The New York herald., 1922-03-11
Way Sought to Forestall
Double Fare in Split Of
Three Lines.
DIVIDENDS TO BE SAVED
First Breach in the 900 Year
Lease Will Be Withholding
of S2,1OO,OOO.

Ine lnI6rDOTOuSn RAPID iIdHSll
Company has taken a step which may
result in a complete Severance of
operating arrangements and corpo-
rate divorce from the Manhattan Ele-
waited Railroad Company, which for
twenty years has been operated by
the Interborough under 999 year
lease.
After months of fruitless effort to
persuade the Manhattan owners to
modify the terms of the lease which
has been found too oppressive finan-
cial burden the lnterborough has
made what is understood to be final
proposition--in fact, an ultimatum.
Accompanying this proposal was a
plain statement that whether the
Manhattan accepted or rejected the
proffer, the Interborough positively is
through paying per cent. annual in
terest, which is the guaranteed rental
charge under the lease, on $60,000,000
Manhattan stock.
~2,1OO,OOO to BE Passed March 81.
On March 81 will fall due the interest
dar year. Under the terms of the lease
the lessee company has ninety days
grace after payments fall due before
legal steps may be taken by the lessor
TO enforce payment.
Interest has not yet been paid, how
ever. for the final quarter of last year
and the ninety day allowance for that
settlement will expire on March 81. The
two quarterly claims. aggreeatiag six
months interest. which then win be due
The Manhattan company will amount to
$2,100.00O. The Interborough company
has no Intention. the Manhattan COM
pany has been informed. of paying any
part of the claim.
The final proposition for the cancel
lation of the lease at the instance of the
1nterborough management, a proposition
10 which the Manhattan has shown no
signs of asserting as yet. Is couched sub
stantially in these terms:
The Manhattan Il" owners are to
agree to cancel the lease. relieving the
lnterborough thereby of an Improbable
appendage for the maintenance of which
dividends as rental under the lease,
$1,000, 900 annual interest on the bonds
and s1,s00,0 900 yearly taxes. These
figures aggregate $7,600,000 as a prospec-
tive yearly saving.
The Interborough thereupon Is to re-
store all the old original elevated lines
TO the exclusive management and OPP
Grafton of the Manhattan company at a
valuation of $4,000, 900. which Is to in
clude also transfer to the Manhattan of
all elevated line power houses and third
tracking express facilities which were
financed with Interborough money, the
Manhattan to pay interest to the Inter-
borough on the s30.000,000 valuation
and to provide for a sinking fund for
the ultimate liquidation of the debt
This proposal, should Il be ratified,
would leave In the hands of the Inter-
borough S17.000,000 worth of extensions,
constructed and now operated by the
lnterborough In connection with its ele-
waited railroad division. II the lease be
abrogated It is contemplated that the
marlborough shall continue to operate
these extensions as part Of its own
service.
Lines Would BE Broken.
Therein lies the contingency OF para
mount public Importance to hundreds OF
thousands of city travellers. After these
companies have severed contractual re-
lations as lessor and lessee continuous
ride over any one of the old Manhattan
elevated lines interlocking with any one
of the Interborough's newer extensions
thereto will be possible only under either
n dual fare or a joint rate adjustment
approved by the Transit Commission
under the provisions OF the State rail-
road laws.
The Transit Commission knew OF this
proposal for a cancellation of the lease
as soon as IL was made some weeks ago
10 Alfred Skitt. president of the Man
haitian Elevated Railroad Company. +.
II was to meet just such a contingency
that the Transit Commission, with Gov.
Miller's approval framed one of the
transit act amendments now pending in
the Legislatures Committee on Rules.
That amendment so enlarges the powers
OF the State Transit Commission that IL
may stili compel the operation of
through service, as at present, even
though a system, by the cancellation OF
lease, be cut up into component parts.
Two roads thus operating an inter-
locking route might be compelled by the
commission to continue through service
Mt the nickel fare, dividing the resultant
operating revenue, provided only 1t could
not be proved that the nickel fare re-
striction In such a case would be con-
fscatory
Three Important Links to BE Kept
Most important among the several
Interborough extensions now operating
IN close relation with Manhattan service
but whose control would be retained by
the 1nterborough under the proposed
terms OF separation are these:
On the Third avenue IL the extension
built from che Fordham road station via
Webster avenue to Gun Hill road and
Continued on Page Six.
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