The New York herald., 1922-03-21
TUESDAY. MARCH u. 1922.
Interborough and B. r. T.

The Interborough Rapid Transit
Company, the 3. II. t., the Manhat-
tan Railway Company and the Third
Avenue surface company lodged pro-
tests with the Transit Commission
yesterday against valuations named
by the commission. FRANK HEDLEy,
president and general manager of the
Interborough, says the valuation
fixed by the commission, $174,221 ,056.
falls faS short of proper allowance
and that it is not sufficient to pay par
on the outstanding bonds and notes,
leaving nothing whatever for the
stock.
There are forty different companies
involved in the reorganization project
now before the commission working
out the problem of putting the trac-
tion business of this city on a sound
basis. The attitude of the B. r. T.,
the Manhattan and the Third Avenue
company is similar to that of the
Interborough. The thirty-six other
companies will doubtless make the
same kind OF drive for a large in
crease in valuation.
The valuation of each of these forty
roads should be fair one. consistent
with the replacement plan adopted
us basis OF procedure. III the valua-
tions are not fair and not sound in
accordance with this replacement
plan, then the arrangements of the
several companies have perfect
right to protest and to submit facts
and figures with the purpose OF show
ing wherein the estimates are wrong.
1t is reasonably certain that the
Transit Commission, composed of fair
minded men, will give the INTERIOR
ough and all the other roads square
deal In the ultimate replacement ap-
praisals. And whatever the figures
are, subject to being converted into
worth while securities, they will be
very much better for bondholders and
stockholders than existing securities
under present conditions. And this
is the crux of the whole matter
For example, Mr.. HEDLEY fixes the
valuation of the Interborough at
three hundred millions of dollars.
Properties are worth the price on
which they will return fair yield,
or on which they have a prospect of
returning fair yield--no more. The
return on the securities OF the Inter-
borough for the last half dozen years
has been far, very far, from fair
return on three hundred millions
very far in fact from fair return
ON S174,221, ,056.
II isn't a question merely with the
lnterborough as to just how much
money il has invested, but rather a
question OF how much return II can
get on its investment in the city OF
New York. when the city of New
York is on record as at no other time
In its history for the five cent fare. IL
was the five cent fare. primarily, that
reelected Mayor HYLAS last fall by
more than four hundred thousand,
and 1t is not within the scope Of
sound business judgment to look for
ward to anything higher than a five
cent fare In the long years ahead.
In this situation and with no prob
ability of operating costs ever get
ting down to pre-war costs, the hard
sense thing for the Interborough
management to do is to consider not
what il ought to get out OF its in
vcstment but what II can get out OF
IFS investment in the way Of income
II II continues to operate its roads
as II is now operating them.
II the management finds that there
Is nothing but poor pickings ahead,
operated as the roads arc now oper.
ated. obviously the best thing for the
interborough Is to work In with the
transit Commission and help to work
out the best thing for itself as we'll
as the best thing for the city or New
York. And what is true OF the Inter
borough in this respect Is equally
rue of the r. r. r.. and all the other
roads. The present transit plan Of
fers the transit companies Of New
York chance to escape with their
shirts on.