New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-01-04
Fears ''Panic
OF Vust Magnitude''
If Aid Is Not Ciueu

A panic Of vast magnltcde' might
indirectly be the result of failure on
the part of the city authorizes to per-
nit the Traction companies to charge
an increased fare, is the opinion ex-
pressed in letter sent out last night
to the various civic organizations of
the greater city by Theodore P. Shonts,
president of the Interborough and the
New York Railways Company
In seeking the aid of these organi2a-
tons in his campaign to obtain an in
creased fare on his lines, Mr.. Shonts
pointed out that d billion and quarter
dollars Of securities, represented by
the electric railways Of the state of
New YorE, are in jeopardy because the
local authorities Of communities in
the state have not authorized the cleo
trio roads to increase their fares suf-
ficiently to remedy the situation result
ing from the war.
Mr.. Shonts says it is his belief that
unless some relief is given at an early
date, many of the lines will become
bankrupt. Many of the weaker lines
the lines are headed toward bank
ruptcy.
Might Start Panic
at can readily be seen now" Mr..
Shonts asserted in his letter, an the
present extremely nervous condition of
credit IN America a disaster like de-
fault on d billion dollars Of electric
railway bonds in the State of New
York might start d panic of vast magn-
tude, affecting every state in the
union, because it would unqucstion-
ably be the decision of the banks and
investors throughout the country that,
if the largest and strongest electric
roads in the world can be forced into
Bankruptcy by reason Of the failure of
public authorities to protect them
against conditions they were in no wise
responsible for, securities of that class
must be thrown out of bank loans. with
a consequent heavy restriction of
credit"
Regarding the request for an 8
cent fare in lieu of or 7 cents Mr..
Shonts said that q 7 cent fare would
cover the .preferentia!s which arc due
the lnterborough under its present
contract with the city, with nothing
I Ieft over, however, for return upon
the city's S100,00O,0O0 investment. The
cent fare, according to Mr. Shonts.
would meet the interest required on
this investment and by making it self
supporting, would immediately release
It from the debt limit
Would Increase Taxation
Mr. Shonts contended that inasmuch as
the basis Of taxation in every state is
the wealth of its citizens, the elimina-
ton of billion and quarter dollars
OF securities from the taxable wealth
of this state would reduce to that ev
tent the Foundation of taxation. IN
the face of large increase in this
city's annual budget, he declared, the
policy of retaining a Scent fare on
the dual system would inevitably in
crease the city's taxation.
The war, to Mr.. Shonts's mind has
been chiefly to blame for existing
transit difficulties in this city Stress
was laid on this point throughout his
letter, IN conclusion of which he as
serted:
"No man. in 1918, when the dual
contracts were executed could have
war the estimated results from the
operation of the subways for both
me city ard the company-would have
been met, and no increase Of fare
would have been necessary"
District Attorney Swami, questioned
about his conference of Thursday with
Mayor HyIan relative to the traction
SITUATION, SAID last night that the dis
position Of his Office was to be en-
tirely fair to the traction companies.
i don't think that an increased
fare is justified" Mr. Swami said, but
am not going to do anything to en-
barrass them (thc traction companies)
IN such way as to make justified
their claim that they may have to 90
into the hands of receiver. | am go
ing to give the information we have
collected 10 the Board of Estimate and
the Mayor. have let the Mayor
knew that we stand ready to give him
all the information we have collected"