The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-02-01

surface lines can be permanently main
tained and developed by the operating
companies without an assurance of suf-
f,cient earnings to Justify the investment
OF the additional capital that will from
| time to time necessarily be required to
keep up with the increasing demands Of
the traffic OF the city"
| What the war did to the PETERBOROUGH
is graphically shown by the following:
| This country entered the world war
In 1917. For the three years ended
June 80. from 1918 to 1917. inclusive.
the net corporate income OF the Inter
borough was:
1915. Is. 0ee. 4s4. 81
Isia... ACKNOWLEDGEMENTS. s7l3 .328. 90
1biI.... ................ S.eoo.Soe.o2
AS compared with those figures, note
what happened In the three years next
thereafter:
inls... $<e62. 75e. e2
i eae pDeeff'cc,it..'.....'..'.. sssS AK 90
That was what happened. notwith-
standing the fact that the number of
passengers carried in 1915 was s47,37s,-
2s6. whereas In 1920 the passengers
transported over the marlborough COM
pany's lines aggregated s55,13S,110.
Paralysinx City's Credit.
Mr.. Hedley considers one OF the most
unfortunate phases Of the recent situa-
ton the paralyxng effect II has upon
the city's credit.
with the rapidly increasing compile
ton OF the dual subway system" said
the Interborough's president and gen.
eral manager. the city will have made
an investment OF about $3.50. 700, 900 In
rapid transit Inasmuch. however. as
this $250,0oo,o00. owing to an made
quate fare, Is giving the city no return.
II Is frozen credit Not having II
liquid for immediate use, new funds
must come from taxation. But taxation
has already mounted to a point which
would make any further increase det-
! rfment TO industry rather than a stimu-
liant ., 80
1.-THE city can build no more snbways.
II would have to borrow the money to
build them. and the debt limit prevents
1t has neither the credit nor the cash
available. An adequate fare upon the
subways. sufficient 20 make them self
supporting. would not only put the city
OF New York In a position to get new
capital. but Il would also make It pos
sibie for private capital to be enlisted
for the same ends.
New facilities. becoming In turn self
supporting. not only would remove an
annual charge OF about $4,000. 900 from
the tax budget but would also render
! available s25o.o0o.ooo further credit for
the city to use In subway development
or in schoolhouse construction. court
house or hospital construction. improve
ments OF streets and numerous other
public uses.
Because the subways are not self
supporting there Is an absolute halt In
transit expansion. The city Is now at
least ten years behind in a subway
building programme. The city Is grow
ing every day. Congestion already is al
most uncomfortable. The only relief IL
more subways. but you cannot even hope
to get more subways on a-five cent fare
While our gross revenues from the
| subways increased ~ per cent. In the
last four years." Mr.. Hedley continued.
operating expenses have increased 1875
per cent Increased costs have more
than eaten UP the increased revenues
Our payroll Is now about $4,000, 900 a
year The rate OF pay OF our employees
Is more than double what Il was at the
time we entered into the contract with
the city for the construction and OPERA
ton OF the enlarged subway system on
the basis OF a Ave cent fare Wages
alone arc more than 81 per cent. OF all
our expenses and the possibility of a
drop In wages docs not Immediately help
us. because we have wage contracts rum
ming with our employees right up to 1922.
Take one more item. AT the time
we entered into the subway contracts
with the city for the enlarged system
we were buying coal at less than Ss.25
a ton. delivered Now the freight and
lighterage on coal alone amounts to
ss.s0 a ton, and we use more than
1000 tons a day. Coal absorbs more
tran ID per cent. Of our total operating
costs. and the freight and iightcrage on
coal alone are now $1,000 a day more
than the entire coal bill was formerly.
or course. we will never get our ma
'ter'als and supplies for nothing. but
even were they given to US the COM
pany would still be losing money at a
tremendously heavy rate on a Ave cent
fare.
The company now Inns used up all
It's reserver both of money and ma
terial In meeting previous crises we
have exhausted all our emergency re-
sources. The last to 60 was our real
estate. useful during construction, but
no longer needed for operation. That
was nuctioned at n sacrifice The In
vestors whose savings went to help
hu'ii tho subways have lost more than
800. o00.o 900 IN the shrinkage Of their
-rcvritics. II is by the consideration or
our cFeuitors Wnose lnterest IN our lines
lies In our continued soivency. that we
have managed TO survive until the pres
ent time With the very best OF will
they cannot wait forevN
obstsc'es 60 CITY, r.sssssion.
II is prevalent rnisapprehe rs.,on,
Mr.. Hedley said. that In case ot the
fnterborourh going into the hands OF n
receiver. the city could take back and
operate, the subways itself TN that
event" said he. the subways would
20 70 the bondholders for operation un-
der the contract. so long az the OBJ
orator pays the rent the city has no
right TO take over the subways until
ten years after the beginning OF the
contract period. or eight years from
now. And even then, the city would
have 70 reimburse the 1nterboroush for
the millions Of dollars that company