The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1908-05-21
GERMAN N, O. THEORY
Public Utilities Operated by Cities
Must Pay Their Way.

They Don't Always Do This However
Because Not Enough Is Charged Off
to Depreciation and the Plants Don't
Have to Pay Taxes-"Undertakina
Limited to Localities Where the Pat
ronase Will Be Large.
In theory public utilities operated by
German cities must pay their own
way. This theory is not, however,
fully borne out in practice. because the
allowance for depreciation is frequent
~ inadequate. and the plants are not
required to make good the taxes for
merly paid by the companies they SUI
perseded But the effort to put these
services on a paying basis has resulted
in limiting the various undertakings to
districts where they are sure to pay.
On the other hand, when these utilities
are operated by companies the same
restrictive results are noticed, because
almost without exception the fran
chiSes are so weighted down with pro-
visions for payments to the city and
are at the same time of such short
be warranted in extending the service
beyond the districts in which they are
sure to pay at once.
Professor Hugo Il Meyer in recent
articles in the Electrical Railway Re-
view and the journal of Political Econ
omy describes the results of this re-
strictiye policy on street railways and
electric lighting, and the following
facts are taken from his articles:
The cities that went into the street
railway business adopted uniform
fare Of 2.5 cents, but with two excep-
tons abandoned this after short trials
The experience of two typical German
cities will prove of interest as showing
what high rates are charged when
cities attempt to operate utilities on
paying basis.
When the city of Cologne took over
the street railways the fares charged
were 2.5 cents for distances up to 1.5
miles and 3.75 cents for the maximum
distance, Go miles. After operating
them awhile the city authorities raised
the fare materially while extending
slightly the minimum stage. The pres
ent charges are % cents for 1.9 miles,
3.75 cents for $40 miles, 5 cents for
5.63 miles and $50 cents for distances
over 5.63 miles
The city of Dusseldorf, which &C.
qufred its street railways IN 1900, at
tempted to operate them at the uni
form fare of 2.5 cents. which had been
charged by the street railway COM
pany, but soon found that it was losing
money and limited the 2.5 cent fare to
IA miles, charging 80 cents for dis
tances between that and 4.25 miles.
After increasing the track mileage the
city again raised the fare considerably,
reducing the minimum stage. The
prices now charged are Is cents for
1.5G miles. 30 cents for $40 miles, 5
cents for miles. 60 cents for 4.75
miles, rs cents for 63S miles. S.75
cents for 10 miles and 10 cents for
1874 miles
1t should he borne in mind that these
prices are really very much higher
than corresponding rates. would be In
this country. because wages in Ger
many are much lower than in the Unit
ed States The exoriitance Of these
charges is shown by the fact that in
Minneapolis. Il city of the same size
as Dusseldorf. passenger can ride
thirteen miles for :: cents, while In
Buffalo. which has a population about
equal to that of Cologne, the passen-
ger gets fourteen miles for a nickel.
The desire Of the cities to make all
f.t - fysor 0nhi
to limit tl<em to short terms has re-
suited in greatly delaying the develop
ment Of public electric lighting, al
though tine people were anxious to
have the new lights installed. This Is
shown by the fact that in 1S94-95
there were in operation in factories,
stores, etc. more than 4,776 private
electric light plants. although two
years later there were only little
more than 800 central electric lighting
stations in the whole Of Germany. AS
the private or isolated plant, as it Is
called in this country. is far less eco
nomical than the central station, this
restrictive action Of the German cities
has thrown a great burden Of cost on
its progressive citizens. The situation
is the more remarkable because at the
time of the introduction Of electricity
for lighting and traction purposes Ger
many was far better equipped to per-
feet and develop these systems than
was the United States, yet it has been
completely outstripped by our own
country, chiefly if not solely because
here private ENTERPRISE has been given
a comparatively free hand.
In closing one of his articles Pro-
lessor Meyer says:
''The unwillingness Of the cities to
suffer financial losses on behalf of the
congested city populations after those
cities had denied those congested pop
ulations relief at the hands of profit
seeking companies is in instructive
contrast to the eloquence with which
the advocates Of purchase by the cities
had denounced the dividend seeking
comma niaS