The New York herald., 1921-09-30


clear.
Within the past five months even the
completion of the still unfinished parts
OF the dual system has been blocked at
important points through the failure of
the Board Of Estimate and Apportion-
ment to approve pending contracts or
to vote the necessary funds.
II the existing routes were in first
class condition and functioning properly.
an intensive programme OF new subway
building should already be under way.
The present rate OF increase in the
volume of traffic carried is cxtraordi-
nary. far exceeding in proportion the
normal increase in population. During
the two years ended June 80. 1921, the
number of passengers carried on all the
lines. subway, elevated and surface, in
creased by 419,970,000 over the number
carried In 1919, or an average of 575,300
in the number carried daily.
City Unable to Help.
1t will be recalled that although in
1900 and 1902 the letting Of contracts
for the first subways was hailed as
promise OF lasting relief. the con-
gestion had become deplorable before
the lines OF the dual system were con-
tracted for in 1918. Nearly another ten
were negotiated and though the warm
ings of disaster are quite as clear, there
is total inaction. In the Judgment OF
The commission, at least $50, 100000 of
new subway work should be placed
under contract annually for the next
five years. The city, however. as mat
ters now stand is unable to devote
anything approaching this amount of
capital TO rapid transit purposes. Its
constitutional borrowing capacity, as TO
the present margin of which there ap-
pears to be much uncertainty, is bound
10 be required during the next few
years for schools and a multitude OF
ctner city needs. and cannot be drawn
upon to any large extent for SUBJ
way purposes.
The investment Of $3.50, ,ooO, 900 in the
1918 lines already made by the city is,
end will remain, a permanent charge
against the debt limit so long as the
city fails to take payment OF its interest
and sinking fund charges from the
revenues Of the roads. The way is thus
blocked to the use of further city
credit. If these charges are included.
as they should be, among the fixed
operating costs of the future system.
the city's entire investment OF a quar-
ter Of a billion dollars in the dual lines
will be released. and like sum may
be borrowed to cover the work ahead.
The commission, in one Of the separate
reports it proposes to publish in the
near future. will present a general plan
for the building Of those new lines that,
in its judgment. are Immediately re-
quircd, together with its recommended
tons as to the order in which they
should be undertaken. Before proceed
ing. however, with anything more than
the planning of lines upon paper, it viii
require the active cooperation Of the
Board Of Estimate and Apportionment.
which continues to hold the powers of
consent and appropriation in the matter
Of subway building.
Financial situation OF Companies.
The commission further finds the fol-
lowing facts:
/. That the companies. nothwithstand-
ing their savings through reductions OF
service. are still failing in an increas-
ing ratio to meet their operating and
fixed charges. Statements covering their
operations for the three years ended
June so. 1921. show the aggregate deficits
of all lines after allowance for fixed
charges and operating expense. as fol-
lows:
Year ended June 80, 1919. -. ss,572.55S
Year ended June 80, 1920. .s11, ,423.93S
Year ended June 80. 1891. .s17.122.IsS
The greater part of the increase OF
$5.69S.862 in the deficit for the fiscal
year just ended over that Of the year
before Is attributable to the advance In
wage schedules of August. 1920. which
in turn will be offset largely during the
current year by the wage reduction OF
10 per cent. agreed upon a month ago.
It will appear clearly. however, under
analysis that UP to the present time
there has been little net change in the
volume of loss resulting from ordinary
operation.
1t is to be borne In mind that the
progressive deficits shown are based
solely upon operating expense, routine
rental charges. taxes and interest on
bonds No doubt there are various
charges in the list that can be reduced
or that will disappear under n rcor-
ganized and more economical plan of
operation. The figures as they stand.
however. offer a logical starting point
in ascertaining the amount of revenue
necessary adequately to carry the
system in the future.
9. While the so-called preferential
allowances OF the Interborough and the
under the Dual Contracts had not been
earned during the year covered by the
statements referred to, they are carried
as q cumulative claim. payable from
future surplus earnings, before any
payments of interest or sinking fund
charges may be made on tho City's
share OF the dual investment
On June 90. 1921, the accumulation OF
Company unearned and unpaid prefer
entails Of this character amounted to
the following:
Interborough Company (sub-
way ntJ................... 6,06l,l5
Interborough Company (Man-
haitian Elevated accounD.... 23.646,54s
Brooklyn Rapid Transit Com
pany ........................ u,si3,f6f
a total of........... $i,coi,a0S
Until an agreement has been reached
upon a plan OF readjustment these
claims will. Of course. continue to mount
and will be counted by the companies
as contingent assets, while the cor
responding deficits of the City. paid
from taxation as the additional lines
to be placed under construction are
completed and additional bonds are
issued to pay for them, will also con-
tinue to mount.
Living by "Hand 10 Mouth"
5. In order to carry their deficits and
at the same time continue TO exist and TO
operate their lines, the companies have
been living upon a hand to mouth"
basis. subsisting in the main upon de-