New-York tribune., 1919-07-21
\. Y. Railways Receiver
Says Lines Are Not Earn
ing Expenses Without
Considering Rental 8
More Revenue Now Vital
ReceivcrsI,ip Unnecessary
but for Consideration of
Lease Expenses, Is Reply

Job f. Hedges, receiver for the New
York Railways Company, yesterday
took William ?. Burr, Corporation
Counsel, severely to task for opposing
increased fares on the city's surface
lines. "Theories, infcrences and past
history" had been invoked by Mr.. Burr,
said the receiver, in an effort to stf1e
facts and figures" which "show con-
ciusively' that the lines must charge
for transfers or go out of business.
'ln the interest of justice and fair
ness to the public" said Mr.. Hedges S
statement, "T am compelled to make a
direct issue with you on the facts.
Nothing does more to destroy in the
public mind confidence in our form Of
government than Il failure on the part
of officials to be accurate in statement,
tr&"!: - discussion, making facts the
bass for deuuctons."
Facts about the stleetcar lines arc
what we have been trying to get for
six months" said Mr.. Burr, in reply.
The receiver wants higher fares first
and facts afterward."
Criticised Two-Cent Transfers
The interchange of statements fol-
lowed Mr.. Burr's published criticism
of the order of the Public Service
Commission authorizing two-cent
charge for transfers.
Your fundamental propositions -
Mr.. Hedges wrote, "is that these sur
face lines are not now making money
because obliged to pay certain ex-
cessivc. rentals for leased lines
and that when the public is asked tc
pay higher fares it is being mulcted
by the receiver through the authority
of the Public Service Commissioners
In fact, you charge that the recent
order of Commissioner Nixon was
based upon an estimate of operating
expenses including these rentals and
that the order is without proper foun-
dation' because based upon a false es-
innate of expense. These statements
are erroneous. They are not justi.
fed in the record of the proceedings
before Commissioner Nixon.
mo rental. small or big, swollen OF
otherwise, was counted in figuring the
operating expenses of the system. Or
the contrary, rentals were excluded tt
avoid all possibility of controversial
criticism in the endeavor to present
the worth of the railroad propert,
and what it is earning to-day
Value Over s50,ooo,o 900
"These appraisals show that at pres
cnt prices the actual reproduction
cost OF the property of the New Yorl
Railways system was considerabl,
over $100,00000O. These appraisal!
showed that even at pre-war price
and making allowance for every pos
sible depreciation which critical in
genuity could suggest the value o
the property was we'll over $50 900 OOC
eve further showed that during tn
six months ended March 81, 1919, tn
system earned in operating incom
above operating expenses and take
only S201, ,2G5 This was wholly ex
elusive not only of rents, but the in
terest on any mortgages. This result
cd in a winter free from snow storms
which would have added an expendi
ture, say, Of $200,000. 1t was show,
that the system during those si
months, produced income at the rat
of less than 1 per cent on even thi
ultra-conservative apprisal of $50 900
600. This was without counting an
reserves for necessary contingencie
allowed by law and without allowing
cent for fixed charges such as mort
gage interest, rentals on leased line
or depreciation.
Loss Outside Rentals
'What advantage is there in discus
sing at this juncture alleged eXcessiv
rentals when the receipts are not meet
| ing operating expenses without payn
\ any rentals whatever?
\ "Without relief, temporary or fnall
/ adequate, your position requires thl
the roads should continue to be ru
| by the expenditure of capital Yo
i apparently, in your published article
deem it a moral dereliction for a re
I cever by Federal appointment of
public utility to try to protect thu
/ property and the capital involve
against waste, even to the extent {
/ crtcising Public Service Commis
sioner for performing public duty
manner demanded by his intelligenc
and justified in his conscience.
Nv hatever views you and | may hay
{ on theories of government, the relation
snip of ipalities to public util
ties, and whatever result the city al
thorities are trying to effect while
property may be sweeping on to d,
!. struction, we cannot in conscience avoi
J the facts
Says Delay May BE Vital
"You say that no relief should !
!. afforded until The final readjustmcl
!. Of all conditions, In the interim
| property may Dc Destroyed Ccrtainl
! you would not advocate the destructic
! of a property OF seek 70 render
: franchise worthless so that the cit
! could force retlrn OF properi
/ through that channel. You certain
! would not argue tina. the rccciv,
] should be compelled to consume tt
! capital represented in the properr
! under his control before justice shou
! be done
81 am unwilling to believe that yc
/ would seek TO sustain either of the.
! propositions. Why then address II
!! public on theories, differences and pa
history. when the present and II
1 iacts' demand high intelligence an
4 keen conscience for solution? It
! tune to talk to the public and not
1 the public. The public can unde
stand facts. They naturally bccon