The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-11
CHALLENGE SHONTS
TO GIVE UP SUBWAY
Members Of Estimate Board
Suggest Alternative in Deny
ing Fare Raise.
LONG STATEMENT ISSUED
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State Constitution and City
Contract Cited in Formal
Action Against Increase.
LONG STATEMENT ISSUED

The Board OF Estimate NesNciuE
virtually dared the marlborough Rapid
Transit Company TO throw up its con-
tracts with the city for the operation OF
eubways In formally denying the APP
plication of Theodore L. Shonts, the
roads president. for an o!gh: cent fare
statement was made public setting
forth the conclusions OF the Committee
OF the Whole. In this paragraph the
gauntlet was thrown down to the trac-
ton company:
"It the marlborough is sincere In its
claim that five cent fare Is "A losing
venture and that the existing contracl
is no longer profitable way can doubt
less be found to terminate the contract.
il the PETERBOROUGH is unwilling 10 do
this nothing further should be said on
the subject of increased fare
Lest the point should be lost Mayor
Hylan emphasized the position of the
board by saying:
Tn other words. II the marlborough
is unable to comply with all the terms
of the contract with the city all the
PETERBOROUGH has to do is to- turn back
the lines to the city and the city will
operate them"
At the same time the Board of Esti-
mate denied the application Of the New
York Railways Company for an eight
cent fare and three cent charge for
transfers II was said that the reasons
for this action would be formally drawn
up and made public at the meeting next
week.
Undecided on II. II. r. Cor-ceiver.
There has been some discussion in the
Committee of the Whole as TO whom the
city would recommend to the court as
coreceiver of the Brooklyn Rapid Transit
Company. The Mayor. 1t is understood,
believes that Comptroller Craig is the
logical man to repre- sent the city's in
tereSts in this connection. but other mem
bers of the Board OF Estimate hold that
no elected official should act in this
capacity.
An offer from Mr.. Shonts to elect to
che marlborough board any person who
might be named by the Mayor was re-
ferred to the Committee OF the Whole.
As all the discussion had taken place
In the secret session of the Committee
Of the Whole the action in open meeting
OF the Board of Estimate was taken
without further comment. The vote 20
refuse the fare increases was unani-
nous.
The constitution of the State was
quoted in the statement to prove that
the Board OF Estimate could not grant
any increase OF fare TO the marlborough.
which holds Il contract with the city to
operate the rapid transit lines. Article
I'LL, Section 2S, reads:
THE Legislature shall not. nor shall
the Common Council Of any city. nor any
Board of Supervisors, grant any extra
compensation to any public officer, SER
want or agent"
Attention was called to the clause in
the contract with the lnterburough read
Ing: THE lessees shall during the term
OF the contract be entitled to charge a
single fare upon the railroad and the eX-
listing railroad, the sum OF cents, but
no more" The statement then said:
1.-THE contract with the city is the
foundation upOn which the INTERIOR
ough's securities rest II II proposed.
however. that the compensation OF the
1nterborough be increased 60 per cent.
that is, that it be permitted TO receive an
cent fare instead Of a . cent fare. as
provided in the contract. Ii other words.
the municipal authorities are asked to
sanction an arrangement whereby every
fare payer is taxed 3 cents 10 prevent
any loss whatever falling upon the In
terborCuCh security holders by reason of
deficiency Of income due to the war or
other causes.
Would BE m Uncarncd Income.
There appears to be 10 reason why
the burdens caused BY the war or other
wise should thus be shifted from the
holders o. Interborough securities to thu
travelling public There is no nretCaSa
that the income from II , cent fare is not
sufficient to meet all operating or other
current expenses 1t j. merely the ques-
ton OF whether the lutrrborOugh's Sc
i
not earned. or whether they shall wait
for 1t according to the terms Of their III
vestment Against such a proposition
stand the contract obligations and the
strongest principles OF justice and
equity"
The statement curreCts fallaCy exist
ing in some minds that the city must
make up any deficit in operating eN-
penses or in any way guarantees a GER
tain return to the marlborough. 1t Is
pointed out that under the contract the
Peterborough is entitled to take out of
profits received from five cent fare
operating expenses. depreciation charges,
the so-called preferential of $685. 900,
and per cent interest on its invest
ment. after which comes the interest
on the City's Investment. Any deficiencies
are cumulative. but. If they arc ever
met, it must be from the earnings Of
the road.
There is no prospect that the city Of
New York will ever receive anything
whatever out of this arrangement" the
statement declared. either to carry OF
TO return to investment. or as profit The
cty's Investment stands total loss
provision for which must be made I'm
each years taxes under the operation of
the contract. The public cannot be
taxed however. to make good any losses
that the IutcrborUugl may suffer"