The New York herald., 1922-06-27
Files Brief Asserting That
Confiscation Lies in
States Appraisal.
SURFACE LINES IMPROVE
Hedges's Economies Result in
Gain of S5OO,OOO Over Last
Years Deficit.

The Interborough Rapid Transit
Company served notice upon the Tran
sit Commission yesterday that it would
not come into the citywide plan of uni
fication and rehabilitation under GEN.
tralized control unless the ultimate
valuation placed upon I. r. T. proper
ties shall be materially in excess OF
s174,221, ,o56. which Is the original ten
tative figure recommended by the
commissions bureau of valuations.
In brief filed by counsel, ]. C. Ed
wards, the corporation reiterates its
contention that s3ss.s7s,Ss7 is a fair
and equitable appraisal. The brief
says that the recommendation Of the
commissions experts els tantamout to
recommendation that the company's
property be conascated, which looks
like an attempt to take advantage Of
the company's unfortunate temporary
financial situation, for which the man
agement is in no way responsible, but
which is due wholly to conditions
brought about by the world war"
The brief emphasizes that. whereas
the tentative unification plan announced
by the commission last September as
sures to the Interborough only per
cent return, it is to get under the
terms of the dual contract S76 per cent.
The Investing Angle.
Under these circumstances" the
paper proceeds. "the company. IN JUS
tice to its security holders, cannot ac-.
cept an unjustifiable reduction in its
original investment along with the low
rate Of return proposed by the COM
mission. especially in view Of the fact
that the evidence indicates the COM
pany's preferential will be earned dur
ing the entire period Of the contract"
Justifying the Interborough's own
valuation figures. approximating $780,
100000. the document filed by counsel
says:
The company's estimate OF cost of
reproduction based upon prices prevail
ing in March. 1922 (and prices have
risen since them and proved before the
commission, was found by applying to
the actual costs factors representing
the difference In prices between those
current when the work was done and
those prevailing in March. 1922. The
value Of the physical property so ascer-
tained is 1891, ,747. .S97. about so per cent
in dollars in excess of the original cost
Gncluding working capitaO of $214, ,942,-
064. To this has been added the pl esent
value OF the lease. assuming a cam
collation. thereof now, which has been
estimated at SIS. s.126000. resulting In a
total valuation Of approximately $400,-
100000.
How can investors be expected to
Invest their money yea- after year in
public utilities II they are obliged to
face the principle that after period
Of few years Public Service Cor,-
mission will find that their 500 in-
vested to-day in good faith is worth
only $50, SIS or $50 as the case may
be?"
Disallowance by the commission ap-
praisers of the s1.500,00o promotion
costs paid to August Belmont in financ-
ing the original subway was also criti-
cized. The brief declared that the coprts
OF the State have pronounced the trans
action a proper one.
Cuts Operating Cost ses2.0o0.
Better days appear to be just around
the corner for the Manhattan surface
trolley cars. They are beginning to
share the increasing prosperity that was
shown last week for the surface cars of
Brooklyn.
In the service and equipment inquiry
held yesterday by the Transit Commits
sion In the case of the New York Rail-
ways Company. Harry S. Fischer, a
commission statistician. testified that
Receiver Job E. Hedges for the ten
months ending Apri. 80 last had i'm
proved by more than s500,00 a deficit
for the like period of last year.
Operating revenue for the ten months
showed an actual decrease of ssS,495
as compared with the like period of last
year, but this was more than offset by
decrease in operating expenses
amounting to s6s2000.
Gen. Lincoln c. Andrews chief execu-
tive officer of the Transit Commission,
held hearing at the request of the
Board OF Estimates to take testimony
upon project Of the city authorities
70 relieve growing pedestrian and We
hicular congestion in Herald square by
removing the IL" stairways and escala-
tor as Thirty-third street and Sixth
avenue and also to rid that busy inter-
section of the pavement subway kiosks
and the stairweys leading to the Hudson
and Manhattan tubes.
Joseph A. Devery. Assistant Corpora
tion Counsel, who appeared for the city,
said II was the purpose of Borough
President Miller OF Manhattan to pro-
ceed to complete the widening Of Thirty
third street as soon as these obstruc-
tIons can be cleared. The hearing was
adjourned subject to the call of the
chair.
Washington Heights delegations ap-
peared before the Transit Commission
and petitioncd for an additional subway
station at 151st street and Broadway.
Arthur G.. Peacock, attorney for the
Interborough. opposed the plea. The
Broadway Association filed supple
mentary brief containing "recommenda-
tions for increasing the usefulness OF
Broadway by removing existing factors
that obstruct traffic and for promoting
greater mobility In It's transit. In other
words, removing street cars and sub