New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-05-19
Shearn Cuts Valuation
OF marlborough in Half
Estimate OF SOB, OOO,O 900 on
Contract No. 3 Should Be
$3O.OOO.OOO. He Contents

The lnterborough Rapid Transit
Company's holdings under lease from
the city on what is known "a Contract
3 were declared to be worth not half
OF the companys estimated valuation
by Clarence j. Shearn. counsel for
the commission, at the resumption OF
the t,aasit valuation hearings yestcr-
Cay. The claim of the Inter borough is
that this easehold is worth $68 900 900
Mr.. Shearn declared that under no
circumstances could the company get
more than s30,000,000 under the terms
Of the contract if it were to be can
celed by the city.
The contention Of the company,
counsel insisted, was based on an as
sumption that the lease would run
its full course of forty -nine years. 1t
ignored entirely, he said, the claim of
the city that it can terminate the con-
tract at the end Of three years.
Henry T. Berry, assistant auditor for
the marlborough was on the witness
stand most Of the day He did not
the city had the right to recapture the
subweys at the end Of ten years, which
would place the critical period three
years hence, in 1928. He finally ad-
United, after long and severe cross
examination, that if Mr.. Shearn's con-
tention as to the possibility of losing
the lines in 1925 we're to be accepted,
the valuation of $50 900 made on
that basis would have to be accepted,
| too.
When questioned as to the cost of
putting into operation the various i'm
| provement of service orders of the
! commission, Mr.. Berry's estimate diff
fered radically from those of other In
terborough officials. 1t would cost $780,
600 year for 1923 and 1924, he said,
whereas, as counsel pointed out, other
| official estimates had run more than
I S1,000,00O year.
Shearn took the Is per cent of the
profits which the city must pay to the
lnterborough if 1t takes the lines,
about s15,o0o 900; the preferential due
it fo.' the three years ending 1925,
amounting to $9,524,O0O and a deficit
on this preferential of 100000.
The witness said this was right, but
insisted that there must be taken ac-
count of the fact that If these lines
were recaptured by the city the Inter
borough would still have those under
Contracts l and g
Counsel for the marlborough, J. G.
Edwards, said that these two contracts
would have to be considered in any
valuation. To this Mr.. Shearn replied
that the marlborough would still have
to pay 100000 year on the elevated
lease. Mr.. Berry was excused until
| the next session.
Colonel Crimmins, who appeared for
the company, differed from the commits
sion's wage experts by s1.50 day in
the pay of common laborers. He said
$3.50 a day was the prevailing wage
| The commissions engineers put the
wage at $500 for the month of March
This is the period which the Inter,
borough has taken as a basis for its
valuation. They report that the differ.
ence is an eXaggeration and that the
| S400,00O,0O0 fixed as the cost of a theo
retcal reproduction should be but
$4,000, 900.
When Mr.. Kellogg was called to the
stand, to be questioned in behalf OF
the marlborough on the valuation Of
William S. Gorsuch, the expert wht
arrived at the $4oo,ooo,oo0 figure, con
siderable debate arose over his ability
to qualify as an expert without limta
ton. His opinion was that the Cor
such figures were logical and con
servative."
Mr.. Shearn asked Mr.. Kellogg if hi
had prepared the report of 1919 upor
which the marlborough based it's claim
for an increase in fare and which
stated that labor and material cost
would remain level FOR at least fiv'