The New York herald., 1921-10-14
Consinasd from First Page.

city authorities and placed in the exclu-
sive control OF the commission by the
transit act under which the commission
is operating. That much we owe to MIN!
If the people can but be made to un-
derstand they will know how to repay
the debt"
In his summary of his objections and
suggestions to the Transit Commissions
plan hIr. Untermyer took up first the
question of the proposed barometer
fund.- and five cent fare. as follows
IT most emphatically protest against
the provision for a barometer or sliding
scale OF fare that will furnish a per-
petual guaranty for the payment OF the
principal Of the bonds that are TO be Is
sued FOR the properties. thus creating at
the expense OF the fare payers of the
city the, highest grade bond anywhere
extant to-day. not excepting United
States Government bonds, with an as
sured Interest return of per cent. and
a possible return of 6 u per cent per
annum.
my contention is that the plan should
on the contrary absolutely limit the fare
TO cents, and that II that Involves
temporary deficits (Which the commis-
sion does not anticipate and to which 1
agree) they shall be provided Tor as
hereinafter explained"
His explanation of how the five. cent
fare should be guaranteed was this:
"If as thus reorganlzed raccoroing to
the Transit COMMISSIONS plans with
Untermyer modifications) the mainten-
ance of five cent fare involves tenn
porary deficits in operation (Which as
before stated | do not believe and the
commission tells us 1t does not believe
will happen under anything like decent
management under a drastic reorganiza-
ton that will reject the chaff and re-
tain the substance, no matter whose
toes may be trodden on) 1t would De
BY far fairer in that very remote event
to have the city temporarily advance
the money to meet any such deffcits,
b,rt on a prior lien security to be amor
tizad and repaid out Of future profits
before the purchase money bonds are
retired. than to Leave room for the pos
ability OF at any time increasing fares.
But II the unexpected and well nign
in,poa sible should happen at the begin
nlnS and the roads did not even pay
thefr expenses II would be wiser and
MORE lust to have the city loan. not
give. the difference. taking for these
advan ces q lien ahead OF everything
else ard on a par only with the ponds
that thu city should receive for expendl-
lures fov future subway extensions anu
for the ;Srrears of taxes owning H.
IJnVeTmyer
..there IS no justice or wisdom IN placing
the burden of increased fares on the
users of the system. That burden
should be distributed among the entire
body of tax payers to whom the uitimate
advantage will come"
AS tho pri,,r lien bonds on which tee
money would be loaned to cover a five
cent fare def cit would unquestionabiy
earn their iLvsrest." he said. they
should be READILY salable in norma.
times on their u1erits without piedgtng
the city's credit, and would not affect
the debt limit" He said also that a
sliding or baron npeter increase in fare
would be fundamentally wrong. be-
carse under its operation II would be
$50 much easier 10 raise fares than to
practise economie.T' that 1t would be
an actual incentives to inefficiency and
extravaganza.
Mr.. Untermye1ss Objections.
In summarizing other objections and
suggestions Mr.. Unite rznyer said:
"I object to the sur rgested method OF
securing future invest uents by the city
for extensions (estimated at S250.o00,-
COO at the rate Of $685. 20, 900 per year,.
The proposal to place the security for
such payments In DC cSition even less
ADVANTAGEOUS than the bonds that are
to be issued for the pro pc rites. or even
to place thcm alongside oc and on par
with the purchase money bonds, con-
slider grossly inequitable.
This new money shoul be represent
ed by a prior lien bond ahead OF the
purchase money bonds an,s ahead OF the
bonds of the same class that should be
issued to the city for its present invest
rnent Of S2a3.ooo,0 900 in tive city owned
subways.
ssThe accrued taxes Of over s1a.2o0.-
900 now past due and alE taxes that
may be imposed before the plan takes
effect. all OF which the commission pro-
poses to cancel and forgive. should be
paid and funded in prior lien bonds.
"They are now liens ahead. of all the
securities on these proper ties Inc
roads can be forced to pay them. The
properties may be sold free apd clear of
those liens IL they are not paid. Why
should they be cancelled? ". as the
Dian seems to contemplate, physical
value of the property is to tse a basis
ard the security holders are to get
guaranteed bond, and their da mage and
tort claims are to be provided for (as
they certainly should be. in Aull. even
of the expense of the bonds u neces-
sary), what, pray. are they sacrificing
10 enttle them to secure the cancella-
ton Of the u3.s00.00o Of tax liens that
are ahead OF them?
'If II be said that the s233,000.0oG
subway debt, which now ranks subject
10 the 5000 900. 900 bonds held by private
investors is to rank equally with such
bonds In the plan. my answer is--thank
you-for nothing. II all the bonds arc
10 be guaranteed by this barometer fare
and paid for by the travelling public by
increased fares, 1t does not concern the
security holders how many bonds otner
than theirs are issued. or to whom or
what are their relative priorities.
'T object that the S233,0oo.oO0 which
the city now has invested in its subways
that arc to be turned over to "a COM
pany and to bc subjected to the lien Of
the bonds to be issued for the properties.
is not 10 bo likewise evidenced by the
pbysical issue and delivery OF bonds to