New-York tribune., 1921-10-11
Open Opposition to Conn
missions Program Is
Expected Next " eek at
Hearings on Valuation
To Call Garrison.
He'd ges and Hedley
Board Working for One
Big System, With City
Ownership in Ten Wears

lnamations were received by the
Transit Commission yesterday that the
subway, elevated and surface lines are
preparing to join in opposing the com
missions plan for a reorganization Of
the systems.
Neither Frank Hedley. president Of
the Interborough; Job Z. Hedges, re-
ceiver for the New York City Railways
Company, nor Lindley NJ. Garrison, re-
ceiver for the B. r. T.. would indicate
what their attitude would be toward
the commissions intention to unity
them under municipal ownership 1t
was learned that these officials would
be among the first to be called as wit
nesses when the commission begins It's
hearings next week to detcrmin inc what
valuations shall be put on the prop
critics.
The commission has been informed
thai the opposition Will develop when
efforts are made to arrive a. fair valu-
ations The valuations Will represent
what the bondholders and stockholders
of the present companies will receive,
either in funds or new securities, when
the properties are reorganized. The
commissions purpose is to institute
municipal ownership of all the lines
unified into one big system, with five
idly as possible, and then, perhaps in
the course of ten years, to supplant
private operation by municipal opera
ton.
"street railway officials have been
studying the commissions plan dill
gently without being able to .compre
bend how it is to be carried into ef-
feet" said ar official of one of the
companies yesterday eve have pre-
ferred to keep an open mind on the
subject. But the truth is the plan is
a puzzle to me- The Interborough. for
instance, has kept up a campaign Of
education for more than two years to
show that it is not possible to operate
prohtab on a. Scent fare. Last year
the deficit Of all the lines aggregated
$17,000,000 Next year q like sum will
be added to that amount. Now comes
the commission with an argument that
5 cents can be made to yield prof t.
II they can do it they can do more than
we can
Expect Intimidation
"Another question that perp!cXes us
is, How can the commission compel us
to give you our vested rights, such as
franchises and contracts, if we done
want to? The only answer is that they
can intimidate us into obeying their
will, and the only way they can in
timidate US is to hamper us with the
authority they have until we give in
out Of sheer hopelessness."
The opinion of the commission is
that whatever opposition develops Will
impinge on the question of valuation
Various methods OF arriving at valua-
ton are known in the traction busi-
ness. These include determining tie
replacement cost, estimating the valua-
alton on the earning power and con
siderlng the original inyes tment. Most
Of these methods already have been
discarded by the commission, because
the replacement cost OF line which
has become obsolete would not rep
resent 3 fair valuation; neither could
the earning power nor the original in
vestment be taken as criterion, for
If 2 line was not earning any profit
its equipment would be valueless and
the original investment would be az
fected by depreciation Of equipment
The law under which the commission
was created gives it wide discretion,
but stipuates that the valuation must
be arrived at with due regard for
estimated prospective earnings
VIII Get Water Ont
1t was stated at the commission $
office yesterday that Governor Millera
principle that watered stock must be
squeezed ont will be consistently ad-
hered to. Determining what is and
what is not watered stock is expected
to develop some of the opposition.
The members OF the commission said
ycste rday that the order of procedure
of the public hearings, which are to
be held at 10 Lafayette Street. had not
yet been arranged The hearings will
begin next Tuesday or Wednesday.