The New York herald., 1921-10-02
TRANSIT PLAN CUTS
TAXES $12,OOO,OO0
Continued from First Page.

continued from FtfSt rage.
tinations are, how often and where they
must change cars, and show how much
additional fare they are required to pay
in comparison with the old fare for iden-
teal hauls.
The commission desires that the public
cooperate by giving that information
completely and cheerfuIly, particularly
since such information will serve to
bring about better and cheaper trans
portation facilities for travellers.
In the face of the declaration of the
Hylan administration. through John p.
OBrien. Corporation Counsel, and the
Hearst newspapers. that it would con-
tinue its court fight against the COM
missions plan, the commission, it was
learned, is not disturbed. The commits
sion feels. in fact, that it has nothing to
fear from litigation.
The city's original litigation. challeng-
ing the validity of the act under which
the commission was created, now is be-
fore the Court # Appeals and will come
up for argumen; in December. In arriv-
ing before that tribunal. the law, with
all the Hylan arguments against 1t, has
been submitted to the scrutiny of eight
judges, all of whom have sustained the
validity of the act.
The commission is understood to feel
doubly reassured because the Appellate
Division, in Its opinion favorable to the
commission, virtually said that the Court
of Appeals already has upheld the tran
sit act by virtue of the fact that the
act was drafted upon decisions Of that
court.
In regard to the threat of the city to
carry it's case to the United States Su-
preme Court, the commission displayed
no alarm. 1t Is believed to be the ex-
pectation Of the commission that the
State court will not authorize an appeal
to the United States Supreme Court. In
event such an appeal should be made
possible. however, there Is reason to be-
lieve that the commission would move
for a dismissal on the ground that the
high Federal court repeatedly has set q
precedent Of leaving the determination
of State constitutional questions to the
determination of State courts.
Position of Stockholders.
1t is pointed out that there is no
ground upon which stockholders Of ex-
listing transit companies can move in
the courts against the commission unless
act against. such stockholders, which, 1t
is reasonable to expect, the commission
will avoid assiduously.
However, stockholders might conceiv-
by bringing suit against each other in
event of failure to agree upon a course.
In that connection it was regarded that
the usual course of allowing a two
thirds majority of the stockholders to
prevail would be followed instead of
resorting to litigation.
Stockholders of existing companies, II
was stated, have no option except to
come into the commissions plan, or to
stay out and take the consequences of
what powers the commission chooses
and Is able to exercise.
The only comment so far adverse to
the commissions report has come from
adherents to the Hylan administration,
who concede frankly that they would be
opposed to any proposal the commission
might make. 1t Is understood that on
the whole the commission feels very
comfortable over criticisms advanced
thus far.
No statements have been made by off,
ceivers in charge of bankrupt companies.
1t was reported yesterday that some Of
the companies are disposed to make no
comment until the Transit Commissions
valuation figures are made public.
1t was not believed that such course
of silence would be possible, however.
since the commission proposes to call
company officials to the witness stand
in public hearings by the middle of this
month for the specific purpose Of ascer-
tanning their attitude toward the COM
missions plan.
Bonus for Employees.
A feature of the plan which has
aroused considerable favorable comment,
especially among the operating personnel
Of the roads. is the proposal to establish
what amounts to an efficiency bonus or
u maximum Of 3 per cent. of total cap
itaIization to be paid out OF surplus
earnings as long as FIVE cent fare is
sustained. That bonus or efficiency
reward, would be divided equally be-
tween the bondholders and the operating
personnel. The employees would re-
ceive their share OF such profits through
cash payments, pensions. insurance or
other medium yet to be determined,
Should earnings prove sufficient TO
TenuCc the IdIt. tutTc WOulu De "
three-way split Of surplus earnings. the
public coming In for the third share i'm
the shape of the reduced fare. The
maximum OF additional payments out
OF earnings would increase by ! per
cent for each cents reduction In fare.
In that connection the commission has
been informed that there has been some
public Misrepresentation as to the
sequence Of disbursements OF revenue.
The commissions report indicates
that disbursements would take place in
the following order:
I. Operating expenses.
g. Interest and sinking fund charges
on new securities and the city's invest
ment. those being on parity in the
disbursement.
2. Depreciation and maintenance
reserve.
4. Barometer fund. which would de-
termine the rate Of fare.
5. The variable payment out OF
surplus earnings to bondholders and
operating personnel.