New-York tribune., 1921-10-25
A Pla,, in Outline

The following is an outline Of plan
for dealing with the problem:
1-For the purpose OF the plan the
value of the several properties should
be fixed as follows:
The value of the lease of the sub
ways should be fixed by agreement
with the lessee on the basis of the
e@timated income which it will yield to
the lessee at the agreed five-cent fare
under the average operating conditions
which are likely to exist in the future
The value of the elevated lines and
s~rface lines should be fixed by agree
ment with their owners on the basis
of estimates of the income which they
will yield under the average operating
conditions which are likely to exist in
the future at the fve-cent fare-that
being the highest rate of fare which,
in view of the fve-cent fare on the sub
ways, the owners of these properties
can proftably charge, even if higher
rate were lawful. However, in no case
should such valuation be higher than
the fair reproduction cost of the prop
erty less depreciation.
1t is recognized that such estimates
of probable future income would be
difficult and would result in wide diff
ferences of opinion; but they furnish
the only correct basis for determining
the true value of the properties, and
therefore the necessary negotiations
with the owners of the properties
should proceed on that basis. While
a public service company may have a
legal right to charge fare yielding
a reasonable return on the reproduction
cost of its property, less depreciation,
yet the actual value of it's property
depends upon the income which it is
likely to yield in the future at the
rate of fare which it will be practicable
as we'll as lawful to charge.
Subway Lease Transfer
2-The lease of the subways of the
1nterborough Rapid Transit Company.
together with the other property of the
company, should be sold under fore
closure or receivers sale, free from the
lease of the Manhattan elevated lines.
and should be transferred to q new on
Grating company under a charter con-
ierrlng such powers as may be neces-
sary to carry out the entire plan. In
consideration of such transfer the new
operating company should assume or
relnstate the existing bond issue of
the lnterborough company and should
issue additional bonds or stock Ito be
exchanged for the other Indebtedness
ana stock of the Interborough COM !
pany) only to the extent of the yalue
(f1xed as above provided) of the prop !
erty transferred to the new companv
over and above the existing debts
assumed by it as part of the purchase
price. The existing lease of the Inter
borough subways should be amended to
meet the requirements of the plan.
The Manhattan elevated lines should |
be transferred to the city and leased
TO the new operating company sub
)ect to the bonded debt of the Man I
haitian Elevated Company, and addi- |
tlonal bonds or stock of the new op-
Grating company should be issued !
therefore, only to the extent Of the
value of the Manhattan Elevated Com ,
pany's properties over and above the I
Manhattan Elevated Company's bonded
debts assumed by the new operating
company.
Any surface lines which the city de-
slres the new operating company to
operate should similarly be transferred
10 the city and leased to the new op-
Grating company on the basis of their
value fixed as above provided.
S-The city should have representa-
'lon upon the board of directors of the
operating company, but it should not
'ave control. The operating company
should be managed by its own board
II directors, elected by its stockholders
'r stockholders and bondholders, sub
ect to full control by a public service
commission, whose members should be
appointed by the Governor suhiact m