The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-02-01

surface lines can be permanently main
tained and developed by tho operating
companies without an assurance OF suf-
facient earnings to justify the investment
OF the additional capital that will from
time to time necessarily DO required to
keep up with the increasing demands of
the traffic OF the city"
What the war did to the Interborough
Is graphically shown by the following:
This country entered the world war
In 1917. For the three years ended
the net corporate income Of the Inter-
borough was:
's ~ ~
!Sid... ..............>........ S.1lSSz6.m
I0iI... oscoosoooso<
AS compared with those figures. note
what happened in the three years next
thereafter
1919 ipeficitl. ................... 3.eIo.ssea2
1870 (DeficS).. 1880 .SSoo
That was what happened. notwith-
standing the fact that the number Of
passengers carried In 1915 was 647.37s,-
ace. whereas In 1920 the passengers
transported over the Interborough COM
pany's lines aggregated s56,1SS,1l0.
Par.lysins City's Credit.
Mr.. Hedley considers one Of the most
unfortunate phases OF the recent situa-
tion the paraiyzing effect It has upon
the city's credit.
with the rapidly increasing compile
ton OF the dual subway system" said
the Interborough's president and gem
eral manager. THE city will have made
an investment OF about $25o.00o, 900 in
rapid transit. InAsmuch. however, as
this $3.50, 100000. owing to an inade-
quate fare, In giving the city no return,
Il IL a frozen credit Not having II
LIQUID for immediate use, new funds
must come from taxation. But taxation
has already mounted TO a point which
would make any further increase det-
ff'nent 70 Industry rather than q stirnu-
liant. - -
TThe city can build no more subways
It would have to borrow the money to
build them. and the debt limit prevents.
It has neither the credit nor the cash
subways. sufficient 20 make them self
supporting. would not only put the city
Of New York In a position to get new
capital. but II would also make It pos
sible for private capital to be enlisted
for the same ends.
New facilities, becoming In turn self
supporting. not only would remove m
annual charge OF about el3.000.000 from
the tax budget but would also render
available $25o.ooo.ooo further credit for
the city to use In subway development
or in schoolhouss construction. court.
house or hospital construction. improve
ments Of streets and numerous other
public uses.
Because the subways are not self
supporting there 10 an absolute halt In
| transit expansion. The city IL now at
least ten years behind In a subway
building programme. The city 10 grow
ing every day. Congestion already IL al
most unendurable. The only relief II
more subways. but you cannot even hope
to get moro subways on a-five cent fare
while our groes revenues from the
subways increased - per cent In the
operating expenses have increased 1875
per cent Increased costs have moro
than eaten UP the Increased revenues
Our payroll IL now about $4,000. 900 q
year. The rate OF pay Of our employees
In moro than double what Il was at the
time We entered intn>thc contract with
the city for the construction and opera.
ton OF the enlarged subway system on
the basis Of a flve cent fare WAGES
alone are more than 81 per cent OF all
our expenses and the possibility Of
W.. because we have wage contracts rum
ming with our employees right up to 1922
Take one more Item. At the time
we entered Into the subway contracts
with the city for the enlarged system
we we're buying coal at less than Ss.2s
ton. delivered. Now the freight and
lighterage on coal alone amounts TO
sa.so ton. and we use more than
1000 tons day. Coal absorbs more
tran IL per cent. Of our total operating
costs. and the freight and lighterage on
coal alone are now $1,000 q day more
than the entire coal bill was formerly.
OF course. we will never get our ma
ter'als and supplies for nothing. but
even wero they given to us the COM
pany would still be losing money at a
Tremendously heavy rata on q ave cent
fare.
The company now Inns used up all
liz reserver both Of money and ma
terial In meeting previous crises we
have exhausted all our emergency re-
sources. The last to 90 was our real
estate. useful daring construction. but
no longer needed for operation. That
was nuctioned at a sacrifice. The In
vestorr whose savings went to help
hu'id tho subways have lost more than
500, 100000 IN the shrinkaec OF their
sccuritiess II IL by the consideration Of
our creditors. whose interest IN our lines
lies In our continued soivency. that we
have managed to survive until the pres
ent tim. with the very best OF will
they cannot walt forevN
osst.e'.s 70 CITY r<sssssso~.
II IL prevalent rnisapprehere.,on
Mr.. Hediey said. that In case OF the
ynterborourh 0ofnr into thu hands ~ m
receiver. the city could take back and
operate, the subways itself. I'm that
event" said he. the subways would
70 20 the bondhoiders for operation un-
der the contract so long az the OPP
orator pays the rent the city has no
right to take over the subways until
ten years after the beginning Of the
contract pcyiod. or eight years from,
now. And. even then. the city would
have to reimburse the Interborough for
the millions Of dollars that company