consider the
amount OF money that has gone into the
property there cannot be any difficulty
In raising this sum.
Nor is there any danger to tho sc
curity holders. / mean the creditors
DO not mean the stockholders. Whil'
think the stockholders eventually will
Ee; a good property back. propert,
that with fair treatment by the puoI'
car earn sufficient to pay an equitable
return on its stock the stockholder
might understand that II is necessary t
put their hands In their pockets even
tually TO clear the property from an.
temporary debt that may have TO be ere
.a.ed 20 complete It.
IF my Judgment Is worth anything
there is very little danger in regard to II
securities. mean Its bonds. and that NJ
one will lose any money In II II Mr.. Gar
f.son, as we all hope, Is kept in charg
Of it
situation Explained.
Mr.. Garrison explained the presen
situation Of the company as due to II
failure to readjust its financial pract!c
IN time to meet the demands Of the dua
subway contract. He said that tn
Brooklyn Rapid Transit Company 70
wears had followed practice of usin
IS income from operating revenue Il
financing permanent Improvements 70
IS subsidiaries. accepting therefor tn
lcr..ficates OF Indebtedness of the suosid
aries. The parent company acquire
!S-.0Oo,000 OF these certificates whic
were not offset by issues of Its ow
bonds. Then came the demands for cap
ital expenditures on account OF the mu
n!cipal subway contract In the face Of
s,agnart market for securities and tn
petition for a receiver.
Mr.. Garrison said he had no policy {
announce. "One may as easily kill
patient from good designs badly carrie
out as from evil designs, and many goo
properties are ruined by people with tn
best intentions who put into effect over
nigh: a plan which is not we'll though
out" ne said.
The receiver declared that he wa
,Hnt hA nF hn
p4ny could be solved. He pointed ou
that It serves an area that increase
IN population from day to day. thu
resulting In an increase OF revenues
He said that there was no question @
tie property's intrinsic value and tina
g there is cooperative effort on tn
part Of the public. the Public Servic
Commission. the city authorities and tn
receiver a bright future is assured.y
Commissioner Whitney said that tn
city will have to increase taxes to TAX
care Of the fixed charges on bond
.ssued TO build subways under the dus
contracts. He said that s6,000.o00 mus
be raised In this way this year an
that the obligation will increase I
ie000.000 year. Only an adequat
revenue induced by proper and popula
operation will take the fixed charge
OUT ~ taxes, he asserted.
Tho Commissioner said that IN
POPULARITY OF a transit system Is esser
tia. to It's successful operation. II
declared that the support of the publ
is the most valuable asset utillt
company can have. In connection wit
TIE proposals for fare Increases he said
u have noticed throughout the cour
Try that where increases in fares hay
been allowed these increases have bee
& benefit to the company in dire'
proportion to the extent TO which ths
Corporation stood well In the con
nanity A man will pay more fc
everything he buys, but he will b
da-ncd II he will pay one cent more
street railroad company II no doesn
Ike IL. II the fare Is increased yo
vii have Just enough people who wi
NalN 20 prevent an increase In II
revenue unless there Is proper relation
SIP between the company and Its con
nIuny,"
Picks Successor to Williams.
Nr. Garrison said yesterday that h
had picked n successor for Timothy
.Fa.E Il,,,. In,