New-York tribune., 1922-06-07
Expert UP.holds
Cost Estimate
Of'L'Company
Burpee Says Manhattan
Properly May Include
Sub-Surface Work i'm the
Figures on Relocation
Differs With I.R.T Il. Values
Insists Lines Would Show
S2.404.000 Profit Under
Old Managers i'm 1921

The Manhattan Elevated Railway
Con pany in the estimate which Il sub.
mitted 10 the Transit Commission a.
20 the cost Of reproducing its lines
which IL puts at iio7 900 900. a. against
the commissions valuation Of Ss5'-
AZ 7.sls-properly could include the cost
Of relocating and relaying all Of the
srbsurface construction in the streets
along iis routes. This is the opinion
of George " Burpee. an expert called
for the company, expressed NJ ihe com
mission hearing yesterday. 10 helu
20 this vieW. even though Clarence >
Shearn. counsel 90 the commission,
pointed out that II the Manhattan com
many were 20 rebuild rs structures
over the same routes. the subsuriace
works would remain ~ they are.
The witness also differed shafply
with the estimates put in hy the Inter
borough for the elevated valuations ~
the Manhattan company had been op-
Grating its own lines for ihc last year
without the expensive additions made
br the Inferborough. ~ would have fe-
turned profit 81 t9.40l.000 on iis
eapital stock OF so.0oo0oo, or : Per
cent he SAID
aIf ,he slructure were 70 be repro
du-ed to-day II would not be necessary
40 remove or relocate suo-slrfsce
sfrucfures. would it, Judge shearn
asked. ~.f the rev foundations are 40
sured % occupy 'he same space a. the
existing foundations
Mr Burpee said that in making an
estimate OF reproduction cost the com
nanv must establish The premise that
fhe sewer rines. water pipes ana the
various conduit systems would ne lo-
Gated as Il no elevated existed. and tnat
70 must be assumed mat iney "onia
nave io he moved before construction
could begin.
First Cost Was S50.OOo.Oo0
On that premise. Judge Shcarn re-
marked. the company ought 20 60 back
70 the streets "A they existed IN 1871,
,,ro,,,5 uorks we're in existence. He
added that there must be huge M
crease in labor. materials and the value
Of supcrintendence and engineering n
tho entire frst cost N 1877 was only
500. 100000 and the present repfodue-
lion estimate VAS Sl01 100000. Mr. Bur
nee said that his figures Tor moving
pipes and conduiis represented Pc
cent OF the entire sub-surface con
struction cost a. obtained over period
from 1912 20 1920. which he did not
consider unreasonable. In making re-
production estimate he said "the slate
must bc wiped clean
Mr. Bufrce declared that the Inter
borough valuation o. the Manhattan
lines showed deficit because 10 ~
oludec 40 part OF the system the third
track rs. the power plant improve
mcnts. the elevated extensions. and
the Joint operation Of the lines IN
Queens and fhe Bronx.
George Wildwood Murray. counsel
Tor the Manhattan. said 70 did not
make any difference whether the
amount Of these Improvements repre-
sent. which is In dispute i' charged
- So 100000 or a. SsO.000.000. he
would discard them in considering the
earning power o. the Manhattan sys-
fcm
Nr Burpec submitted figures ~ esti-
mated earnings for the Manhattan sys-
tenn. the schedules being based upon
fno different methods OF computing
tho operating expenses. One Of these
was upon IN" - per cent o. egross
revenue basis provided FOR in Con-
tract SO. 3 for operation over the
third tracks. and the other vas upon
the basis Of ~ per cent of the gross
revenue Included in the II per cent
was pcr cent allowed Tor main
tcnencc and depreciation.
On capitalization o. S6o000,000.
with steadily Increasing passenger
traffic that would reach 326 100000 in
1926. SIR. Burpec estimated that in 1923
the Manhattan could earn 59 per cent
on the Is per cent basis. g. per cent in
1924. "a per cent m 1925 and 4 little
less than : per cent in 1926. on the l.
per cent basis his estimates were 81
in 1923. 5.s in 1924. G.5 in 1925 and 71
in 1926.
The commission a.so held a hearing
on the Fourth and Madison Avenue and
the Eighty-axfh Street crOsstoVn line.
lrregu.arify Of service was the chief
complaint. DelayF A. Fifth Avenue on
the Forty second Street line also we're
complained Of, due 70 the traffic regu-
lafion system.
Considerable testimony vas given on
the Brooklyn surface ears. Most Of the
key routes are overcrowded, it vas
shown.
IO<I Gs.ot A. Ds