The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-03-06
Fight Will Come Up at Albany Today
Before Legislatures Judiciary
Committee.
(ay The Associated Press) !.

NEW YORK, Mar. Tine IHSt rear
hand -to-hand battle over Governor
Miller's program for state-controll-
cd traction system for New York. city
will be fought on capitol hin In Al
bany tomorrow when the legislatures
judiciary committee will hold hear
ing on bill, now pending, designed
TO empower a state public service
commission 10 allow traction compa-
MES TO increase fares over five cents.
The argument probably will hinge
on whether a state can constitutional
IL intervene and alter a contract be-
tween a city government and traction
companies even In the presence Of eX-
tenuating circumstances, on which the
larguments of proponents of the Dill
/will be based.
The fight over how 10 furnish trans
portation for this citys 100000 In
habitants with an additional floating
population estimated at 100000 which
changes daily, has been smouldering
for more than three years. IL had i'm
cipient possibilities soon after Amer
lea entered the war. when rising prices
brought subway and elevated compa-
MES here TO claim they were not mak~
ing money on the five-cent fare stipu-
lated in the 49-year contracts between
them and the public service commits
sion, entered into in 1913.
Throughout these years the city,
which under the state law held pow
err OF approval Of contracts between
traction companies and the pubic
service commission, has been commit
ted to the policy of five cent fare.
regardless OF whether the roads We're
making money. The policy was to
al he Aaf{ rtf GO ht favafiOn In
der that the riding public might have
cheap fares.
The bill now pending provides for
the appointment by the governor of a
state public service commission with
power to investigate traction problems
and to fix rates OF fare, regardless OF
policies of local municipal govern
ments, IL the economic situation i'm
volved warrants a change OF fare.
on this point the protagonists and
antagonists OF the bill will lock
horns"
A dramatic element viii be added
by the appearance of United States
Senator Hiram w. Johnson, of Cali
Ifornia who has been retained by the
New York City adiministrati ton to fight
the bill. ~
IL was understood today he would
base his Arguments on the unconstitu-
tionality OF state interference with
contracts between municipalities and
traction companies.
Proponents OF tho BILL on the other
hand, II Is understood, will argue on
the advantages to the city of altering
the contracts and on the fact that
the present contracts We're made with
the public service commission, state
col Of he
New York City board of estimate.
They will distinguish between power
OF approval and power of veto and
inaction".
They with further argue, friends of
the bin said today, four main points
in the New York state constitution, as
follows!
THAT the city is an agency of the
state;
2l-That the police power of the city
ultimately resides in the state legisla-
ture and has not been waived by that
body;
3-That rate-making is an exercise
OF police power;
4-That any exercise of any police
power by an agency OF the state is
reviewable by the state.
Proponents of the bill claim that
these points of the state constitution
have been upheld in numerous cases
not only by state courts but by the SUI
preme court of the United States,
over period of more than so years.
The only new point raised in revi-
sion OF the contracts now in force is
whether a state can disregard fare
contracts by a city when the city has
invested capital I'm the. roads in ques-
ton. At the time thesd contracts We're
contaminated the city of New York
borrowed, SO 900, 900 to invest in con-
struction of new lines Those favoring
the bill, however claim that this point
tdoes not change fundamentally the
states power in rate-mal<ing.
The contracts now in force stipulat-
ed that the city build new lines which
the companies agreed 10 equip and OPP
sfate. dividing profits equally between
the city and companies, after GER
tain specified sums were set aside for
operation expenses. sinking funds and
amortization of the lines. Through
this amortization process Ii was
agreed that the city should come into
fun possession of the lines at the ex-
plration of the contracts. Now the
companies claim the lines are not
making enough money to put aside
these sums, that the amortization is a
dead letter In the contract and that
millions OF dollars must be taken
from taxation to pay interest on the
$3.50. 900 the, city borrowed TO build
the extensions 20 the lines.
New lines are sorely needed now
companies claim. and neither they nor
the city has money to build them. To
increase tho fare, they claim. wiz en-
able the city TO release it's $3.50, 900. 0O0
for construction OF new lines, which
VIII encourage the population to
fnread out. increase the city's debt
INIT and reduce taxes and rents more
than enough to offset the increase in
fare to the riding public.