The New York herald., 1922-02-21
Enormous Shrinkage Rep
resents 40 P. c. Off of
Companies Claims.
STRONG REPLY TO MAYOR
Hearings Begin March 6 Pre-
liminary to Making Plans
to Unity Systems.

The Transit Commission received
and made public yesterday the report
of it's bureau of valuation. The report
recommends the total figure of $780,
6S0,154 as the net valuation, exclusive
of the city's present investment, to be
placed on the properties of the forty
transit companies proposed for in
clusion in the commissions plan for
Tie reorganization, unification and
municipalization of the New York city
railway systems.
Present capitalization Of all those
transit companies. including stocks
and bonds of every description now
outstanding. aggregates approxi-
mately 81 900, 100000. From that total,
however. the commissions bureau OF
valuation has excluded various COM
pany holdings, bringing the par values
of the actual securities held by the
public down to S765,000 900. The
valuation of the same properties by
TIE companies themselves. as carried
on their books and irrespective OF Sc
curty issues, aggregates s79l,0o0,ooo.
The report of the bureau of valua-
ton recommends, therefore, reduc-
ton Of $500. 100000, OF about 40 per
cent. OF the present net capitalization,
and of sSo6000,000 below the total
company book values. 1t is thus the
experts employed to appraise these
properties propose to redeem the
Transit Commissions pledge to
squeeze out the water before turn
ing over to municipal ownership the
city's railway facilities.
Four Appraisal Methods Used.
-Four different methods of valuation
OF the properties were employed snd the
results of each were embodied in the
voluminous report filed. The recon-
mendation of the bureau of valuation.
however. is that final valuation be
based upon original costs. from which
is to be deducted the various amounts
Of expenditure necessary now to put
each property in first class operating
condition. The other three methods and
tie results they yield are:
OTlElndl tOSl Ol tit RpiOptItit5, it9S
straight line" depreciation, $425,360,-
1i5.
s. Cost to reproduce at pre-wa- prices
r91o-191D. less depreciation, $437724.-
3l3.
4. Cost to reproduce at prices OF the
first half of 1921. less depreciation,
s571.04s.271.
The bureau of valuation recommends
the basis of original cost less the
sl.A
properties in first class operating con-
dition, on the ground that the other
three bases represent theoretical cost
values rather than the actual expendi-
lures that were required to produce the
properties actually in use to-day.
This recommendation. IL adopted. will
mean that the companies will be allowed
In the proposed new issue of securities
the equivalent of expenditures actually
made in producing the existing proper
ties, but no more. and that from this
will be deducted the amount necessary
at present prices to put the properties
in shape for efficient service to the
public.
n. II. II. Suffers a Heavy Cut.
Study of the appended table, which is
printed herewith, reveals that in. the
scaling down process of revaluation the
p. r. r. system (now in the hands OF
a rcceiver), including the Brooklyn City
Railway Company, suffers a cut Of
sa3.3s2.601 below the book values OF the
properties carried.
The Tnterborough system. with only
s3.o00.o00 more than the II. r. T. In
outstanding stocks and bonds, fares far
Z better. The appraised value of its prop
ertics is placed at only s31.S24.322 less
than fha r2rria1 fta hon1<c
These book values. however. being ex-
elusive OF the valuations of the Man
haitian elevated and OF the surface lines
OF the New York Railways Company
both Of which the Interborough leases.
are about $4,000, 900 less than the book
values the B. r. T. places on its prop
critics.
The Manhattan a." with capitaliza-
tion OF s105,1o9.439 and book value OF
$4,000, 900. is scaled down nearly so
per cent. to s57.374,205.
The surface lines Of Manhattan. espo.
cally the New, York Railways system.
including the Eighth Ninth and the
Madison avenue (Ncw York and Her-
lem) lines are hit hard. The New York
Railways system. which also is in a
receivers hands has $50. .S2i Topped
off from its book valuations. on lines
capitalized at s95,G67.1S9 the appraisal
is placed at s2p.S71.7s5 only. This
rigorous process OF shrinknGe appears
TO be the Transit Commissions answer
TO Mayor HyIans oft reiterated charge
that lot Of useless surface car lins
Junk was to be foistcd upon the city at
an exorbitant price"
In addition TO the four sets Of valua-
Ion figures already embodied in the
report there is to he prepared fifth
set showing the estimated future earn
ing capacity Of each OF the railroads
concerned, upon the basis OF the five cent
fare and present conditions OF manage
nent and operation. The Transit act
Continued ON Page six.
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