The New York herald., 1921-10-03
WAY seen TO THAW
CITY'S S25O,OOO,OOO
Credit Can Be Released if
Court Approves Tran
sit Plan.
NEW SUBWAYS NEEDED
Schools and Piers Not to Be
Sighted by Cut in Debt
Limit.
NEW SUBWAYS NEEDED

The Transit Commissions plan for
readjustment OF New York city street
railroads holds promise OF releasing
quickly the $3.50, 900 900 city credit now
tied up in subway bonds which do not
support themselves. it was learned
yesterday. Persons familiar with the
commissions plans say it will be un-
necessary to wait until the operation
OF the commissions plan actually be-
gins before the interest on the city's
bonds can be paid.
AS soon as the commission is able
to convince the Federal court that it
has established a basis which will
guarantee the payment of interest. it
is expected that the court would be
willing to authorize the issuance Of
whatever bonds are needed for further
subway construction and other public
improvements OF permanent nature
Needs Money for New Tubes.
The commission regards the release
of the city's credit as perhaps the most
vital portion of its programme, for the
reason that only through the availabil-
ity OF money from that source is it pos
sible to build more subways. The COM
mission has stated that additional rapid
transit facilities are the most important
needs of the city's transportation sys-
TENS. The fact is that there are not
enough facilities to carry the people to
and from work.
The seriousness of that situation is
made apparent from figures quoted in
the commissions report, which says:
In 1918 there were 32S.000, 900 car
miles operated for the accommodation
OF less than 2,o00.000.000 passengers
During the year just passed. with $780,
oO0,O0O passengers to be carried. the car
mileage has risen only to $4,000. 900.
In other words. the facilities within a
period of three years have been in
creased only per cent. while the traffic
increased 25 per cent"
To relieve this condition, the conrnis-
sion proposes to put under contract $780,
ocO,o0O worth of new subway construc-
ton annually for the next FIVE years
The commission is understood to feel
that the money from released credit
VIII be available easily by the time the
proposed subway contracts are ready to
be financed. In any event, If the pay
ments of interest on the citys bonds
has not actually begun by that time
the commission stands ready to ask for
release of credit on its showing that
the new scheme OF financing and oper-
alton provides an absolute guarantee
Of the bond intercst
Incidentally, it Is expected that the
commission will be ready to put its
first new subway contracts In effect
within a year. Tho commission is pre-
pairing q statement to the public to tell
the routing and kind OF new subways
1t proposes TO build.
No Sacrifice of schools.
The commission is said to feel that
the availability OF the present frozen
credits" is imperative. because it recog-
nizes that to draw on the present linz
tied and much controverted debt limit
could be done only at the sacrifice of
new schools. new piers and a multi
tude of other city needs.
The commission is determined that the
success or its plan shall not be at the
suffering of other public necessarles.
leave the present debt limit free to BE-
used for other than rapid transit i'm
provements.
The commission likewise expects 20
end the present hand to mouth" exist
erce Of the transit companies, not By an
increased fare at the expense OF the rid
ing public. but by compelling economies
which the companies have been unable or
unwilling TO undertake.
The commission has found that virtu-
ally the only economy" inausurated by
the transit companies in recent years
has been reduction of service in the face
of increasing traffic. with the exception
of the recent cut Of 10 per cent. In
wages amounting to a total OF some
s6.o00,000 or $7.o00,0o0 year.
The companies have made their reve-
nues go as far as possible through put
ting off payment OF current bills TO the
last possible minute and by deferring
other payments indefinitely. That pol
Icy. the Transit Commission has learned.
has resulted in such n wholesale post
ponement OF current repairs to properties
and so general a lack OF provision for
new structure, equipment and facilities.
that the commission believes II would
take s25, 600. 900 to put the facilities OF
the transit lines in proper condition.
Tho largest economy which the Tran
sit Commission expects to put into effect
probably will be the elimination of
"watered" valuations and intercompany
leases. The extent OF that saving can
not be estimated until the commission
has completed its valuation os the lines
It proposes that the city should take
over.
In addition there would be numerous
subsidiary economies whose total is OK
pected 60 be substantial THE New
YORK HERALD showed yesterday that
the readustment probably would result
In p saving OF approximately SC0o,00o
in taxes to the companies. Tho pro-
posal Of the commission 20 merge the
power furnishing facilities would bring
another big reduction IN expenses. Cen
tralizatlon of administration through
Is expected to result In
savings both In rentals Of buildings and
IN the number Of high sa'aried officials.
Rescue OF bankrupt companies from the
hands OF receivers would represent an
other saving. Centralized purchase OF
supplies Is another item, and the com
mission expects 20 find room for econo-
mics also in actual operation OF the
ftstaa ~ tt-htch Ia f,,oLff,D