Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 86, no. 2230: December 10, 1910

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December lO, 191O. RECORD AND GUIDE 985 If' Ita&jEDpR^^LEsTAjt.BuiLOlj/G A;P,ClflTECrTURE,HoUSEIfOLIlDEGtStATIM4 Bi/sutess jufoThemes or GEjfe^L 1Kter.es-[^ rRICE PER YEAR IN ADVANCE Communications should be adSxeasetl t9i e ■W- S'WEET Tublished EVerg Satardag By THE RECORD AND GTJIDE CO. President, CLINTON W. SWEET Treasurer, F. W. DODGB Vlce-Pres, & Genl. Mgr., H. W. DESMOND Secretary, F. T, MILLBR Noa. 11 to IS Elast 24tli Street, Ne-n- York Cltr (Telephone, Madison Square, 4430 to 4433.) "Entered at ihc Post Office at New Porfc,, A'. P., os second-class matter." Copyrighted, 1910, by The Record Se Guide Co. Vol. LXXXVl. DECEMBER 10, 1910. No. 2 230 WHO WILL BID MORE? THERE can be no doubt to the mind of any unprejudiced and candid observer that the proposition made to the Public Service ■Comiuissiou during tbe past week by the lu¬ terborough Rapid Transit Co. comes near to a temporarily satisfactory solution of the problem of subway extension. Readers of the Record and Guide may recollect that while this paper has consistently approved the idea of extending the present subway (provided tbat satisfactory terms could be obtained) rather than the alternative plan ol building an independent system, we have never supported any ome of the many previous proposals made by the Interborough Com¬ pany to the city. Between the alternative of submitting to au unfair and wasteful contract and that of building an in¬ dependent system, the Record and Guide has always favored an independent system laid out along the most useful lines. But the luterborough Compauy has now made a proposition ■which is by far tbe most liberal ever submitted to the city by a private corporation, and which safeguards every legiti¬ mate public interest. The proposed contract should uot be accepted until tbe Board of Estimate is convinced that no better proposal can be obtained from any other source. But if no better proposal can be obtained the offer of the Inter¬ borough Company can be accepted with full assurance that its terms are eminently fair aud the policy it embodies is wise. Fortunately, also, it seems to be on the road to ac¬ ceptance. Certain newspapers which have committed them¬ selves irrevocably to the Triborough route and the McAdoo offer are still favoring competition at amy cost, but appar¬ ently the Public Service Commission will recommend the adoption of the offer, and while the Board of Estimate is in doubt, it looks as if under the leadership of the Mayor, a majority could be counted in its favor. Its rejection, pro¬ vided uo better offer is forthcoming, wonld be sheer folly, and it would be the kind of folly which would eventually cost the taxpayers of this city and particularly of Manhattan very dear. ♦ is smaller than that of the company, and because with the smaller total expenditure tbe risk is negligible. There can be no doubt that the proposed extension would earm enough money to pay all tbe charges incurred by their construction and equipment. On the otber hand, the construction and operation' of the Triborough route cn the terms proposed by Mr, McAdoo would, from the city's point of view, consti¬ tute a hazardous enterprise, which might cause an expense to the taxpayers, and which would obligate the city to keep on raising money for transit extensions at a time "when it is already borrowing larger sums tban can be obtained on ad¬ vantageous terms. II the Mauhattan taxpayer is alive to his own interest he will insist that the safer financial scheme be adopted. III. Finally, the Interborough's proposal bas many col¬ lateral advantages. Of these the greatest is the surrender by tbe compauy of a certain part of its present lease, so that tho whole system will revert to the city at the eud of sixty- nine years. The Public Service Commission deserves the ut¬ most credit Eor having insisted upon this provision, which will eventually mean the saving of many millions of dollars to the taxpayers of the city aud the progressive enhance¬ ment of the city's credit by the creation of an asset of great value, which can be appropriated as a whole on a certain date. THREE REASONS, THE reasons which make the Interborough Company's proposition decisively better than any now existing al¬ ternative may be grouped under the following words: I. It supplies a maximum increase of rapid transit at a minimum cost. It has almost all the advantages for the inhabitants of the Broux and Brooklyn of the Tri-Borough route, while it has a greatly increased advantage for the in¬ habitants of Mauhattan because it opens up the lower West Side- All this Increase in transit is obtained at a total cost of about $131,000,000, instead of about 3200,000,000, Every dollar that is spent counts to the limit; and every dollar of the city's money that is needed can be raised without any straining of the city's credit. II- The financing of the proposed extension is made much easier just because the total expenditure is so considerably re¬ duced. The city contributes only $53,000,000, and this sum can be borrowed without either exhausting the city's bor¬ rowing capacity or causing money lenders to charge an ex¬ cessive rate of interest. The company supplies $75,000,000. It demands, as Mr. McAdoo did, that the interest on this money shall become a lien ou the earnings of the new route prior to the interest on the city's contribution; but this de- mamd is under the circumstances much less dubious than it was in the case of the other offer. The city can afford to grant the demand, because its contribution is fixed aud THE ANTI-MONOPOLY ARGUMENT. r|->I-IE advantages of the Interborough Company's proposal X are so manifest and indisputable that its opponents have avoided any discussion of its merits. They merely urge that tbe city should establish aud finance a competitive sys¬ tem, no matter what such a system would cost and no mat¬ ter what its disadvantages would be to the people of New York. The choice, they say, lies between competition and monopoly; and seductive as is the bribe offered by monopoly, it must be rejected. Let it be admitted that the competitive system duplicates existing means of communication, that it leaves certain important parts of Manhattan wholly unpro¬ vided with subways, that it requires the expenditure of more money than the city can afford, aud that it costs more per unit of increased rapid transit. Let it even be admitted that probably one-quarter of the total number of passengers car¬ ried on the two competitive systems will have to pay ten cents instead of flve cents in fares, at a total increased cost of perhaps $20,000 a day or over ?6,000,000 a year. These disadvantages are negligible compared to the dangers of sub¬ mitting to a monopoly. Arguments of this kind provide then- own refutation. What newspapers like the Evening Post propose is that the city should abandon the benefits of com¬ petition at the moment when competition is effective in order to secure its benefits when competition is ineffective. The limits of effective competition in the operation of transit routes is very slight, fares are established, and the enor¬ mous majority of passengers are obliged to take one route or the other- Competition may be useful at the time of the bidding for franchises, but the whole history of urban transit shows that it has little or no value for the purpose of im¬ proving service. The irreconcilable opponents of the Inter¬ borough Compauy scout competition when it is effective for the purpose of securing it when it is ineffective. THEY WILL NOT LET THE INTERBOROUGH COMPANY COM¬ PETE WITH MR. McADOO. They say to that compauy tbat its proposal must be rejected, no matter what its merits may be, because sound public policy demands two subway systems. The city must accept a comparatively costly and disadvan¬ tageous proposal from Mr. McAdoo so as to avoid the crea¬ tion or perpetuation of a monopoly. It seems to Tbe Record and Guide that such reasoning is utterly unsound. Any really effective competition is taking place at the present moment, and to disqualify the most important competitors is both foolish and unjust. It would he bound to result in a waste of public money compared to which the contract with the Interborough Compauy for the existing subway would be economical. What the city 'wants is not two sub¬ way systems at aiuy cost, but the best rapid transit it can get for the least money. If so-called competition is financed at any cost, the expense will not be paid by the competing cor¬ porations. It will be paid by the real estate owners of New York and the people wbo travel on the cars. THE only semblance of reason which can be detected in the demand for an independent subway at any price con¬ cerns the situation of the city in respect to future subway extensions. It is claimed that if the monopoly is perpetuated the city will eventually be tied baud and foot and will have to accept any terms the company demands. But this argu-