New-York tribune., 1921-12-14
Expert
Backs Transit
Boards Plan
ID. W. Morrow Explains Ben
efits in Reorganization
of Lines and Discounts
Political Rule Criticism
Dividend Warning in IA
Shonts Urged to Conserve
Surplus; Need Barred for
Flexible Fare Provision

Dwight w. Morrow, member of ].
P. Morgan e. Co., which represents the
largest group Of holders of INTERIOR
ough Rapid Transit Company s per
cent bonds, yesterday approved in gem
eral principle the plan of the Transit
Commission for reorganization of
New York's traction lines.
Further light on the warnings from
the Interborough's bankers against
the payment of "fat" dividends in
clean" years also was shed by Mr.. Nor
row and by Arthur M. Anderson, in
charge of the Morgan bond department,
at Yesterdays hearing before the
Transit Commission.
Both testified that as early as the
fall of 1914 the Morgan house had
urged theodore T. Shonts, formerly
president of the 1nterborough, to con-
serve surplus and restrict dividends
and had refused to participate in So
curity adjustments leading to the mer-
ger, OF the lnterborough Metropolitan
with the 1nterborough Consolidated
holding company of the |. r. IT, now in
the hands of receiver.
Admonitions Are Disregarded
In spite of these admonitions.
touched on in part at previous hear
ings and made more striking yesterday
the Interborough directors continued
the distributions which Clarence j.
Shearn, special counsel of the commits
sion, said resulted in "the till being
scraped clean"
Coming on top of the adverse criti-
fIS Sn1 nf ftxye. L
given their ideas to the commission.
the comment of Mr.. Morrow on the plan
was the significant feature of yester-
days hearing. The Morgan partner
spoke from the viewpoint of the in
vestor. although he said his opinion
was not to be taken as an expression
of the bondholders committee, of which
Mr.. Morgan is chairman. Final ap-
prevail of the plan by the security
holding public generally, he thought,
would depend to q large extent upon
the valuations which the commission
has yet to announce.
81 feel that the general aim of the
+; commission to vest the title of these
properties in the city and to work out
by joint representation method of
operation by which private ownership
and the city can run the lines, instead
OF standing off in two hostile camps
criticizing each other, is a highly de-
sirable goal" said Mr.. Morrow, in sum
ming up his comment 81 hope it will
be reached"
Morrow Analyses Proposal
Mr.. Morrow said he did not alto
gether hold the view of those who have
criticized the proposed board of control
as an avenue leading to possible politi-
cal domination of the city's transporta-
tion system. The system must depend,
he admitted, on human beings who
might be apt to err, whether working
for the city or for themselves.
"But | do not share the fears to the
extent they have been expressed of a
mixed city and private operation" said
Mr.. Morrow. 81 think almost all inno-
| vations fail to accomplish the good their
proponents have in mind and fail to
accomplish the harm their opponents
have in mind. 1t is going to depend
not only upon the machinery as you
set it out on paper, but upon the char
acter of the men that you get to run it.
1t is personnel rather than formula
that will bring success"
In support of the merit of mixed
management, Mr.. Morrow referred to
the success of the Federal Reserve
Bank, composed of three representa-
tives of the government and six of the
stockholder banks.
'They work together because they
n<iu slr