Last December the valuation and other issues not submitted for decision at the November 1945 hearing
were tried. Voluminous documentary evidence and the testimony of numerous witnesses were introduced
before the Tax Court on December 3, 4 and 5. Final Briefs are due to be filed by April 23, 1948. A decision
is not expected before summer and the Court may take longer in view of the complexity and difficulty of the
matters involved.

Proposed Investigation by the Public Service Commission of the State of New York to Determine

Whether the Fares on the Routes of New York City Omnibus Corporation, Madison Avenue

Coach Company, Inc., and Eighth Avenue Coach Corporation Should Be Reduced

Reference was made in the last two annual reports to proceedings commenced during March 1945 by
the Public Service Commission of the State of New York against this Corporation, Madison Avenue Coach
Company, Inc. and Eighth Avenue Coach Corporation for the purpose of reducing the rates of fare charged
by them for bus transportation (Cases Nos. 11885, 11886 and 11887 respectively). Pursuant to Court
orders, all rate hearings before the Commission were held in abeyance pending a judicial determination as
to whether the Commission had jurisdiction. Under date of February 28, 1947, the Couri of Appeals of the
State of New York handed down its decision and held that the Public Service Commission did have juris¬
diction to change the rates of fare charged by the corporation and its subsidiaries. The Public Service
Commission has taken no further action in these proceedings. It seems to the Company quite obvious that
there could be no justification for a decrease in fare but that, on the contrary, present economic conditions
warrant and require an increase in the fare.

Service Conditions

The passenger revenue collected on the lines of this system during the first seven months of 1947
was greater than that collected during the corresponding period of 1946. But the revenue received during
the last five months of 1947 was somewhat less than that collected during the same period of 1946 although
for the entire year 1947 the revenue was slightly greater than in 1946. The trend was definitely downward
during the latter part of the year.

Throughout the year we continued to experience difficulty in securing adequate material and replace¬
ments for maintenance purposes. In the year 1947 the amount of bus mileage operated was greater than in
1946, but we were not able to furnish all the service desired because of the lack of serviceable equipment.

An increase in traffic congestion unfavorably affected bus operation on certain of our lines, especially
during the latter half of 1947. On some lines also there was a notable decrease in the volume of passenger
riding in the evening. Commencing in April, 1947 the closing of the banks on Saturdays became effective as
an all-year-round arrangement. The closing of the banks on Saturdays formerly was restricted to certain
weeks in the summertime, but the extension of this plan to the remainder of the year and the fact that many
business establishments have also followed a similar practice have definitely reduced the receipts of some
of our lines on Saturdays.

The Winter of 1947-1948 has been unusually severe. The heavy snowstorm of December 26th caused
a partial shutdown of our service on that day and bus operation was necessarily entirely suspended on the
two following days. The after effects of the storm endured for some time.

The passenger revenue for November and December 1947 was about 7% less than the passenger
revenue collected in November and December 1946.

Thirty-five new 44-passenger single-deck Diesel engine buses were received in January, 1948. Seventy-
five more such vehicles, which have been on order for some months, will be received within the next two
months. They will complete the total of two hundred and sixty-two new buses delivered in less than two
years, representing an investment of about $4,285,000.00. This additional equipment will substantially
improve our operating facilities.

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