The New York herald., 1921-09-17
TO OSQUEEZE OUT ALL
WATER REORGANlZE
Unity TRANSIT Lines
Plans Of Commission In
clude a Clean Sweep of
Tangled Finances of
Roads,
AIM AT ACTUAL VALUE
Decision, Made After Six
Months of Study, Not
Likely to Affect Five
Cent Fares.
BLOW AT HYLAN CHARGES
Big Roar From Financial In
terests Expected in Clearing
so Years of Wild Deal
ings. Some Scandalous.'
BLOW AT HYLAN CHARGES

report of the Transit Commits
sion, which now is expected to be
made public early next week, will
show that the plan for reorganiza-
tion and unification of the city's
transit systems will include a clean
sweep of the tangled financial condi.
tion and overcapitalization of the
companies, it was learned yesterday.
The commission purposes, it is un-
derstood, to put the companies back
upon basis Of valuation at what the
properties are actually worth, and
to eliminate the large amount OF
"watered" stock and other excessive
valuations which are said to exist.
No governmental action touching
the transit companies ever under.
taken here, it Is believed, brought
such protest as will this move. The
commission is expecting a storm.
but it is known also that the body
is committed thoroughly to the plan
and is determined to execute it.
In fact, it was ascertained yester.
day that the forthcoming report is
to be solely for the purpose OF in.
forming the public of the commits.
sion's intentions and not for laying
open any part of the plan to contro.
versy. For six months the commits
sion has been studying the New York
transit situation. finally has made up
its mind about what should be done
to remedy conditions and intends to
carry, out its plans unchanged, THE
NEw YORK HERALD is informed.
Fares on Fair Basis.
There is no time now to bubble
over details" is the attitude of the
Transit Commission, according TO an
authority believed to be familiar
with the plan.
It was learned that the commission
is not greatly concerned over
whether the fare shall remain at 5
cents. go up to G or Z, or conceivably
drop to cents. The commission is
understood to take the position that
when the fundamental couulrions
underlying the transit situation are
reduced to a firm, fair foundation
the rate of fare will take care OF
ftself-in other words. that when a
just and reasonable basis OF valua.
tion is reached fair return would
be determined upon that basis. 1t
was regarded as likely, however. that
an analysis Of the commissions plans
would show the rate OF fare would
not exceed cents.
1t Is understood TO be the purpose to
put the transit companies on a foot
ing so that they may obtain a profit
able return upon fare that is reason
able and just 70 the riding public. and
TO safeguard that footing 20 that
financial manipulations to disturb II
would not be possible.
That plan, it was ascertained. viii
involve the stupcndous task OF Clean
LIS ~ TIC lutSo llldL mas resulted
from fifty years OF wild financial 1eai-
ings, some OF whicn have no. been
short Of scandalous." While ii was not
admitted that anybody would s.iefcr In
such cleanup in the long -un. |,
vas conceded readily that there will
be roaring outcry from transit fnan-
cial intcreets when the plan Is made
pubic.
Agree on Utica Decision.
Though the decision and opinion OF
the Public Service Commission Il: re-
fusng TO grant an Increased rate OF faro
TO the Utica street car lines are known
70 have been arrived at and promulgated
without consultation with The Transit
Commission II was generally regarded
yesterday that the Views OF the two
commissions did not vary greatly Upon
the following point in the Public Service
Commissions opinion:
Public utilities. just as other depart.
rlents OF business. must expect 10 cope
with periods Of depression and short
earnings, Just as at other times they
enjoy periods OF prosperity and full divi.
dends. IL the public Is expected TO mako
up every ucticiency IN order 10 give
utility good round rate OF earning
power. then the public is entitled 10 tho
benefit Of the surplus over the agreed
earning rate in times OF prosperity"
II was regarded as altogether certain
hat the Transit Commission would agree
with the Public Service Commission
that the period has passed when the
transit companies may seek higher rates
of fare on the plea OF high costs OF labor
and materials.
There was reason TO believe also that
n .iong the disappointed when III re.
port is made public will be tho l-lan
a administration. which has made polit nj
capital of Gov. Millers creation OF tsa
Transit Commission by charging tha.
the purpose was TO order higher car
fares. IL is expected that tho I port
',s' nri~ win show that v Y no, ~,