The New York herald., 1921-12-15
OTTO h. KAHN FINDS
TRANSIT PLEA FAIR
Continued from First Page.

Continued from First Page.
tion toward the scheme shall have been
shown in actual practice TO be henevo-
lent one. He will be from Missouri he
will want to be shown"
Unless the property of such investors
be "earmarlSed under the law" Mr..
Kahn insisted, thus fnsuring to them
retention to their clear title, there can
be no way to force them to- relinquish-
ment
"Investors want Safety
"The owners Of traction securities
have become very much chastened,"
said Mr.. Kahn. They are not looking
for fat dividends or coupons any more
They want safety, a reasonable return
and that is all they want. Now. when
ever the time comes when you can show
them you can give them that and a
sound sleep at night without waking
/ in the morning to And their investment
! deprecated, think they will jump at
/ IT, In the meanwhile. until you can con-
/ vince them of that. II Is perfectly
feasible to go ahead with the principle
| Of your plan, keeping the priorities alNe
/ until you can deal with them"
His third main point, the witness
! said was the problem of providing the
money for the rehabilitation. equipment
and Improvement OF the unified and SYM
metrical system, which Mr. Shearn esti-
! mated at an absolute minimum OF $oV-
! 10000 This could not be done, Mr..
! Kahn thought. by the creation OF new
bond issues, for the reasons already in
dicated. One possible way would be to
use frankly the credit Of the city. But. "
tha tx,itv
reluctant to take that way"
The other feasible way and the one
he seemed to favor was to leave to the
existing security holders the raising of
the new capital. tina asmuch as 1t is man
ifestly In their own interest to put their
properties in such shape that they can
be economically and efficiently admins
tered"
Mr.. Shearn asked If 1t would not be
reasonable to request existing bondhold-
ers to help furnish the working capital
by clipping off one or two interest cou-
pons foregoing their interest. and hold
ing the coupon with their Hen as secur-
ity. Because of his position as trustee
for his fellow bondholdsrs, Mr.. Kahn
begged to be excused from answering
the question specifically. He did say.
however that it would be perfectly
| feasible thing. Whether ii is a PROPOSE
ton which the security holders would
wish to accept he did not think he ought
to attempt to Judge. Speaking for him
self as security holder, he would give
very sympathetic consideration to any
| fair concession he might be asked to
make"
Mr.. Kahn agreed with Dwight w.
Morrow of j. p. Morgan & Co, that the
city should have due representation in
management and control of the traction
situation. He said he found no horrors
in that prospect
1--WE are living in a democracy" said
! Mr. Kahn, "and 1t seems to me funda-
mentally wrong to say anybody Is afraid
to have important properties put par
|, TALLY under public and partially under
private authority. The more our public
authorities learn in the way of running
important properties. of how business is
conducted, the better 1t is all around.
attach no Importance whatever TO the
criticism which / believe has been made
here. / should not be afraid OF politics
| dominating your board Of control as
projected. I think 1t is workable and
fair. 1 see no reason why politics
should creep in, but II it were to be
feared, l say. Well, you have got TO
| face 1t anyhow and test it."
Mr.. Kahn heartily approved the elm
| nation of stock speculation from the
| local transit field. OF the proposed uni
| fication of control of the eighty differ
ent companies he said he thought ii In
dispensable and also that 1t ought to
effect considerable economies. Munici-
pal ownership as a prerequisite of a
common fare and of pooled earnings he
regarded as plainly inevitable.
Replying to Chairman McAneny's as
| sertion concerning the raising of work
ing capital that the bonds which the
| commission proposes to create would
be guaranteed by the operation of the
| system" Mr.. Kahn said.
They would be a natural operating
charge, but the operation of the system
involves uncertainties which no man can
| foretudge exactly-whether II should be-
| come necessary to raise the fare. for in
! stance, or whether earnings should fall
| Off to an extent to jeopardize the fixed
charges and the sinking fund.-
I'VE do not expect" said Mr.. Nc
| Aneny, amy initial expense or any run
ming expense that requires temporary
| financing particularly out Of the ordinary
or OF a nature that will not readily be
| met out of operating returns. and we
have no idea that any such temporary
need would affect the fare question. We
hope that through the general operation
of the plan in its other features. the faro
question may remain undisturbed."
DisIiIxes Barometer Fund.
Coz.uo Il, tIvo.-x- .-iao -.~.td.nt -