Business: Tangled Transit

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Passengers in New York's humid, jam-packed subways wondered dully at the headlines in their neighbors' newspapers one evening last week: I. R. T. IN RECEIVERSHIP. What would that mean? wondered the subway sardines. Fewer seats than ever? More jerking and lurching, more pushing and bawling by red-faced guards at the stations? Fact was it might mean, eventually, an improvement in the lot of the subway sardine.

Interborough Rapid Transit Co. staved off receivership in 1922 by whittling down its guarantee of dividends of stock of the Manhattan elevated lines which it had leased for 999 years. As a further aid J. P. Morgan & Co. arranged an exchange of maturing notes for an issue of ten-year notes. The elevated lines grew progressively unprofitable. Last year they showed a loss of $4,000,000 which I. R. T. had to make good from its subway earnings. Knowing that I. R. T. would be unable to meet its notes on Sept. 1, Banker Morgan revived a dormant committee last July, wrote to all holders urging them to support plans for unification of all New York subways as the best way to obtain eventual payment. Recommending the same course Banker Charles Hayden of Hayden, Stone & Co. formed a protective committee for another note issue due in October. Both committees requested deposits of notes so that holders could be directly represented in unification negotiations. Though the two issues totaled $42,000,000 Wall Street felt at the time that the committees would extend them, thus avoiding receivership.

New York has three subway systems. Though I. R. T. is the largest, it is controlled by smaller Brooklyn-Manhattan Transit Corp. Chairman of both is grinning, square-jawed Gerhard Melvin Dahl, onetime director of Cleveland's traction properties, later a trouble-shooting vice president of Chase National Bank. Together the two lines daily hurtle 5,000,000 New Yorkers up & down their rocky island, under and over the East River to Brooklyn and the Harlem River to The Bronx. The city's third system is municipally owned. Though it carries no passengers yet, its empty trains have rumbled up & down under Eighth Avenue for a long time just for practice. Last week the periodic threat of city officials to open this line seemed near fulfillment. On Sept. 5, officials say, curious New Yorkers may pay a nickel to ride in the big, shiny new cars. But by law the system must be self-supporting within three years, and Mayor Walker's administration fears that if operated independently it will lose money, thereby losing also the cherished 5¢ fare, biggest plank in Tammany's political platform.

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