New-York tribune., 1921-09-30
Traction System
Is Recommended in ReDort

-'AAe1Su " AeOpO1 I
revenues of the operating companicx
after payment of their own operatinc .
expenses, will have sole charge of the
issuing OF all securities, will make all
payments for interest. and haye the
custody and management Of the smor-
tizatlon, contingent reserve and other
funds,
The functions of the Transit Commits
sion IN respect to construction should
be vested in the board of control. and
from time to time, as experience war
rants. all the remaining functions of
the Transit Commission, except those
involving exercise of the police power.
to which the Public Service Commission
will succeed, should be vested in the
board of control, permitting the abo-
lition of the Transit Commission. Leris-
lation to this end will be recommended
by the commission
To provide for the eventual consoli-
dation into one operating company. the
board of control will have the power,
after specified number of years, to
consolidate further the groups and
operating companies provided for under
this plan into one or two operating
companies, as it may deem best.
- AHcy pC HCCSu uot Ouiy JUdt CntS
control differs from past methods, in
that it is placed where it can be exer-
cised most efficiently and economically,
but that the city's participation is
placed on an equality with that of the
private investors, giving the city for
the first time real and substantially
complete home rule with respect to
| transit.
Expenses of Board of Control
If. as expected under the plan, self sh
and antagonistic interests are elimi-
mated, and the interests of the city
and the company investors made COM
mon, it should be possible TO have a
large part of the detail work now done
by the staff of the Transit Commits
sion performed by the stats of the
operating companies, and thus cut
down the large force of public en-
ployees necessary under present con-
dtions. In view of the base of the
investors being common, the expenses
of the board of control should be
treated as an operating expense and
paid out of railroad earnings.
The operating management of 3D."
&c" and ed" companies shall be vested
in their respective boards of directors
under the terms of their leases. The
board of directors of "B" Company
shall be elected by the holders of the
bonds issued in exchange for the Sc
curities and properties constituting
Group No. l. Similarly, the directors
of "C' and "D" companies will be
elected by the holders of the bonds is
sued in exchange for the securities and
properties constituting Group No. 2
and Group No. 8. respectively. Man
agement will thus represent invest
ment instead of speculation.
Mechanism of Transfer
The present subway leases to be re-
| formed or superseded by agreement, SO
as to abolish all preferential payments
and place company and city invest
nents on a parity. Ownership of all
subway equipment not already owned
by the city to be vested in the city
without outlay by the city in return
| for new lease
The reformed subway leases, com
prising the Interborough system, to-
gether with the lines constituting the
Manhattan Elevated Railroad system
to be assigned and transferred, with
the consent of stockholders, OR, failing
that, by means of foreclosure sale, to
"a" Company in exchange for "a
Company bends, equal in amount to the
valuation of the properties of the In
i terborough and Manhattan companies,
made by the Transit Commission pur
| suant to Chapters 1874 and 335 of the
j Laws of 1921.
These bonds to be exchanged for
outstanding securities issued against
/ the properties transferred on terms to
be fixed in the final statutory plan and
| contract, reached if possible by agree
ment between protective committees of
security holders, but otherwise to be
! determined by the Transit Commits
sion.
Pursuant to the terms of the final
statutory plan and contract, "a" Com
pany will forthwith, by appropriate in
strument, vest in the city all of its
right, title and interest in and to the
properties acquired, in return for a
lease of the properties transferred,
comprising Group No l, to "B" Com
pany for operation, under the general
terms hereinafter stated.
The bonds of "a" Company, issued
in exchange for the properties trans
ferred to it and by it vested in the
l. city, shall be secured by a purchase
money mortgage which shall be spe-
cifc lien upon the properties transferred
and a general lien upon all of the
property of "a" Company, including its
interest in the leases to the operating
companies. These bonds shall bear in
terest at the rate of per cent per
annum, with an additional 1 per cent set
aside to amortize the valuation as fixed
by the Transit Commission. The bonds
will be further secured by provision in
the final statutory plan and contract
for the maintenance of a rate of fare
automatically determined to meet at
all times cost Of operation. bond in
terest and 1 per cent for amortization.
Under conditions hereinafter stated,
in order to provide an incentive to eff
cient and economical management It
will be possible for the bonds to earn
an additional I u per cent Of interest
In similar manner the lines now or
formerly comprising the Brooklyn
Rapid Transit system, surface, subway
and elevated (and, if it is finally
deemed best, the surface lines in
Queens and Richmond), will be trans
ferred to "a" Company in exchange
for it's bonds, equal in amount TO the
valuation Of said properties, as deter
mined by the Transit Commission,
which properties shall be by "a" Com
pahy vested in the city in return for
lease to &C" operating company upon
terms similar to those provided in the
case of "B" Company.
In a similar manner the lines now