New-York tribune., 1920-07-26
Nixon Says His
Plan Will Cut
C,arfares Here
Commissioner Urges Adop.
ton of Flexible Rate on
All Lines; Declares Board
Aims at a Reduction
Free Transfers Favored
Lack of City's Cooperation
Delays Solution at Peo-
pies Expense. He Ayers

Nixon in statement issued yesterday
declared that the adoption of flexible
fares on the lines of the various street
railway companies, as recommended by
him several months ago, will eventually
result in reduction of fares for New
York City,
He issued his statement in the ex-
pectation that railway companies will
begin filing applications with the
Public Service Commission for modfi-
cation Of rate of fare. as a result of
the recent Court of Appeals decision
confirming the powers of the Public
Service Commissioner. Mr.. Nixon said
tho commission does not desire to sec
sares Increased, and that 1t is using
every effort to establish a cost-of-
service fare which will lead to a re-
duction
The lack of any cooperation or as
slstance from the city government y
his statement reads, "has delayed the
solution of the traction problem in New
York to degree most hurtful to it's
people, and in this connection my posi-
ton, many times expressed, was that
the city government should have the
last say
I'VE must forestall dsintegration
and discontinuance of service by in
st1tutlng universal fare and free
transfers. 1t will facilitate prompt ac-
ton If the various companies now con-
templaitng. applications to this com
mission Will prepare a joint proposal
and not attempt to have this question
disposed of piecemeal."
Suggestions of Mr.. Nixon
Mr.. Nixon makes the following sug-
eestlons regarding transportation prob
lens in general
Each of the present railroad sys-
TENS to be simplified by the consolida-
panles into one railroad corporation,
and, If possible, unified control of all
systems brought about
All holding companies (not railroad
ccmpanies) should be abolished.
perpetual franchises to be sur
rendered and be replaced by termn-
able or indetermnate franchises.
All leases and underlying contracts
to be terminated.
The city to have the option of ac-
quiring the properties at an agreed
valuation If the city so elect. the pur-
chase price may be amortized out Of
earnings.
"A flexible fare to be provided, auto
matically adjusted to meet the cost of
service. The cost of service should be
so flXed as to cover reasonable return
on values, the rates paid on such in
vestment to be those warranted by
liked rather than speculative return.
Should Yield Fair Return
"A standard of service of car mile
per revenue passenger to be fixed arbi-
trarily for six months between certain
limits. During such time careful in
yestigation should fix such limits def
nitely
chase of new equipment and the put
ting into effect of service to secure
greater efficiency shall be submitted
"The Investment which is entitled to
return shall be determined by COM
mittee of three to be named by the
Court of Appeals, if it can so act, of
which one member, however, shall be
nominated to the court by the city.
"The cost of service fare should yield
Z fair and adequate return upon the
cost of capital actually invested in the
plants, and this does not mean the cost
Of reproduction nor the carrying of
obsolete, worn-out or dead equipment
or facilities
Outstanding bond and other capital
issues must be weighed with full his
tory OF their issuance, the prices re-
ceived for the same and the DISPOSE
tlon of the proceeds.
'All superseded property cannot be
considered in an estimate, but due con-
sideration as to possibilities to amor
TIE such property out of returns shall
be given, and if the committee should
conclude that any such property is
proper charge to be included in the
cost of property entitled to a return, it
shall be added or carried in g suspense
account and charged to operating eX-
pense over a term of years
81 am satisfied that by providing Ger
tain surplus funds this seemingly in.
tricate solution can be arrived at
within six months, but with the ap-
pointment OF sincere public-spirted
appraisal committee, earnestly deter.
mined TO arrive at fair appra sal, a
tentative plan of operati tion could be
effected within ten weeks.
"A system of accounting based upon
that of the Interstate Commerce Com
mission, modified to suit the require
ments of the local situation, is to be
established. The standard of service
of course, must be maintained.
The investment account, once deter
mined and approved, is to be increased
OF decreased only with the approval Of
the Public Service Commissions
There shall be established renew
al ana replacement reserve, maintained
oy the payment thereto of a certain
percentage OF the investment in depre-
claole property and an injuries and
damage reserve, maintained through
credits charged 20 operating expense.
state and city taxes to be consid-
cred as part of the cost of service;
the Federal income tax, however. to be
matter for separate adjustment.
"The flexible fare control fund shall
he formed by credtng to it retruns
IN excess Of the cost of service This
fund to have an upper and lower limit
controlling the decrease respectively in
farces.
If the various railroads are disin
tergrated and application is made to
the commission to charge q fare on
each of the lines which were formerly
operated as one, and which lines made
up the svsteIn, 1t may mean under the
recent court ruling Il greatly increased
fare for q ride formerly costing the
public 5 cents.
"The plan outlined here would. if put
into effect, actually reduce the fare to
the travelling public
THE situation is that the courts per-
NIT certain separations which Will lead
to increased fares This commission
does not wish to see fares increased
and it is usin~ every effort to bring
about cost o. service fare which will
be but little over the present average,
and will in short time lead to de-
cided reduction