New-York tribune., 1922-06-06
Predicts Profit
Of Million on
The IL" in 1926
Rurpee, Before Transit
Board. Says Manhattan
Should Overcome Deficit
within Next Four Years
Valuation Is Attacked
sbearn Offers Brief to
Show Line Was Worth
s54.98O,764 in 1909


-. h.,,Ie Of counsel and experts OF
a. Manhattan Railway Company to
.-s.,i,u,. = their claim that the company
~. r,,l valuation OF slo7, ,456.l4o, as
-, the Transit Commissions ap-
- ., s5,4i7.e4e, engaged the at
,..,,ou Of the commission and Clarence
s.,,n is special counsel. at an
.uS,v hearing yesterday. with Com
-,,,,o.er Harkness presiding.
c,ore, Wildwood Murray. counsel for
- v,,h.ttan. and George w. Burpee,
...,ve,ion engineer. were heard.
e'-s Manhattan company Is now op-
- vnder a nincty-nine year Z per
go oi.,se bv the lnterborough. and the
i.,,,, asserts that carrying out the
go, Of this lease Is most emoar-
...sj,e burden, as the Manhattan com
n.-v does not pull It's weight IN the
-; n va, the carrying OF this bur
49, ave or six weeks ago forced a
s;~s,rsat c,n srs OF the contractual rela-
49,. between the marlborough and
the Msnhtttsn.
Bvrvee Under Cross-Examination
!, suit. Of recent records, the Man
,.,t,n interests contend that the
s,iSinal Manhattan company IS prof
~ orsrsting unit. or would be II II
..ss.' ,sgrs0ated. and the hearing yes
80 vas given over almost wholly
' INSTRUMENTATION BY Judge Shesrn
- w, purnee. who, rs an expert wit
v.,s .nstained the schedules giving
~ ~ y,lue Of the property at more than
sWould Won recommend TO any firm
II h.,kers or investors paying SlO7.-
Soo o00 FOR the tangible property OF
~. Manhattan Railway Company,
asked Judge Shearn. q,
# cannot answer that question,
..iS Mr.. Burpee. "beca1se have not
examined the property with that exact
w N, Burpee said further that i he
..r, brving the property for clients
s. would be bound to investigate It's
,,st nresent and future earning power.
rsIf Won found that 70 had been for
,,n, time past operating at very
,uhstantlal deficit you would take tnst
INTO confederation, would you not
asked Judge Shearn. ,r
Tho witness said he would, and that
reasons for the deficit would also have
to be taken into account.
Profits Ahead. Says Witness
Judss shearn said that in 1920 there
ssd been q deficit Of some S264.000 in
operstion for the fiscal year. without
Ysfsrenes 10 the guaranteed rental OF
7 per cent on the capital stock. De-
spite a net corporate deficit Of s1,394,-
900 IN 1921 and an estimated deficit
Of silso,OOO for 1922. Mr.. Burpee esti-
mated profits for the ensuing four
years II 100000 in 1928. $560000 in
is;i, $4,000 in 1925 and 81, 100000 in
r16
Mr.. Murray objected 10 the trend OF
The questioning, but was not sustained
By Commissioner Harkness.
Il shall want later to have some
thing 10 say said Mr.. Murray, about
what will call the vicious re-circle Of
taking fixed earning power and using
that as determining factor for the
value"
Judge Shearn said that the estimated
'ptfating profit OF million dollars a
rear four years hence Mr.. Burpee's
igures-did not warrant any such esti-
iste as the company placed on its
ssets
Mr.. Burpee said that the anticipated
rnings in 1925 would likely be be-
'een 5 and per cent.
Judge Shearn countered with the sug-
,stion that the elevated would meet
.th increasing competition when the
,ditional subways were built.
Disputes Interborough Figures
ut is quite within the bounds OF
ossibility that in the lapse Of some
me. which certainly is measurable.
he elevated railway system as such
iay be entirely superseded, IS II not Z!
sked Judge Shearn.
"That Is possible" said Mr.. Burpee.
Judge shearn produced a brief by
Richard Reid Rogers, counsel for the
marlborough as lessee, who in 1909,
a a return TO the State Tax Board
.vsrred that the value OF the Manhattan
n that time was S54,9s0,764. To tnis
Judge Shearn said that IL would be fair
70 add s4,300,O0O. representing addi-
tonal expenditures made necessary by
the Manhattan.
hr. Murray said that these figures
came from an lnterborough source and
we're not binding on the Manhattan.
Ne further quoted Judge Hand in the
Consolidated Gas Company case 10 the
effect that present value" should con-
,fol. Deficits attributed 20 the Man
haitian we're not Of its own making,
Nf. Murray said, but due to the fnsn-
stl load imposed by the Interborough.
De said that everybody knows there
hsVer has been an operating dehcit on
ne Manhattan property.
Suoge Shearn asked Mr.. Burpee
shether II the valuation. brought down
% date at s59,0OO,O00, would warrant
him lBurpee), TO recommend the ae-
,alsltlon Of the road 70 investors at
'iV''OOO'OOo, as cost Of reproduction.
Sharp Debate on Easements
Not solely on the cost TO reproduce"
said the engineer, adding later that
,s would give due consideration to the
'0iare Possibilities Of the system.
suoge Shearn held that the $4,000
~ valuation OF 1919 WAS made as
.lsn as possible because it had been
20 \. ne lnterborough's interest TO make
y 70 BY reason Of the fact that in
eOnputing the franchise tax the COM
yEzxIyy0zzSEySSES.