Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-13

alton because of its contracts with the
city. the marlborough went further into
debt
Finally, in 1919, a new agreement was
formed whereby all receipts, except
those from the elevated lines. were to
be put into a fund from which all
fixed charges were to be paid. What re-
manned was to be divided between the
company and the city. At this time ii
series of contracts were signed, among
which was one which fixed the fare at
5 cents.
Legal Decisions.
In spite of these attempts to better its
situation, however, the basic difficulties
still remained. and to make matters
worse New York City began to build
subways which would compete against
made an attempt to raise the fare to
Z cents. The subject Immediately be-
came a political issue in the city, at
tracing much attention.
The question of the legality of the pro-
posed 7-cent fare has caused fluctuations
in Interboroughs stock for several years
In May, 1928, the Federal Statutory
Court granted a 7-cent fare on the
basis that the scent rate, returning
only 2.5 per cent on the value of subway
properties, was confiscatory. The sharp
rise in the company's stock occasioned
by this decision is apparent on the
chart. The city, however, managed to
STAY the decision until the Supreme
Court could review the case.
That the Supreme Court decision
against the 7-cent fare was a diSap-
pointment is indicated by the 20 point
in cIN oI.1 re- L.
widely believed that the only course left
for the marlborough is to enter into an
agreement whereby the city-operated
lines and the I. r. T. and B. NJ. T. lines
will all be operated by a quasi-public
corporation. If such a plan does not
work out, many feel that the company
VIII be forced into receiverShip in a
few years.
Manhattan Modified.
When the PETERBOROUGH originally
leased the Manhattan Elevated it agreed
to pay interest on bonds and per cent
on common. In 1922 an adjustment
plan was put through whereby the COM
mon dividend was reduced to SIS, with
the understanding that after the Inter-
borough mad received 81 more would be
paid.
Only 95 per cent of the Manhattan
Elevated stockholders agreed to this
plan, and since the lease states that it
cannot be changed without the unani-
nous consent of all stockholders, the
Interborough was forced in 1924 to pay
at the per cent rate on the stock held
by the diSSenters. Thus, this block of
stock carries dividend of 81 and sells
about 40 points higher than the "modi-
ned" stock, Which pays nothing.
Brooklyn Manhattan Transit,
The Brooklyn Manhattan Transit Co.
was formed in 1923 as a holding COM
pany to take over control of the Brook
lyn Rapid Transit, which operates sub
ways, elevated and surface cars and
buses in Brooklyn and Manhattan. IN
like those companies whose business is
chiefly in Manhattan, B. NJ It's busi-
ness, especially that in Brooklyn, has
increased steadily since 1923 and earn
1ngS have risen from $274 to $662 a
share. Thus the dividend of 81 seems
well secured, and the yield is over 6
per cent at present prices.
Although B. M. T. has been able to
cope successfully both with difficult
problems confronting all the fractions
and with the city in making contracts
the Supreme Court decision against
I. r. T. caused a small decline in its
stock. This is easily eXplainable in view