Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1909-02-06
HIGH FINANCING BY A CITY.
Mayor Johnson's Practical Application
Of the Principle Of Heads. I Win;
Tails. You Lose

Mayor Johnson's Practical Application
Of the Principle Of Heads. Win;
Tails, You Lose
If the people Of Cleveland had known
before the referendum all that they
now know IN regard to the Municipal
Traction company the majority against
a continuation of municipal manage
ment would un~questionably have been
many thousands instead of 600. For
instance, In its effort to show its sol
vency the officials Of the company
claimed that they had made a certain
amount of betterments. one such item
Of $4,000 has already been shown to
have been q duplicate charge for prop
erty acquired under the lease. 1t was
also brought out I'm court that favored
insiders were permitted TO unload
their stock through the private stock
exchange at a price fifteen points
above the ordinary market price. the
stock thus sold being guaranteed re-
deemable at par. This guarantee" not
only became yalueless as soon as the
referendum was held, but would prob
ably Q 0 have been valueless In any
case. as the court has held that tle
road WAS being operated at q heavy
loss.
But the worst revelation was In re-
lation TO the Pay-Enter Fare Box com
pany. This company was cr@anizeG
with a nominal capital Of $4,000 to
manufacture a new type Of 'pay-en-
ter boxes. According to Mayor John
sons own testimony. he had paid Ia
only $1,000 on account Ct hi@lSelf and
President du Pont of the Municipal.
who was TO become owner If one-half
the stock when he paid $1,000 10 May
or Johnson. Meanwhile the expenses
of developing the company, including
perfecting the box, were borne by the
Municipal 10 the extent of $4,000 or
$4,000, of which $4,000 was adj
yanced before that company was even
Incorporated. As compensation for its
risk the Municipal was to get IT'S boxes
at c~ost-if they proved successful. 1t
was admitted that If the box was not
4 success or the company failed the
Municipal would lose IT'S investment.
while If the company succeeded the
profits would go to the stockholders,
Mayor Johnson and President du Pont.
Comment seems needless.
While Cleveland was demonstrating
that good service was Incompatible
with three cent fares, even In a city
where the average ride is as short as
1t is in Cleveland, Chicago was con
tributing evidence OF another sort. 1t
the end of the first year of virtual
partnership between the city and the
traction companies the board of SUI
peryising engineers analysed the re-
ceipts and found that Of every nickel
224 cents was paid out TO wage earn
ers and Iii cents was paid for ma
terlal, supplies and management. In
other words. every ride cost the COM
pauies 3.38 cents without considering
Interest on Investment or taxes. which
amounted to 0.S7 of a cent. This
shows that In a city like Chicago,
whether the ears are operated by q
company oil by the city a three cent
or ever a four cent fare is out of the
question unless the wages of conduct
ors, motormen. etc, are heavily re-
duccd. 1t IS the low wages paid to
employees which. together with alb
sence OF transfers. make possible the
low fares of European street railways.