New-York tribune., 1919-12-30
System C.an BE TAX Over
Without Cost and Stock
holders Assured of Re-
turn. Says Comptrol!er
Companies to Face
Sweeping inquiry
Estimate Board Expected
40 Aid Action 10 Gea
Roads at Actual Value

A plan whereby the city proposes TO
take over all traction lines without
the expenditure OF a cent OF city
money was disclosed last night 10 Tn
Tribune by Comptroller Charles l..
Craig
The first step in the carrying out Of
this program Is to be taken o-daN,
when resolution Will be offered at the
meeting Of the Board Of Estimate and
Airport rtionm"nt calling for 4 sweeping
investigation of the traction com.
panics.
This inquiry. Comptroller Craig SAID.
has for its purpose the fixing OF the
actual physical valuation Of the vari-
Gus subway. elevated and surface hines
IN the greater city. This valuation, as
opposed to stock outstanding h said,
would be the basis Of the lnuncipality <
project to assume supervision OF the
lines if the companies should agree TO
the plan.
Approval Of Plan Expected
The Board OF Estimate, it is re-
ported, will probably vote approval of
the investigation. and it is presumed
that Mayor Hylan and the other mem
bcrs Of that body arc in favor OF the
plan. The idea, smilur in It's main
features to that advanced by Transit
Commissioner Delaney and pebble
Service Commissioner Nixon, is the
first constructive stand taken by the
municipal authorities toward solution
Of the traction muddle. In substance
the plan calls for:
Physical valuation of the .raction
lines.
Reduction Of stock outstanding ON
percentage basis until it represents
only physical property.
Conversion OF this reduced STOCK
holding into Il first lien on the prop
erty. -
City guarantee Of the principal and
interest Of these Investments.
All obligations OF the company to
be met from income, if possible; if
not, through taxation.
Use OF surplus profits from re
munerative lines to overcome dencits
on non supporting systems.
Reply to Fare Increase
had been working on this plan for six
weeks, and would not finish revising it
until this morning, the announcement
yesterday came as a direct reply to the
memorandum calling for a temporary
lare increase TO cents made public BY
Federal JNdgc julius NJ. Mayer
Judge Mayer, in his statement. SAID;
NO matter what may be said for OF
against the wisdom OF ultimate munici-
pal ownership and operations it is cIeal
that municipal operation in the near
future VIII be imprActicabc. 1t is a
matter OF common knowledee that the
city is pcrilously near. if it has not
actually reached, the debt limit, There
Is no possible machinery whereby the
clty can take over the traction proper
ties without the Investment Of a large
sum OF money"
Comptroller Craig in explaining his
plan Yesterday, after telling Of the
lntrlcacies Of municipal financing and
the general ignorance with regard TO
1t, said The city could take over
these lines without spending cent
Such a plan would not affect the city's
debt limit in the slightest. as we are
certain the traction lines could be run
so efficiently that they would be self
supporting, and thus not come within
the debt Imitation"
Question of Charges Held up
Comptroller Craig said the question
OF the fare to be charged by the com
panlcs under city supervision and
whether the companies would be al
lowed to continue the operation of the
INES were details which would have 10
De determined upon if the plan meets
the approval of the city authorities. the
companies and others interested. City
representation on the boards of d.
rectors of the company was another
matter, he said and had not been
fully worked out in the proposed
! action.
Inc comptroller referred to several
managers and corporations now dead
and defunct, who, he said, had printing
presses ana ran off stock certificates
Just az fast as they could sell EN-"
They had nothing on some Of the
traction companies" Craig. continued.
In many cases. doubtless. money paid
Tor STOCK was stopped on the way TO
the company's treasury The INQUIRY
of the Board Of Estimate is intended
to find out who got this money. or at
least to make certain it was used for
the companys plant, and to ascertain
the precise amount OF money actually
invested in the traction lines.
City Guarantee Offered
"lf the stockholders Of the company
have stock which is represented bv
actual physical value in the property
the cfy's plan is to guarantee the prin
cipal and the interest on these hold
ngs. If man has 100000 worth of
stock, and we find that a lot of that is
watered Of course. we. cant guarantee
him his S100,0C0
But these people have stock in com
panies which allege that they are not
able to make money, and the value of
the stock is greatly decreased. Here is
q chance for these people to come in
and be assured by the city that they
will be paid their money. with in
terest. on a basis Of fair valuation of
the property.
"The city will give to them a first
lien on The property, WI .ch would take
precedence even over the wages OF CON
ductors and motormen, and they would
retain their interest until they were
paid out.
"These obligations and all expenses
Of operation, would have to be met