More than Chalk Talk

New York City's public transportation system has well earned its bad name. The city-run subways (237 miles) and surface lines (554 miles) are often slow, sporadic, smelly--and they are running $17 million in the red this year. Last week a private operator offered to relieve New York of this financial headache, reportedly was ready to pay upwards of $500 million in cash and bonds--give or take a few million--for the $2.1 billion transit system. Said O.(for Oscar) Roy Chalk, 51, able admiral of D.C. Transit System, the national capital's surface lines: "I'd like to prove that private enterprise, with $1, can go 50 times the distance that public enterprise can."

Roy Chalk should know. He has run up a $10 million-plus fortune by making every dollar turn over many times--through borrowing. Son of a Russian immigrant shopkeeper, Chalk grew up in The Bronx (his neighbors were George and Ira Gershwin, and he fielded sandlot grounders batted by Lou Gehrig), rode the subways to New York University Law School ('31). With loans and his skimpy earnings as a young attorney, he bought Bronx apartments at Depression prices, later cashed in on World War II's real estate boom. Typical Chalk deal: in 1942 he bought the 16-story apartment house at 1010 Fifth Avenue (corner of 82nd Street) for $1,000,000, putting up considerably less of his own cash. It is now worth upwards of $4,000,000, and Roy Chalk lives there, has built a suburban-style ranch house on the roof for his daughter's family.

Hoopla Pays. In 1945, with only $60,000, Chalk founded the nonsked Trans Caribbean Airways by buying two DC-3s, and within two years it was earning $60,000 annually. Trans Carib expanded to lift thousands of refugees from Europe to Israel, tons of airmail from Europe to South America, flew charter trips from Johannesburg to Jerusalem. It grew so strong that in 1957 it won a regular U.S.-Puerto Rico route, became the first nonsked passenger airline in 20 years to win scheduled status (TIME, Dec. 2, 1957). Last year Trans Carib (including its major subsidiary, D.C. Transit) earned more than $1,000,000, most of it for Chalk and his wife, who own 70% of the stock.

Three years ago Chalk bought Washington's well-hated, strike-bound transit system from Louis Wolfson, who had milked it of millions. Chalk put up only $500,000 of his own money, borrowed $9,100,000, plus a $3,900,000 mortgage, to take over a company with a book value of $27 million. He started out by painting Washington's buses glaring green and coral, installed shapely stewardesses on streetcars, last summer rolled out 100 new buses (67 of them air-conditioned) in a downtown parade with four bands, bathing beauties, clowns, calypso dancers. Hoopla--and hustling service--paid off with free publicity and profits. Last year Chalk's D.C. Transit System, Inc. earned $500,000, and Chalk finished paying off its $9,100,000 in bank loans--three years ahead of schedule.

Fair Fare? Chalk pocketed enough in these deals to live in splendor. His twelve-room Fifth Avenue apartment is rich with a Rouault, a Dufy, two Renoirs, two Vlamincks; his Washington office is studded with hi-fi and Queen Anne furniture. Chalk commutes between the two places in his telephone-equipped cars (black Cadillac, white Continental), on off hours retires to his 83-ft., twin-diesel yacht. A careful dresser, he owns 70 suits (most made in Europe for upwards of $200 each) and 30 pairs of shoes (most made in Paris for $75 a pair), sports vests with lapels, blue shirts with pleats. Superstitious and a gambler, he enjoys chemin de fer and craps, jokingly claims to make many a decision by consulting the stars ("This is my lucky time of year") or by shaking a pair of brass dice that he regularly carries.

The New York transit deal would be a big gamble for Roy Chalk. His offer has been received cautiously by most of the city brass except Transit Boss Charles Patterson, who favors it. Last week Chalk relaxed his terms by pledging to keep the 15-c- subway fare so long as the city guarantees him an after-tax profit of 6 1/2%. As usual, he was mum about who was putting up the bulk of his bankroll. Grinned O. Roy Chalk: "I'm a poor man --never have more than 50 bucks with me. The big thing is, I know where I can get more."

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