The Northwest enterprise. [volume] (Seattle, Wash.) 1931-1952, 1937-02-12
Street Railway
Rehabilitation
Plan Explained

Il
aoest Enterprise aeil outline for its
readers the salient points Of the
Street RaSIloay rehabilitation pro
gram. Voters a0iH be asked TO
pass upon this program a0hen they
ballot upon tie S1s,500,00o bond
issue at the election March 81
When Seattle citizens go to the
polls next month to decide whe-
Their they want the Municipal st.
Railway modernized they viii have
a relatively simple question be-
fore them, it was asserted today
oy Isaac Comeaux, chief account
ant of the city.
There have been a lot Of at
tempts to make the problem ap-
pear complicated" Comeaux said,
but there is nothing complicated
about it. Mayors and other city
officials of the past three or four
administrations have wrestled with
the Street Railway tangle. At
last plan has been worked out.
And it is the only plan ever pro-
nounced feasible. It has been
checked and re-checked in every
detail. Underwriters are willing
to finance it and will consider no
other. The City Council has ap-
proved the program unanimously
and referred it to the voters for
ratification. That is all there is
to whether Seattle shall go
forward or backward"
Briefly, the program calls for
a bond issue of $12,500.000. OF
this, only $12,OOO,OOO would be is
sued at present, with the remain
der being held in reserve for use
when and if it should become me-
cessary to purchase additional e.
quipment.
Under the plan submitted by the
Beeler Organization. consultants
and engineers of New York, the
remainder of the old Indebtedness
to Stone & Webster, which has
been hanging over the city's head
since the purchase Of the street
railway in 1919, would be wiped
out. Seattle has found it impos-
sibIe to keep UP its payments on
this contract and the company has
granted seven moratoriums.
This brings out one point, about
which there has been much mis-
understanding: the bond issue now
before the voters viii not increase
the city's indebtedness S12,530,O00
but only $2,464, 900. Also. ali the
street car men, who have been
holding warrants, would be paid
in fun and would receive their
salaries in cash thereafter.
One of the best features of the
proposed refinancing is that Sc
attic taxpayers are not being ask
ed to put a dollar of their money
into the rehabilitation. The entire
financing program will be taken
care of from earnings, with the
Street Railway funds kept entire
ly separate from the city's gener-
al fund. Experience of other cit
les shows that the program OUT
lined for Seattle will be a money
making proposition. Hard-headed
underwriters are so convinced of
it that they are willing to stake
cold cash on the outcome.
And if the voters turn down the
proposition, what then? The fin
ancial hackers have indicated they
are at the end of their patience.
If Seattle does not want to accept
this offer-well, Seattle can just
struggle along with its present dr.
apidated street cars and worn-out
busses. The city, too, can lace
the possibility of seeing its NUM-
cipal Street Railway go into bank
ruptcy if the bondholders should
decide to force the issue. This
would do irreparable damage to
the city's credit throughout the
nation. Seattle probably would
not be able to borrow again from
any source for many years to
come.
Partial rehabilitation of the sys-
tenn has been called impractical
and no one who has made study
of the problem advocates it. I'm
der a partial program, those dis
tricts of the city that failed to get
new equipment would raise such
a storm of protest there would be
an immediate demand for COM
plete modernization, even if it had
to be obtained by direct taxation.
Furthermore, there is no pos
sible way of financing partial re-
Mobilization at this time. With the
old Indebtedness remaining ag-
ainst the railway purchase of any
new equipment would require the
issuance of second-mortgage bond.
No financial house in the country
would accept such paper from Sc
atrle, Mr.. ComeaIx declared. He
characterized ali talk of partial
rehabilitation as merely attempts
to fog the issue"