The New York herald., 1921-09-30
CAR RIDERS TOPAY
ONLY FOR SERVICE
Continued from First Page.

Continued from First Page.
Der chosen by vote of the other
Eix. The board of control will con-
stitute the directorate OF "A" com
pany, and finally would acquire all
the present functions Of the Transit
Commission except those involving
exercise OF police power. to witch
the Public Service Commission
would succeed on abolition of the
Transit Commission at the end OF
its usefulness.
Valuation TO lie Fixed.
The city will acquire the transit
lines. not already owned = t, on
a valuation which the commission
will fix. and without outlay on the
city's part through an arrange
ment whereby the earnings of the
lines will pay for their purchase.
The present subway leases are to
be reformed or superseded by
agreement go as to abolish all
preferential payments and place
the company and city investments
on parity. The ownership OF all
subway equipment not already
owned by the city would be vested
in the city without outlay by the
! city in return for a new lease.
Under the reformed subway
leases the properties comprising
+, the three proposed operating
groups would be assigned and
transferred TO "A" Company in
exchange for "A" Company bonds
In amount equal to the valuation
OF the properties fixed by the
commission. That is TO be
achieved "by agreement" if possi-
BILE. but If not, then otherwise to
be determined by the Transit
Commission"-possibly by fore
closure.
The three groups of properties
would then be leased to their re-
spective operating companies, "B."
"C'' and 3D."
"A" Company would provide suffi.
eient funds for financing the unified
System and to provide working capita
for the early period of it's operation
through the sale OF short term securi
ties. The bonds to be exchanged fol
the properties would be secured BY &
purchase money mortgage on the
properties acquired and the company's
interest in the leases to the operating
companies.
Water Automatically Squeezed.
The foregoing plan would automati-
cally squeeze the water" out of pres
ent securities by substituting for them
new securities based upon the actual
value of the properties. Also the plan
would eliminate all intercompany leases
such as the Interborough's lease OF the
Manhattan elevated lines. To all OF
these proposed changes there is ex-
pected to be much objection from tran
cit financial interests. The report indi-
Gates that the commission has in mind
way to enforce its decision II II can
not be done by agreement, but does moi
indicate what that course will be. ~
In case the city should object to the
commissions plan the commission Is
specific about its course as follows:
III the city authorities shall oppose
municipal ownership of the
transit system, with its present oppor-
tunity TO reform completely the existing
situation, the commission Is prepared 70
the alternative course of vest
ing title TO all properties not now owned
By the city. including the subway leases,
in the Consolidated Company CA" Com
pany). with provision for deferred own
ershfp by the city. Such course will
permit the general features OF the plan
to be carried out, but will add to the
difficulties and will tend to impose a
higher fare
The means whereby the commission
proposes that tho rate of fare shall fix
itself automatically in the future is
unique. That Is to be accomplished
by means of a contingent reserve or
Barometer" fund, which is to be cre-
ated by the surplus moneys. after the
payment or operating expenses and
fixed charges. II the available surplus
keeps this fund above a specified maxi
mum the fare will be lowered automati-
cally. while IL the fund falls below the
specified maximum the fare Is increased
automatically until the reserve is re-
stored. The commission proposes tc
start with a five cent fare as the basis
For example:
IL the normal amount OF the "barom-
cter" fund were fixed at $4,000, 600
With fare of five cents. and at the end
cf the year 1t were discovered that the
surplus hat increased the fund to s35.-
100000 th fare would decrease. on
the other md. should ii appear at the
end OF thu year that the barometer
fund had itllen to. say. $4,000, 900, the
fare would automatically go up until the
Increased revenue had restored the fund
TO the normal figure of $4,000, 900.
Money to Go for Service.
The commission comments:
I'm short, the purpose OF this is. after
FIXING the base of proper valuation and
determining the operating expenses and
fixed charges. to make the decision as tc
the rate of fare as automatic as Is
humanity possible. Upon the new basis
Cincludirg the board OF control upor
which the city is represented) the public
can be assured that ALL money expended
IS properly expended for necessary cost
and the rate of fare. therefore. win re.
fleet the actual necessary cost OF the
transportation that the public gets, un.
influenced by any opportunity of pri-
' ate gain based upon stock ownership
Another unique feature Is provision
FOR an efficiency fund TO be created
q fter all other payments and equal to
per cent. interest on the a. company
bonds. That fund Is 90 bo disbursed on