The Washington herald., 1908-04-30
Mayor JohnsOn's Settlement.

The city of Cleveland has entered on
an experiment in the municipal control
Of street railway facilities unique in the
history of American local government,
Mayor JohnsOn's settlement OF the long
and bitter controversy that has marked
the relations of the Cleveland traction
companies and the municipality has no
precedent that viii serve as a guide in
forming a judgment as to its merits or
its value. We must leave TO the future
any impartial verdict on the remarkable
arrangement reached on Monday last
The Ohio law forbids municipal owner
ship of street railways, so Mayor John
son was forced to adopt a roundabout
way OF attaining practically the pro-
hibited object He organized a holding
company, with nominal capital stock
and an altruistie charter. The stock Of
this company is nontrsnsferable, and
is at present owned by five directors
committed to the Johnson Scent fare
policy. Under the settlement just made,
the holding company. known as the Mu-
nicipal Traction Company, has leased all
the street railway properties at a rental
of 6 per cent per annum on their COM
bined capital stock of $4,000 900. To sim
plify matters. the existing street railway
lines, including the Scent fare line
financed by Mayor Johnson. were con-
solidated into single company, to be
known as the Cleveland Railway Com
pany. To secure the stockholders OF the
new company against loss in the event
of failure on the part of the municipal
company 10 live up 10 the terms of the
lease the city of Cleveland granted the
lessor company a so-called security fran
ohise. practically the equivalent of an
operating franchise, the remarkable fea-
ture Of which is that it fixes the maxi
mum fare at six tickets for a quarter.
This means that if the holding company
fails to make good the lease VIII revert
10 the Cleveland Railway Company and
the fares win be raised from 8 cents 10
the franchise limit. Apparently there is
no other provision IN the Johnson settle
ment regarding rates of fare, the Scent
fare which has been adopted being a
matter of policy. and not of legal re-
quirement
lAEit - uUtlll5r Sdlu the tlAF hu-
licitor, in the security franchise to pre-
vent the holding company from charging
the maximum rate Of fare" But for the
present, at least, the fares are to be
3 cents straight with universal trans
fers.
What guarantee is there that the s.
cent fare will be continued by the altruis-
tic company. which now has a monopoly
OF the traction business of Cleveland?
The guarantee appears 10 lie chiefly IN
the character Of Mayor Johnson and the
men associated with him in their unique
experiment The holding company IS not
a Profit-making concern. Tt is expected
20 operate the street railways solely in
the public interest in other words, it is
a corporation with a soul, a conscience,
and fund of patriotism. Safeguards
have been erected to prevent its stock
from falling into unfriendly hands, and
Mayor Johnson himself will become one
Of the directors. Yet such q scheme
lacks something Of securing the public
interest beyond peTadventure, and the
mayor regards it as only a halfway
measure 10 municipal ownership, which
he hopes viii come as soon as the Ohio
legislature viii permit