The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-12-31
A MODERN FRANCHISE! THE
CHICAGO PLAN

NHICAOO PLAN
No one thing has so much to do with
the conditions in cities as the plan by
which the public utilities are taken
care of. Cities of all sizes, in all parts
OF the country, are scanning the hori-
ION for some method of regulating the
conditions which are working a hard
ship.
The average man has come to see
what he had never thought much
about before, that franchise is a val
liable thing and should be paid for He
has also come to see that the great
problem is to receive return for his
franchise which means something. This
has led to various expedients. In
some cases it is municipal ownership
pure and simple: in other cases, such
as the Philadelphia gas situation the
city owns the plant and the right of
operation is leased to private compa-
ny; another plan has been known as
the Chicago plan, by which the trac-
ton company pays the city certain
percentage of it's earnings. This, Of
course, practically makes the city a
shareholder in the traction lines. The
city further has the option of receiving
this as money paid into it's treasury or
the percentage may be used at any
time in lowering the rates. 1t will be
seen that this gives the city a means
of sharing in the fruits of it's own
growth. The unearned increment is
largely eliminated For when the
city Is sharer in the business it
amounts to most effective regula-
ton which Is automatic. 1t recogniz-
cs the principle that rates fixed for
public utilities are in effect taxes.
When these rates are fixed by the cor
poration (Which is almost always a
monopoly it becomes form of taxa
ton without representation. This
principle is recognized in all modern
franchises. which seek to regulate the
excess profit known as the unearned
increment
The Chicago Plan is working we'll.
and though there are some defects in it
according to those who have made a
study Of it, the main points are salts
factory, and the general scheme is in
excellent working order.
The question is one of great interest
and has called forth general attention.
The Indianapolis Star recently in COM
menting editorially upon the Chicago
plan. gave a general resume of the re.
suit. which we reproduce in full below
Although Chicago is in some re-
spects one of the worst governd cities
in the world. it has made good in other
respects to surprising degree: and
in none more notably than in it's street
railway arrangements, perfected
through the resolution, energy and
foresight of few public-spirited citi
zens. The claim is even put forth
that the traction system of the city
has advanced from last to first place
among the larger cities of the country
within a period of three years. this
having been accomplished through
large outlay and important structural
changes carried out without any seri
OuS interrOptiOn pf or apDOyance fr
traffic.
And it has been a colossal under
taking: for the rehabilitation of the
Chicago lines has involved the expen
diture of $4,000. 600. the reconstruc
ton of 80 miles of track. the purchase
of more than loco new cars and the
erection of several car barns and ma
chine shops. While all this has beer
going on the street car companies have
been paying into the city treasury 8
tidy sum as the share of their profits
due the city by the terms of the trac
ton settlement effected in 1907. A,
this juncture Western capital comes
forward to invest millions for the con.
troll Of the properties with view te
unifying and developing the system
further
THE pertinent moral has been drawn
from this that the operation of surface
lily ruinous. as some New York finan
ciers would have the world believe: fol
in Chicago for the last three years The
street railway properties have beer
conserved and managed economically