The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-22
SHONTS SAYS |. R. T.
ALSO FACES CRISIS
Net Income Deficits Starting
Last July Reach S841,000
for January, 1919.
NOT EARNING INTEREST
Must Get Higher Fares to
Weather Storm-War Part
ly to Blame for Losses.

ly to Blame for Losses.
Theodore P. Shonts, president OF the
marlborough Rapid Transit Company,
asserted last night that the company
Is not earning the interest on its per
cent. refunding bonds, This announce
ment was a complete surprise. for while
the Interborough family" ae q whole
was not considered a very stable struc-
ture. there was very little doubt enter
tained az to the strength OF the Inter-
borough Rapid Transit, the foundation
Of the whole structure. In this connec-
ton also Mr.. Shonts declared. that he
believes the company will be able to
meet It's interest obligations In July,
but that the real test OF the company's
stability will probably come on the fol-
lowing interest date, which Is January
1, 1920.
Referring to the receivership Of the
PETERBOROUGH Consolidated the president
declared that It was inevitable. 1T Is
the second blow" he said, that I've
been fearing and predicting, but hoping
would not fall"
This 10 a great shock to ell OF We
who have been lighting for so many
months to prevent disaster to 80 many,
many thousands OF innocent owners OF
these securities We have faithfully,
earnestly and truthfuIly tried to state
all OF the facts 10 the public and to
the public authorities and in this way
convince them that without help in the
shape OF increased revenue these things
would happen. We feel that We have
done all that could possibly have been
done, and we have no apologies to offer
for our efforts either in that regard or
in regard to the results Of our trans
portaton efforts In operating these COM
panies.
War q Contributing Factor.
80 far as New York Railways 10 con-
cerned, from the time we took posses
sion of them January I. 1912, until this
country entered the war, the net re-
turns each year showed Improvement
and the physical properties showed Inn
provement II the same rates OF costs
had continued we would have been to-
| day more prosperous than ever.
| so far as marlborough Rapid Transit
| 10 concerned, during our life, as well as
during my administration. which covers
our life except for two years. there has
| been a steady increase in net corporate
income, from $4,000, 900 and little more
| in the first year TO practically 100000
| in 1917. the last year before the war.
After maintaining these properties and
| operating them with n degree Of safety
such as has never been equalled any
| where in the world. we administered
| them so as to create a book surplus Of
| 10000 and an actual surplus of q
| couple OF million more. with these con-
| dittons we felt the marlborough Rapid
Transit Company as solid as the Bank OF
England. ard Il seems ircomprehensible
| that in a few months conditions could be
| so changed that We are unable 10 earn
| tho interest on the 5 per cent. bonds
| However, such Is the case.
from the time we put our sigma ture
to that contract (the city's contract)
\ until the present time We have done
| everything to carry out the spirit as
we'll as the letter OF the contract. We
were opposed to the dual subway sys-
tern and said II was uneconomic, but We
carried out every, obligation, so from
| no point OF view have we failed to make
good. Therefore, II seems Incompetent
| sible that the authorities will not give
us relief-relief not TO make more money.
| but to maintain the credit OF ourselves
| and Of the city and TO carry out our
| obligations 10 those hundreds OF thou
sands of people who bought these
securities. IT seems impossible that they
/
will drive the last great system 10 dis
aster. We have fought to the end in
these two receiverships and We are going
| to fisht TO the end against the third one.
| We are fighting and hoping-still hoping
! for an increased fare"
Higher Rate of Fare vital.
| us it absolutely vital to the Inter
borough Rapid Transit Company to get
n higher rate OF fare" Mr.. Shonts was
asked.
at is" he replied. I'VE are not earn
| ing tie interest on the per cent. bonds.
We have been driven ont OF two OF our
trenches and We are going to make a
hard fight in the third. We are relying
on our ability to arouse public sentiment
to the point where the public authorities
will he compelled to recognize our plea"
| Mr.. Shonts was asked about the report
that he was TO resign as president Of the
various companies making mp the Inter-
borough family. He laughed as he re-
piled: The idea Is new 10 me-" and in
answer to a further persistent question
| You have no intention then OF resign
ing?" no declared emphatically: mot on
your life You don't zee the white flag
anywhere around me. do you
Some figures on the operations OF the
iInterborough Rapid Transit Company
were given by Mr. Shonts in reply to
several questions along this line. lie
showed that the operations for January
resulted in a deact OF sll6, 900 more
than those OF December when the deflclt
was $4,000. The company has re-
ported a deficit each month since last
July. as follows: July. sl74.Ooo; Au-
gust, s517 900: September. *s4l, 900
October. $4,000; November. 3S3e. 900
December. s224.oOo; January. Ssi1 900
ILL., reason TO- tho big jump in the defci;
T6stNseen fhTfnonths ofAs@ and Augi st
he explained. was the increase In the
wage scale. which became effective on
August /.
Asked about the report that Mayor Hy,
Ian had rather favored a receivership fol
the marlborough lines In order to make
easier their plan for municipal operation
ne referred the questloner to the report
OF Corporation Counsel Burr recently
published on the traction lines And
going further, he declared that when tn.
War Finance Corporation came to New
York last year to aid the company ant
prevent n receivership. "a gentleman in
timated that the authorities would no
l1ook upon receive-ship OF the INTERIOR
ough Gs an unmiNed evil"
'If that is their purpose" Mr. Shonti
added at makes II more wicked Will
all of there people whose incomeS are
dependent upon the PETERBOROUGH securi
ties which they purchased in good faith.
The question Of whether there wa.
any doubt about the Interborough Rapio
I 1T. III. ~.