The New York herald., 1921-10-02
TRANSIT PLAN CUTS
TAXES $12,O0O,O00
Burden Now Borne by City
Would Be Shifted Back to
the Companies.
BELIEVED LEGALLY SOUND
Hylan-Hearst Court Fight OF
stockholders Contests Not
Regarded as Serious.

Ql uCu 10 tJCA lOuss
Coincident with the announcement
yesterday of more than $425.000, 900
increase in tax assessments, with the
prospect of an increase in the tax
rate Of from twenty to forty points.
analysis of the Transit Commissions
plan for readjustment of New York
city street railways revealed that sue
cessful application of that plan would
cut s12.000,000 from the city's taxes.
amounting to a reduction of about
twelve points in the tax rate.
That is a by-product of the transit
plan for which the commission has
claimed no credit and in which it is
not interested as any part )f its OBJ
jective. 1t is an unearned increment
from which every buyer OF food and
clothes and payer of rents in the city
would benefit.
The sl2,0o0,000 reduction would re-
suit from the proposal Of the COM
mission to place the transit companies
upon a financial footing whereby they
can pay their taxes and the interest
upon the citys new subway construc-
ton bonds.
Taxpayers Now Pay Interest.
OF the foregoing amount 100000
il represented by interest upon the ci:y's
investment of $3.50. 900 in new SUBJ
ways. That interest upon the citys
bonds would be paid by the earnings OF
the transit companies IL the earnings
were sufficient. but burdened with their
present excessive operating and fixed
charges the companies have found 1t i'm
possible to meet the city bond interest
charges. AS a result the city admins
ton Is compelled 20 call upon the tax
payers to pay the interest
That interest, as included in the bud
get for 1921. amounted to ss.soo.ooo. 1t
is expected that in next years budget 1t
will exceed s10.000.000.
The tax charges against the transit
companies for the last quarter Of last
year amounted to s1.721.672.42. or at a
rate Of ss.Ss6.6ss.6s a year. Certain
charges not included in the foregoing
figures would bring the total for next
year easily to s7.ooo,ooo It was learned.
The commissions readJustment plan.
through exemption of new securities
from taxation and absolute municipali-
zation of ownership OF the transit lines.
II was estimated, would lop. perhaps as
much as $4,000, 900 from the transit COM
panies tax bill.
The argument was advanced. there
fore. that the tax saving through pay
ment of interest from transit revenues
would be cut in half. In contradiction
of that view, however. II was pointed out
that the transit companies do not actu-
ally pay any taxes at all. The city sends
the companies its bills, so to speak. and
the companies reply that they are sorry
but they have no money.
s5.OOO,OOo on Tax Bills.
Therefore. il was made clear. that.
since the Transit Commissions plan
would enable the companies to pay their
taxes. the s5.ooo.ooo knocked off their
tar bills by the Transit Commission
would represent no loss whatever to the
taxpayers. but. on the other hand, the
companies would be enabled TO pay the
remaining s2.ooo.ooo.
The savings through municipal owner
shin. whereby the transit companies
would be enabled to meet their tax
charges and the interest on the city
bonds. are planned to be suggested by
two principal means. One OF these Is
squeezing the water out OF transit
valuations. thus reducing fixed charges.
The other ia BY economy In operation.
n has been known for months that
the Transit Commission has been at
work upon arriving at new valuations.
II was discovered yesterday that the
commission also Is making an intensive
investigation OF methods OF operation
Tor the purpose OF ascertaining where
reductions In operating expenses may be
resllzed: TO determine the utility OF par
,icvlar hauls. and 10 arrive at a FEAST
hle nlan for reRrouping existing lines
into new routes and systems which
would serve the public better and at the
same timc bring more revenue to the
proposed nav commission.
THE commission is applying such an
examination just now, particularly TO
the Broowiyn surface lines. which lines
have suffered most from disintegration
and whose patronage has suffered most
from the resultant abolition OF free
transfer points.
In that connection the transit com.
mission asks the indulgence and coop
GRAFTON of the travelling pubic
The commission has placed inspectors
ON the cars of the Brooklyn surface lines
10 observe the volume and trend OF
traffic. In the effort to arrive at an accu-
rate estimate Of the situation those ex-
aminers are instructed TO ask passengers
where they boarded cars, what their des-
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