The New York herald., 1921-10-16
UNIERMYER SHOWS
fare PLAN IS LEGAL
Court OF Appeals Cited in
Combating McAneny's
Chief Objections.
LEAVES NO OBSTACLE
Ii City Can Lend $3.50. .000,-
900 for New Tubes 1t Can
Operate Going Ones.
WAY OPEN FOR JUST PLAN
Transit Board Orders Trip
Tests Of Lines to Get Facts
on Traffic.
LEAVES NO OBSTACLE
WAY OPEN FOR JUST PLAN


samuel rntermyer yesterday replied
70 the criticisms OF his transit plan
offered by George aIc-Aaeny. chairman
OF the Transit Commission, who held
that Mr. Untermyer's basic suggestion
that return upon the actual value
Of the transit properties to make good
deficits in operation was open TO Sc
l1ous constitutional objection, if not
economically unsound.
Mr.. Cnter-nyer SAID that before de-
iivering his criticism of the Transit
Commissions plan at the City Club
Thursday night hc had given full con-
s'deration to every constitutional
aspect o. his alternative suggestion,
! s-ld that there are no legal objections
thereto. In this contention Mr.. Inter
raycr says he is supported by Louis
Marshall his associate, and in this
connection points out that Chairman
ArcAneny is not a lawyer.
IL the city is without power 10 guar
antec tho transit company against
operating deficits in return for the
maintenance Of Ave cent fare, Ar.
CnterInyer questions its authority to
lend sa5o,ooo, 900, which represents the
clty's share of the new subways.
Open Discussion Beneficial.
Referring to Mr.. McAneny's srGses-
tion OF constitutional defects IN his
sugeostiors NI-. Unternye- said
''The advantages of open discussion
become more and more manifest as
we proceed.
There are no constitutional or legal
gested by me, and with all due resnect
70 AIr. McAneny there IS no doubt what
ever OF the legality OF each and cv-
cry feature OF the plan have sug-
gested- All such doubt was settled long
ago In the Adrila, Realty Company
case in the Court OF Appeals IN which
and the prescn. special counsel FOR
the Commission participated on the
sarlc side. II we had taen succeeded
fas we should liave) in tho same con-
tention that AIR. Mc!Ancnv now makes
the city would have saved the se33.-
100000 that it now has invested IN
tho subvays, the payment OF whic,,
rhe Con,fnisslon now proposes TO Sc
cure BY possible inarea sed fares to b.
loaded on the backs of the users Of
the system.
'.Afr. aicAneny Is. as we al know.
man OF fine intelligence, but he is not
2 lawyer. 1t would be interesting 70
learn the identity OF the lawyer who
VIII stand spoIsor for Mr.. McAneny's
constitutional objections Mr.. Loui-
Marshall, who u recognized through
out the country az ono oc the great
tst Il not the greatest constitutional
lawyer IN America. is in full accord
With me that there ia nothing what
ever in either of the two objections"
Mr.. Cntertlyer in his statement dealt
tlrst with Mr. srcAneny's suggestion that
the city vas without power to guarantee
the transit companies against loss
through dcfcits II. operation, as con
'enlp'a.cd in his suggestions.
A Question of ssCity Purpose"
The statement issued Dy Mr.. Cnter-
nIyer follows in part:
1T is said that the city has no power
70 guarantee 10 lend the new transit
company the money with vsl.ci to make
good any deficits in operation, in that
Improbable event. which no one contem-
plates. I repeat ATr. McAnen-'s words /:
Vale provision for transit Sc a
city purpose. it seems Gear that the
city - prohibited frorn guaranteeing
interest upon the securities TO be is-
sued in payment for the properties.
Assume that statement or the law 10
be corrcct--vhicl II Is not---l have made
no such propositicu or anything Ike it.
am not suggesting that The city lend
the money to make GOOD any part Of the
snteress on bonds 10 be given for the
property or on any other bonds. Moth
'-s Is further from my thought Ny
proposal Is 10 maze good only possible
deficits from operation. which everybody
ssrees are not likely 70 occur Does
Nr. McAneny surgest that the operation
Of tho systean r. not a city purpose?
II the city h2s 10 constitutional power
ID mako good thc.e deficits in operat-
INK It's own property whe-o docs Il get
i'4t authority under Tho commissions 3
alan TO lend the $50. .oDo0o0 10 build new
rsbwsys? II one IS for "a city purpose
surely the other Is much more fo Keep
i.s IN operation The roads already bull.
~ making temporary loans 10 naect
oci!cits IN the operation OF tho c.tys
own subways would appear 70 tho aver
se mind very much more like % c,ty
lrr1osc within tho inca ming OF the Con-
@.tuton tlan lending the money 10
b4ld new sub rays.
"If that "a tho best objection that the
commission can urge for It's failurc 20
r.. forti n plan g,arantccing q cent
fare tho situation begins 70 look very
hopeful. Ar. McAncny has apparently
piauuccrstood that par; Of my plan.
II that position Is persisted n by tho
eornniiasio1 undertake to ovcrw.ielm s.
iti legal authority 10 the contrary.
~ note also that In answer 70 my o..
iection TO the plan that. unli;e The p-es-
cltt rsiiway securily hoidera who re1
lS,..- Tor their properties. the city rs 70
rccnivc no bonds either for rs present
Or future Investment. and - accordingly
70 have no vote, thus giving The entire
..s.er 10 tho railway security holders on
t..s.- bonds, Mr.. IcAneny suggests that:
This Same constitutional prov!-
sion would prohibit tho city from
taking OF holding bonds OF the con-
soiidatcd company us representing
its Investment in the subwaya'
Surrey that cannot be seriously
meant. ~ & sScro put forth by anybody
80 whose absolute coed faith and intel
;eciual Integrity md sincerity had icas
confidence. would characterize ss Ga
frivolous beyond argument and icnve x
~. that Surcly roooay could have given
my such advice!
Cfty's Tower 10 Lend Money.