The New York herald., 1922-06-07
EXPERT SAYSI. R. 7.
EATS UP T. PROFITS
Burpee Thinks Flattering
Dividends Would Be Due
From Original System.
'BLAMES EXTENSION COSTS
Shearn Points Out He Fails to
Provide in Estimate for
Improved Service.

7 In the effort to justify the sl07, ,eo0.-
600 reproduction valuation placed upon
it's lines by the Manhattan Railway as
Its asking price from the city expert
evidence was presented In the Transit
Commission investigation yesterday to
prove that the elevated lines would b.
far more profitable system divorced
from the Interborough than in alliance
with IL.
George w. Burpee. engineering ex-
pert, who sponsored the Manhattan
valuation Of s107, 100000. presented a
report In which he had figured that the
elevated lines would pay increasingly
flattering dividends If unburdened by
the outlying extensions built and owned
by the Interborough and merged by it
with the original elevated system.
In those conditions, the witness est!-
mated, from "a to 4 per cent. would
have been earned on the Manhattan's
common stock for the fiscal year end
ing on the 30th of the present month.
with the rate increasing to from IL to
nearly s per cent. for 1926.
Questioned by shearn.
Clarence j. Shcarn, chief counsel for
the commission, elected by cross-exam-
ination admissions that In painting this
roseate picture of future prosperity un-
der separate operation and freed from
all entangling alliances Mr.. Burpee had
excluded certain substantial sums whic1
might possibly be chargeable against
the Manhattan elevated revenues. Somt
of the amounts, for instance, whicr
might materially cut down surpluse:
available for stock dividends were the
money required to comply with the de-
n1ands of prospective orders for i'm
| proved service, costs of power house
construction which the Interborough
would expect to exact in part from the
Manhattan under an independent man.
Agement and interest charges on Inter
borough bonds used to finance the build
| ing of the third track express service
equipment.
Mr.. Burpee conceded that the payment
of power house charges. for example.
would substantially lower the net rev.
| enues of the elevated lines under in
dependent operation. Ir the prepara-
tion Of his schedules he lad included
! the use of the express tracks, he said.
hut had excluded the extensions financed
| and built by the Interborough into
Bronx and Queens boroughs.
I To fortify his position the company's
/ expert presented two sets of figures, the
one set based upon deduction of IL
per cent. of gross revenues for main
tenance and the other based upon
deduction of il per cent. The latter
included some depreciation charges. He
| defined maintenance as including the
sums needed for general operating ex-
penses taxes and interest on bonds, but
as Judge Shearn later brought out, GER
| tain additional costs had not been con-
] sidered.
His forecast Of earnings was predicted
on the theory that in 1925 the elevated
system will be carrying 360.0o0.0Oo
yearly. This. Mr.. Burpee held Is
moderate estimate.
He agreed that Joint operation over
the old Manhattan lines and the extern
! sions. as well as use OF the express
| tracks. had increas sed patronage. but he
insisted that in making his forecasts
of earnings he had discounted the pro-
spective loss of the extensions In the
elevated service.
! O,Rynn Sees Political Football.
Gen. O'Ryan said in an address last
night at the Evander Childs High School,
! The Bronx that one of the problems
of the Transit situation in New York
CITY was the moral issue rather than n
matter of convenience. He pointed out
the dangers to which girls and young
women are subjected ih faNeih'e ~
and from their places OF employment
! on crowded subway and elevated trains.
The Commissioner said he had been
himself a straphanger for many years
and added that he deplored the fact
that the Transit problem had become
political football. inasmuch as IT con-
cerned every person In the greater CITY,
He traced the history OF the various
roads and said that at the present time
200 corporations were in possession Oh
more than 1000 franchises in the city,
some of which were of unlimited dura-
ton.
Gen. organ outlined phases OF the
var,ors remedial plans that had been
considered by the Commission. He SAID
the city lad not sufficient funds with
which TO buy the Transit lines and had
no means of raising sufficient money IL
purchase was desired.
-,- T0DV KA DKC