New-York tribune., 1921-09-30

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with it's new and many opportunities
for substantial economies, an increase
is demonstrated to be necessary. Then
and at the conclusion of each succeed
ing fiscal year the rate of fare will
be determined automatically by the
! status of the contingent reserve or
barometer" fund, and shall be put
into. effect by the board of control.
During each year of operation under
the plan the rate of fare shall be ade-
quate to provide for cost of operation
and interest and sinking fund upon
the bonds and other current obliga-
tions of the consolidated system, in
cluding provision for the maintenance
of the contingent reserve or barometer
fund.
This will operate as follows:
AFTER payment Of operating expenses
and fixed charges (the fairness Of the
amounts of which is insured by the
valuation Of the properties by the
Transit Commission and the control
over expenditures by the board of con-
paid into contingent reserve or ba-
rom cte- fund If the available surplus
keeps this fund above specified mini
mum the fare is to be automatically
lowered; if the fund falls below a
specified minimum, the fare is to be
automatically increased util the re-
serve is restored
For example: Assume that the nor
nal amount of the barometer fund is
fixed at $4,000. 600 Ii it rises to 1885,
0,000, the fare is to be decreased; if
it falls to $1b,0o0,000 the fare is to be
increased.
In short, the purpose Of this is. after
flXlng the base of proper valuation and
determining the operation expenses
ana nxed charges, to make the decision
, as to the rate of fare as autom attic as
Is humanity possible. Upon the new
basis the public can be assured that all
money expended is properly expended
| Tor necessary cost, and the rate of
fare, therefore, will reflect the actual
and necessary cost of the trans porta-
ton that the public gets, uninfuenced
! by any opportunity of private gain
based upon stock ownership.
Transfers on all of the lines of each
of the three operating systems will he
established at proper points as rapidly
as nnanclai conditions will permit.
Application of Proceeds
Each operating company will paw ifs
own operating expense and retain its
own maintenance and depreciation re-
| serve as authorized by the terms of it's
tease. and turn all surplus funds IN
"A company. "A" Company will pool
the moneys so received and distribute.
same as follows:
(a) 1t shall pay to the holders of
lts securities the fixed return IRE
scrloed, and to the city the interest
upon It's rapid transit investment.
(o) IT shall pay into an amortiza
ZION lund the specified rate for the
alhortlzatlon OF its bonds, and to the
Comptroller of the City of New York
specified rate for the amortization
OF the corporate stock of the CITY is
sued tor rapid transit construction.
Nc) 1t shall make good any deficit
IN tne cost of operation in any pre-
ceedlng year sustained by any one
OF the three operating companies.
tdl 1t shall out of the remaining
surplus maintain the above men
toned contingent reserve or baro-
meter fund
IN order to provide an incentive for
efnclent and economical management
.here shall be set aside each year bv
the board of control out of the surnlus
earnings of the unified system after
the payment of all obligations and the
maintenance of the barometer fund a
sum to be distributed or used for the
Jolnt benefit of the operating personnel
OF the unified system and the holders
OF the consolidated company's bonds.
This fund, within the limits of the
available surplus, shall for the
purpose OF computing allotments
prescribed, equal 3 per cent interest
on the purchase money bonds issued
by the consolidated company. When
the amount so available has been
determined by the board of con-
troll it shall be allocated, one-half for
the benefit of the operating personnel
as hereinafter indicated, and one half
for the payment of additional intere st
upon the outstanding purchase money
bonds. but subject to the condition that
with any increase OR decrease of fare
above or below the rate of five cents.
such fund shall be decreased or in
creased, as the case may be, on the
basis of l per cent interest on the
bonds with each cent of fare variation.
In similar manner, out of the re-
naming one-half of the fund referred
to, there shall be allocated under the
contingencies mentioned a like amount
for the benefit of the operating person
mel of the unified system, which al
! located sum shall be expended under
the direction of the board of control
for the collective benefit OF the op
Grating personnel.
If, however, the board of control so
| determines, the said sum may be ex
pended under the direction of the
board of control TO provide benefits,
such as insurance and pensions, for
the operating personnel and to reward
employees who in various groups have,
during the preceding year rendered
conspicuously efficient service.
There will be included in the con-
tracts for the transfer of the several
lines to the consolidated company pro
vision for obligations to contract and
tort creditors and co holders of re-
celvers' certificates of Indebtedness.
employing for this purpose, so far as
/ can be agreed upon, the bonds and
short term securities Of the consoli-
dated company, due allowances there
Tor being made in the price at which
the respective properties are to be
taken over.
Leases and Amortization
The term of the leases shall be for
so long as is necessary to amortize the
valuation as fixed by the Transit Com
mission.
All leases to be subject to extin-
gufshment or recapture by the city at
the end of ten years upon payment of
the then unam ortized part of the valua-
ton of the leased properties.
AS the amortization funds will be
managed by the board of control, on
which the city will be adequately rep
resented, their proper and conservative