New-York tribune., 1922-03-21
Commission Trapped Into
Ceding Power to Hostile
City Regime, Quacken.
bush Holds at Hearing
Strengthens Hand,
McAneny Declares
Valuation Protests Flood
Board; B. r. T. Suit for
$2O;OOO,O 900 Is Filed

James L. Quackenbush, counsel for
the lnterborough Rapid Transit Com
pany said at the close of yesterday s
hearing before the Transit Commission
that he was convinced the transit law
amendments just passed by the Lcgis-
lnturc, if signed by the Governor, will
prove to be the rock on which the com
missions plan for unifying the transit
lines will be smashed The question
of valuation Of the traction corpora
tlons was taken up at yesterdays ses-
sion.
Mr.. Quackenbush's statement was
received with astonishment. He argued
that the commission, in giving its sup
port to the amendments, had fallen
into a trap and that the amended law
would defeat its own purpose by cast
ing cloud upon the validity of the
issue of bonds for the city-owned sys-
tenn. The question of validity, Mr..
Quackenbush said, would have to be
settled in the courts
Commission Disputes Contention
Chairman McAneny and Clarence 7,
Shearn, who shouldered virtually the
entire task of framing the amendments,
disagreed with Mr.. Quackenbush They
SAID that all such contingencies had
been considered.
With unanimity the companies. bond
holders committees and others inter-
ested in the lines which it is proposed
to merge vigorously protested at the
slon's tentative valuations or the
forty properties affected.
John II. Madden. valuation engineer
of the commission, scaled down the
aggregated valuations from $7o1.45O.-
$50 to S465 ,680,154.
10 add to the complcXity of the
merger and unifcation problem. the
B. f. T. began an action yesterday for
$40 100000 damages against the city
and Transit Commission charcine
breach of contract.
The chorus of protests from the com
panies against the valuations con
tanned the recurring word "confsca
tory" and the phrase without due
process of law" The tenor of the ma
jority of the letters from the com.
panies was one of threat of rcprisa1
and appeal to the courts. There were
few suggestions that the corporations
would cooperate witH the commission
in putting through its comprehensive
plan.
The B. r. T. holds that the commits
sion's valuation of its property is $S4,
100000 too low The board cot the
company's net capitalization more than
CIT nm mn y
than S93O0O,0O0.
Frank Hedley, president Of the In
terborough, says that the commission s
valuation of the Interborough is at
least S26.O00,000 too low.
Service Must Be Improved
Chairman McAneny in opening the
hearing said that the figures we're ten
tative. He added that valuations and
Improvement in service were entirely
distinct propositions, and declared i'm.
provement in service must come any
way, no matter what the valuations
might be.
The sensation sprung by Mr.. Quack.
enbush was at the close of the days
work.
81 feel that I ought at this time" he
said, "to call the attention of the com
mission and its counsel to what look!
to me like the probability of a very
serious further cloud resting upon YOU
proposed new securities, as a result o.
the amendment which passed the Legs
lature. 1t is my opinion that, wit
tingly or unwittingly, the commission
has walked into what may be called 1
trap. The representatives of the cit!
who have been here pointing out bjec
tions to Section 49 have placed then
on the ground that the companies woul'
be free, if they did not want to go int
the plan under Section 106, to appl.
for an increase in rates and be indie
pendent of the commission, and, actini
upon the suggestion, the Legislator
has seen fit to take from this commits
sion its power generally over rates AM
has limited it to cases only coming
under the plan 1O6. think you will
find that the Legislature has thereb,
deprived the commission of the powe
of sovereignty over rates and that 20,
have put into the hands of the city ad
ministration the power to block any
thing you may undertake to do.
.Jchs