The New York herald., 1922-03-21
TRAP SEEN TOSMASH
TRANSITPLAN in BILL
NOW BEFORE MILLER
/. r. L. Counsel Tells Board
Albany Measure Will Kill
Proposed Bond Issue.
ENDS IT'S RATE POWER
Would Give Mayor Bigger
Lever to Block Plans OF
Reorganization.
ALL ROADS FIGHT VALUES
Forty Call Figures Given by
Experts Absurdly Low and
Confiscatory.
ALL ROADS FIGHT VALUES

without a dissenting voice the own
ers of the forty or more city transpor-
tation companies yesterday entered In
the record their rejection of the tenta-
tive valuations placed upon their prop
critics by tie expert appraisers Of the
Transit Commissions bureau of valu-
ations.
Some repudiated the figures simply
on the ground that they "are absurdly
low" Others challenged as unfair,
confscatory and unconstitutional the
process used in estimating the valua-
tons
Still others, among which the Brook
lyn Rapid Transit and the other Brook
lyn companies were conspicuous.
seemingly scorned the whole proposed
plan of unification and rehabilitation
worked out by the commission and in.
timated rather plainly that they
wanted none of 1t and only asked to
be let alone
All this was not at all cheering to
the commission. But 1t was James l.
Quackenbush. general counsel to the
Interborough Rapid Transit Company.
who in the last ten minutes of the all
day session tossed into the commits
sion's trenches q. hand grenade which.
II not alarmingly destructive, proved
at least disconcerting. He expressed a
belief as an experienced lawyer that in
fostering one of the transit amendments
which were rushed through the Legis-
+ lature on the final day of the session
the commission itself had supplied the
rock upon which it's whole ambitious
plan Is likely to be smashed.
HedIcy Writes Objections.
This disclosure by Mr.. Quackenbush
Illuminated the basis on which Frank
Hedley. writing in behalf of the Inter-
borough. and also the sponsors for other
corporations, had questioned the validity
of the new bonds proposed to be issued
in exchange for the old securities in
the projected unified and municipalized
system. Mr.. Hedley In his letter to
the commission, after having con-
demned as far too low the tentative
valuations placed alike upon the prop
critics OF the old. original subway and
those constructed under the dual con-
tracts. added:
This company is advised by counsel
the proposed new bonds unless and un-
til their validity shall have been sus-
tanned by the Supreme Court of the
United States. This point is made es-
pecially important in view of the am
nounced purpose of the city officials TO
contest to the court of last resort the
validity of such securities"
Just what THIS meant was made clear
when Mr.. Quackenbush very late in the
afternoon session said:
II do not know whether the bill (the
S.mpson-Jesse transit amendment bill)
has yet been signed by the Governor
but feel that / ought at this time to
oall the attention of the commission and
its counsel to what looks 10 me like
the probability of a very serious further
cicud resting upon your proposed new
securities as a result of the amendment
which passed the Legislature.
1T is my opinion that. Willingly or
unwittingly. the Legislature ras walked
into trap. The representatives of tho
city who have been here pointing out
objections TO Section 40 of the Transit
Act have placed them on the ground
that the companies would be free, IL they
cid not want to 20 into the plan under
Section 106, to apply for an increase Of
rates and be Independent of the commits
sion. Acting upon that suggestion. the
Legislature has seen At to take from this
commission It's power generally over
rates, and has limited that power to
cases only coming under the plan. under
Section 106.
Flexible Fare Idea I'm Peril.
II think you will find that the Legis-
lature thereby has deprived the commits
sion of the power Of sovereignty over
rates-thc so-called police power-which
cnly has been sustained by the Supreme
Court of the United States "a something
that a commission may do against the
objection of city administration.
fear you have put In the hands of the
city administration the power TO block
anything you may undertake. to do in
the way of raising rates under your
automatically operating barometric fund
tho flexible fare idea--on the theory
that you will not be sitting In the ex-
crcise OF the police power Of the State,
but as contracting agents. which con-
tractual power belongs with the Board
of Estimate and which has been taken
from them. as they contend. IN violation
CT their proprietary rights"
Pointing out that the sole guarantee
underlying the projected new issue oi
securities to be exchanged for the old
depends upon the unquestioned validity
OF the barometric fund operating auto
matically to provide the interest upon
the new bonds, Mr.. Quackenbush con.
tinued:
II believe that II the Governor ap.
proves that bill In its present form, you
will have doubt cast upon your securi.
ties and much litigation forced upon
you by an antagonistic city admInistra-
ton. That Is my own opinion"
Chairman McAneny said the commits
sion, as result OF Its own examna-
tions and advice. was not prepared tc
share Mr.. Quackenbushs fears.
well" retorted the Interborougt
counsel then you will not complain