New-York tribune., 1920-04-12

Contracts Do Not Protect. Hedley
Argues

Argues
TO tho Editor Of The Tribune.
Sir, I have read with interest the
editorial in to-day'a Tribune entitled
''The Jenks BILL" / must confess, too,
that have read IL with a great deal Of
surprise, for I And therein this state
ment: Although Mayor Hylsn does
not know It, the city (under Its sub
way contYacts) must meet the deficit
when a 6-esnt fare fails to realize
enough to meet the operating and main
tenance expenses and tho interest
charges Of the railway companies, so
the Jenks bill does not apply to the
subway" ! had observed . similar
statement In previous editorial Of The
Tribune, but had supposed. Of course,
that 1t must have been made inadver-
tently. for tho subway contracts make
no such provision.
They do specify the order in which
deductions shall be made from the
gross income Of the company; and in
order that 1t could be made possible
for the marlborough Rapid Transit
Company to borrow people'a savings
for use In helping to build and to equip
the nav subways. certain payments
from the gross revenues >.~xe to be
made to tho marlborough Company be-
fore payments from the same revenues
were to be made to the city.
Even with the recent large increase
in revenue, the Interhorough Is not at
the present time canning tho interest
on its bonds. which represent. dollar
for dollar, actual cash put into the
property.
That Ia why the city is forced to meet
the interest on it's subway investment
by taxation, As against the alternative
Of making ita Investment self-support-
ing by an adequate fare. which. no mat
tar what 1t might be, would not give
a return to the Interho1eugh Company
a dollar beyond the sums specified In
the contract. And tho Jenks bill does
apply to the subway, as you will dis
cover by reading the bill itaelf. which
has been sent to you.
To my mind, the important consider
alton In all Of the situation is tho in
terest Of tho community in preserving
and assuring for tho future not only
good service, but extensions Of service
New York City ia far behind in the
proper extension program, but based
upon Investment history Of even the
subway, not dollar could be secured
from private investors under the pres
ent conditions for the building of a
single foot Of new subways.
The situation with rapid transit
facilities is. in many respects, parallel
with tho situation aa to it's housing
facilities. The city is greatly under
built as to both. The solution of one
is more housing, the solution of the
other moro subways. This Is why I
must disagree with The Tribune state
ment "the principles on which munic-
irality should do business are obviously
those q private person would apply"
It makes very little difference to the
public whether John Smiths grocery
store fails and disappears from the cor
nor OK not. It makes . very vast pub
lie difference it it's transit facilities are
unable to fulflll the needs of tho COM
munity. Communities cxnnot be pros
porous without efficient public utilities
and public utilities cannot be efficient
without prosperity.
AS to the Jenks bill: It ia como to
ha varnuuiva1 +Nok ovw Cvoi o.. s.
businesslike and unscientifc. A SER
vice-at-cost measure. as has been
proved by actual experience in Cleve-
land, Cincinnati, Montreal and other
cities. is scientific and businesslike.
1t ia not fair to term it an "increased
fare" measure; It is a flexible fare"
measure. Neither should It be termed
"cost-plus" measure.
Operation under ssrvice-at-cost meas
ure takes the fare question out Of
politics and settles tho fare problem
once and for all. on basis that Is both
sane and just.
FRANK HEDLEY,
President and General Manager.
New York, April 9, 1920.
lit seems as if Mr.. Hedley confirms
the point that The Tribune made
namely, that subway losses under the
leases practically fall on the city's
treasury. AS he indicates, the choice
is between having the passenger
paying, say, m extra cent or the city
treasury paying 1t. It may be that
tho lnterborough's income at present
fails to meet the company's preferen-
tials, but there is a good prospect
that 1t soon will. The recent rise in
the market value of Interborough
bonds attests this faith. With re-
spect to the jerks bill, we sought to
make plain that while the contracts
OF the surface lines and other street
railways are unfavorable to the COM
panies because providing for fiat
fares with no company preferentials,
tho subway contracts are Of differ
ent kind in that the subway compa-
MES get fair return on their invest
ments before tho city gets anything
on its investment. So the jerks bill