(2 of 3)
The Transit Commission is charged by law to amalgamate New York's rapid transit facilities. Lawyer Samuel Untermyer, as special counsel to the Commission, has advanced three plans for combining various systems. All three were pigeonholed after long political and financial squabbling. Acting as a private citizen and "heavy taxpayer," Samuel Untermyer last June proposed still another plan to counter one published by the Commission last year after he resigned as its counsel. These two plans are now the bases for negotiations. Negotiations have been delayed because Mayor Walker and his officials have been engaged elsewhere (see p. 10). Both plans call for a Board of Transit Control, a public body which will purchase I. R. T. and B. M. T. by exchanging its bonds for their securities, and also acquire the city-owned system. The Transit Commission wants to back the proposed Board's bonds with a virtual city guarantee. Citizen Untermyer will have none of that, for the city, strapped already, is nearing its legal debt limit. Though believing the economies of unified operation insure retention of the 5¢ fare, he insists on a rate sufficiently flexible to make the proposed Board's bonds stand on their own feet.
Most of the wrangling has occurred over the price to be paid for the two private companies. The potential political patronage of the Board also clouds the situation. B. M. T. has toyed with the plans advanced, but because B. M. T. has good earning power and is financially sound, Chairman Dahl has steadfastly held out for better terms. A $13,500,000 B. M. T. note issue was taken care of by the bankers last month. As a condition of the loan, however, the $4 dividend was omitted despite earnings of $7.15 a share for the fiscal year. Shortly before this at the request of a group headed by Bernard Mannes Baruch and reported to control 150,000 shares, Elisha Walker, bankless banker, and Herbert Bayard Swope were elected to the Board. Though he is known as a good operating man. Chairman Dahl's longstanding animosity for Lawyer Untermyer has flared up frequently in his dealings with the Transit Commission, complicating negotiations. Observers thought that Financier Baruch had become impatient with his good friend Chairman Dahl's tactics, that his direct entrance into B. M. T. affairs would soften Chairman Dahl's unyielding stand. In the event of unification, Chairman Dahl's organization, more efficient than I. R. T.'s, would probably be retained and Chairman Dahl might become tsar of a united 688-mi. system carrying more passengers than any railroad in the world.