The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-02-01
Hedley Produces Figures
and Facts to Justify
Gov. Miller's Plans.
TAXES MILLION SHORT
Experts Quoted to Show
Bankruptcy Stares
Roads in Face.
CITY's CREDIT Is FROZEN
Railway Head Would Cause
City's Investment in Sub
ways to Be Productive.

Clty'S luVcSJmcuJ HI Oup~
ways to Be Productive.
Municipal rapid transit IL gfievously
Ill.
What Gov. Miller has advocated.
friends Of his proposed legislation say.
is primarily a careful prcgnosts OF the
malady by competent authority.
Whatever may have been the cause
or causes OF the ailment. whatever
course Of remedial treatment may be
prescribed ultimately. they contend.
there can be no harm in giving TO the
public an Intelligent understanding OF
the perfectly obvious symptoms.
The patients friends areue that he
IL suffering from acute malnuttition.
that there 10 an insufficient quota OF
red corpuscies. and that he must sink
Into chronic invalidism unless he re-
ceives q generous infusion Of incteased
income or new capital.
His critics insist that his condition
Is and for years has been. dropsica'.
I'VE must squeeze out tho water be-
fore he can become healthy" they
shout.
without engaging In theoretic con-
troversy, what are the concrete condi-
tons which any Intelligent layman
may detect without the use either OF
clinical thermometer. stethoscope or
x-ray photography!
The whole great B. n r. system. ~
everybody knows, 10 bankrupt ana IN
the hands OF q receiver. 80 Ia the New
York railways systsm. which comprises
the major part OF AfAnhattan's surface
rail transit "a Utilities. And the Inter-
borough Rapid Transit Company q
drifting rapidly toward the sArne goal.
The figures which are herewith APP
pended in support Of that assertion were
furnished yesterday to TIE NEW York
HERALD by Frank Hediey. precedent and
general manager Of the lntorborough.
ana J. L. Quackenbush, its general coun-
sci. They are figures which are certi-
fled to the Public Service Commission
Of tho State a accurate.
MIG Deacis In rrefsrentials.
The rnterborough's fiscal year ends on
June 80. On that date OF 1870 the audit
sheets showed that the company. m
Guiding both the subway division ana
the Manhattan division, the latter being
the old Manhattan elevated railroad syn
tenn, had Jointly failed BY the sum OF
tf%.lo7.BS2 to earn It's company and city
prefercntials. OF that deficit the Sub
way vision was charged with $751;
ts2. and the Manhattan division Of the
system with ts.s7s.spo.
survey for the six months that
have fntervened since the niing OF the
1920 report---namely. from June 10. 1870,
down to December 81. 1S30--shows that
In THE respect there has been no I'M
provement In conditions. The amount
by which the Interboroush during that
elk months period has failed to earn
and meet its preferentiais II ts.ss0.sss.
Should the same ratio Be maintained Tor
the current six months period down TO
next June, therefore, the shortage, will
have mounted to more than $l7s0oO.00o
Taking tho month OF December. 1890.
alone, the most recent available nRures
suggest that the disproportion between
InterborouRf income and outgo 70 becon-
Ing more accentunted. The audit sheet
for that month shows. ~ compared with
the corresponding period OF the pre-
vious year. a decrease In net operating
revenue amounting to esSoss.s7. Here
10 the explanation: Though the month
showed an increase OF S,76O.sf3 In the
number Of passengers carried ~ COM
pared with December. 1919. and an In
crease In gross operating revenue
Amounting to $aii.so3ss. the systems
operating expenses for the same month
OF 1870 had Increased by $s7s.sos.ss.
thus cutting down the net operating
revenue to q figure Ss4. 0ss.37 less than
that for December. 1913.
In Default Of rsxes eH.osOseeO.
At the present time tho lnterborough.
Its responsible officers say. u not earn
ing enough to meet its operating costs.
Of amortization. interest on Its out.
standing $35.0o0.o0o OF capital stock.
sinking fund and city preferential re-
auiremcntE. On November Is last. Mr.
Hediey sdmits the company was In de-
fault for taxes IN the sum OF 1850. 900.
Taking the Manhattan division alone
as a separate entity. Il appears that the
elevated system IL falling short by about
$4,000, 900 annually OF receipts sufficient
to enable II to meet It's operating ex-
penses. maintenance interest. taxes. &c.
The New York Railways system. now
In receivership. according to a recent
statement by It's accounting department
to Job Hedges. receiver. IL running be-
EtnQ. lu OCAa0ttE0 tHtCEr.k uIFcU In oOtiuo
and other charges. At q rate Of more
than t3.000.0o0 a year. Its accrued la
bility for taxes. paving and tax penalties
on December 81 last amounted 10
s3.22s.001.15. The surface roads. accord
Ing To Mr.. Hedley. are now taking IN Just
about sufficient receipts 10 meet actual
operating costs and current taxes and to
provide an imperfect maintenance.
In his annual report OF the INTERIOR
oueh Rapid Transit Company for the
year ending June 80 last Mr.. Hcdlcy
said:
The operations OF the last fiscal year
demon strate that even the subway It.
self with AL NJ its congestion. cannot
en- q Ave cent fare earn the interest and
sinkirx fund on the bonds and notes
irsued for It's construction and equip
mcnt. While the net corporate income
during the last yrar was s2.ssoa53T5
In excess OF nxed charges. u would have
70 be moro than double this amount "a
pay interest and sinking furd on other
moneys invested, including approximate.
" 500 0o0, 900 by the city. The iAtter's
total debt for new subways amounts %
between 1900. 100000 and $3.50. 0on. 600
ana n constantly increns sting. No
interest IA being received on this vast
sum. although n could easily be earned
and taxes be lessencd by between ga.
ooo.o 900 and $4,000 900 per nnnum by
advancing tho rate % FARE sufficiently 10
covrr the actual cost Of service There
~ no warrant for putting this added
burden on tho taxpayer andsthcve 10 no