New-York tribune., 1919-03-23
Receivership Is No Aid to
Such Plan, and One Rea-
son Given Is There's Not
Enough Money on Hand
Smith Denies a Deal
Governor Says He Hasn't
Heard of Working Agree
ment With Mayor Hylan

1t will be impossible for Mayor
Hylan to obtain municipal ownership
of the transit systems through re-
ccivership, according to the unanimous
opinion expressed yesterday by finan-
ciers and political leaders, following
the bankruptcy of two Interborough
crganizations-thc New York Railways
Company and the Interborough Con-
solidated Corporation.
report that Governor Smith had
working agreement" with Hylan
and other city officials to force city
possession and operation through this
channel was referred to the Governor
himself at the City Hall.
Il haven't heard thing about it,
he said. "No one has told me any
thing"
It was pointed out by a prominent
official that the insolvency of the In
terborough corporations did not affect
the clty's power Of acquiring them. He
declared that if the city did not have
money enough to purchase the subways
when they were solvent, it would not
be able to do it when they were de-
ciarcd bankrupt The physical valua-
tion of the public service corporations
would remain the same, he said.
City Hasn't Enough Money
''Thc city cannot buy anything which
costs more than $11,000,000" he said.
That is al 1.-THE money on hand.
"The debt limit is what win keep the
city. from acquiring the street rail
roads, suhways and elevated lines. In
order 20 remove this, there would have
10 be legislative amendment and
there is no near possibility of this step
being taken.'
That the receiverships may have
been sought by the Interborough d-
rectors 10 keep their lines out of the
hands OF the city, was another theory
advanced by financial men, following q
statement of President Theodore P.
Shonts. When he was asked whether
the recelverships might not outlast the
present city administration, Mr..
Shonts smiled and said:
Il know OF one receivership that has
lasted SO long that it is unable to pay
interest on the receivers certificates,
and now there is talk of appointing
receiver for the receiver"
Difference in Two Boroushs
Another angle in the involved trac-
ton situation is that while in New
York only the street railway lines have
been declared bankrupt, in Brooklyn
all the lines except the surface cars
have gone into receivership. 1t is be-
lieved that in each case the system
showing the poorest return, or a de-
ficit, has been thrown into the discard,
while the lines which are making
money are retained. Heretofore, in
many cases, the profits of one branch
OF the system have ben gobbled UP in
maintaining the other
There is no mystery in the condition
whereby Manhattan surface lines do
not return profit on a fve-cent fare,
while Brooklyn's surface lines get
along SO we'll that they survive even
the insolvency of Brooklyn's elevated
and subway lines.
Manhattan Island is a long, narrow
piece of land. 1t thus lends itself to
the north and south travel of consider
able distances, which is the chief sup
port and purpose of rapid transit.
Brooklyn. on the other hand, is spread
out in such way that no one or two
rapid transit lines can pick up all of
the long haul travel
The B. r. T. receivership came into
court again yesterday, when Lindley
NJ. Garrison, the receiver, asked in
structions of Judge Mayer egarding q