September 28, 1907







RECORD   AND   GUIDE





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Copyrlghted,   1907,  by Tĩie Record   &  Guide Co,





Vol.   LXXX.





SE'PTBMBER 28,   1907.





No,   2063,





INDBX TO DEPARTMENTS,

Advertising  Section,

Page.                                              Page.

ílement  ......................xvli  Lumber   .....................xxii

Clay  Products   ................xix  IVIachiĩiery   ...................viii

Consulting  Engineers   .......xviii  Metai  Work   ................xvi

Contractors aud Builders  ......iv  Quiclt Job Directory..........xĸii

Electrical    Interests    ..........ix  Real Estate  ....................xi

Fireproofing   ...................ii  Roofers  and Roolĩng Materials.ix

Granite   .......................xx  Stone   .......................xx

Iron   and   Steei..................x  Wood Products  ..............xxiii





THE receivershiĩD of the New York 'City Railway Coin-
pany will, it may be expected, cut the knot of a dif&-
cult situatiou, wliicli it was beyond the power of financial
ahiiity to unravel. By nieans of a receivership it should he
possibl^ to ainiplify the organization of the surfaee-
car lines in Manhattan, reduce their flxed charges
to a figure justified by the earnings, and provide
the nioney for necessary improvements. One cannot
predict as yet with any certainty that these results will be
achieved in a year or two, hecause litigation may intervene
and delay a satisfactory settĩement; but a solution of this
kind cannot be delayed for long. The plain fact îs that the
street-car lines cannot earn their ũxed charges, and the
interest of tĩie creditors aiid stockholders of the companies
will be benefited by a reorganization, which will do away
with the piling up of a deíĩcit iu order to declare a dividend.
Manifestly, also, the interests of the public who use the cars
wĩll also be beneflted by a receivership, for the company
should emerge from its legal dilficulties in a much better
situation to fulfil its responsibilities. Why is it that a cor-
poration, controlling all the surface-ear lines in the most
densely populated Eorough of New York City—-why is it
that such a corporation should be unable to meet its liabili-
ties? This auestion cannot he fully answered nntil after a
complete ofRcial investĩgation has been made; but the salient
eonclusîous which such an investigation will justify can
already be sketched. In the first place, the business of
consolidating the street railways of Manhattan and of trans-
Eorming them into electric roads, while it was extremely
profitable, was also extremely costly. The exĩsting fran-
chises and properties were acquired at high prĩces, which
were represented by flxed charges on the earnings of the
consolidated company; and the purchasing corporation was
subsequently obliged to raise more money for improvements
hy the same means. Furthermore, it is apparent that' the
men who brought the eonsolidation about were not above
the good old practice of milking the corporation for their
own benefit. To a lai'ge extent these heavy expenses in-
eident to consolidation could not be avoided, but if the com-
pany had been managed scrupulously in the interests oE all
its stockholders they could have been very much reduced.
The object of the directors of the corporation was to bond
the company and its subsidiary eorporations for just as much
as they could; and they undoubtedly increased the capĩtali-
zation more than was necessary.





OUESTIONABLE flnancial methods were used by the or-
ganizers of the Metropolitan Corapany from the very
start; but this fact did not prevent their operations from
being in the beginning brilliantly successful. The stock in
the company was selling about ten years ago for over 200,
and its prospeets were apparently of the brightest.    Its earn-





ings had been increasing steadiiy and largely. The improve-
ment in the service, consequent on the eleetrification of the
lines, enabled the trolley cars to attract many passengers
from the eĩevated roads. The trafflc on the elevated roads
decreaaed for ;.; number of years, while that on the surface
liiibs was iicrcasing at a ratio out of all proportion to the
growth of thc population. It was this extraordiuary suc-
cess at thc outset whích proved to be the uudoing of the
comi)anv. its directors assumed' that its earnings would
continue to 'iicrease at much ĩhe same ratio, and all their
finajicial pians M'ere based upon sueh an expectatton. They
did not reaiizo tbat the large increase in trafBc was due in
part to exceptional eonditions, which would not and did not
enduro. Aa a 'natter of fact the change came very soon
after the late Mr. W. C. Whitney sueceeded in buying in his
last competitoi', which he did in 1899- The surface lines
wer í obliged to compete first with a very much improved
service on the part of the elevated roads, and later with the
Subway. ifi thĩs w,iy many passengers were diverted from
the !i,uvface cars—-passenfe'i's which these cars would never
have obtaĩned in rase tlie wo;k of giving^ Manhattan really
rapĩd transĩt had been undertaken at an earlier date. Even
this increased competition, however, is not suflicient to ex-
plain the faet that for flve or six years the earnings of the
street-car iines have been practically stationary. No matter
what the competition for long-distance traffic, the surface
cars would have been fully compensated for its loss by the
increase in the more profltable short-distance traffic—pro-
vided they could fiave maintained the quality of their own
service, The failure of the company has been due far more
to a deterioration in the efficiency of its own service than
an improvement in that of the rapid transit roads. This
was a contingency on which the finaneîers of the old Metro-
politan Company never counted; and ít is the contingency
which is chiefly responsible for the present receivership oE
the system.





I





SĩNCE 1901 the increase in the general street trafflc in
Manhattan has been enormous. During that period
the amount of business transacted on the island was not
far from doubled; and the number of vehicles using the
streets has increased almost to a corresponding extent. It
is this condition which has made it impossible for the City
Railway Company to improve its service, or even to main-
tain its old efficient standard. Their cars are subject to
many more delays; and during the winter months it is im-
possible to niove a suffieient number of cars past certain
important points of intersectĩon. The embarrassment, which
the officials 'of the company have experienced in running
its cars is, as the Record and Guide has frequently pointed
out, the ehief reason for the deterioration in the service;
and this contention has been fully justifled by the testimony
offered to the Public Service Commission. The pĩain fact is
that the street system of the Eorough of Manhattan is whol-
ly inadequate to the traffic it is oblĩged to carry; and the
New York City Railway Company, as the most important
business concern using the streets, has suffered from it more
acuteĩy than any other ĩine oE business. Eut in the course
of time other lines of business will suffer in a similar way,
because the congestíon of street trafiîc is j'ust as sure to be-
come more acute as is the business of Manhattan to become
more abundant.





IP THE POREGOING description of the reasons for the
receivership o£ the New York City Railway Company
is true, they justify certain important references. The
most important of these inferences is that the service offered
by the company to the public will not be materially improved
by a financial reorganization, or by the aimple expedient of
running more cars. The only effectuaĩ means of improvîng
it will be to make arrangements which will enable the traffic
to move more freely. Much can be accomplished în this
respect by means of.traffic regulatious, such as have been
suggested by the company's officials; but even auch regula-
tions will be an alĩeviation rather than a cure. The traffic
eonditions will never be radically improved without a re-
planning in certain essential respects of the street system
of Manhattan. Of eourse the city will never undertake the
portentous taak of laying out a new street system for the
beneflt of the City Railway Company, but eventuaĩly it will
be obliged to undertake it for the beneflt of every corpora-
tion, firm or individual who use the streets for other than
pedestrian purposes.