The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1910-12-09
|W|LL FIGHT TO HOLD.
| FARE TO -FOUR CTS.
Tom L. Johnson's Friends Anticipate
Recommendation By Traction
Expert For Five-Cent Basis.
CLEVELAND. Dec. s.-The Press

CLEVELAND, Dec. 9.-The Press
says
The traction Is boiling again.
President Stanley of the Concvon
set the fire under II by saying ne
can't sell Concon stock and bonds as
long as the maximum rate OF fare
provided for In the franchise Ii four
cents cash or seven tickets for q
quarter
Tractioner Dahl has gone down to
Wall-st. to find out II It's really true,
and II SO, why. II he finds It's SO.
he may recommend that the maxi
mum be raised to Ave cents cash fare
or six tickets for quarter.
City Solicitor Baker and associates
OF Citizen Tom who aided him In the
long low-fare fight, say the Concon
could market its securities under the
present maximum rate II II wanted
to.
f. H. Goff president of teh Cleve-
land Trust Co., and mediator for the
Concon In the original Scent settle
ment, says the maximum franchise
rate must be raised before capital
will help carry the company out OF
the mire.
So there you are.
That no real effort is being made
to market the securities Is charged
by Baker and Citizen Toms associ.
ates, and concurred to as probable
ity at the tractioner's offices. That
mo decided effort Is being made TO
sell them was thought possible by
Con-. But Goff declared that even the
most strenuous efforts TO attract cap
ital would fail so long as the maxi
mum franchise rate Is 4 cents and T.
for.25.
Is Public's interest.
Con. however. declares IL Is of
more vital Importance to the public
that the maximum franchise rate be
raised than Ii il TO the company. The
company can earn per cent, he
points out. and only 8 per cent, what
ever the maximum rate. The public
can conserve Scent fare by giving
adequate security TO purchasers of
ATS securities, thereby reducing the
interest rate required 10 float the
bonds. The saving thus made would
amount to millions in the 25 years of
the franchises life, and these mil
lions would go TO help, not hinder,
| low fare.
Conditions OF operation are too
uncertain Tor capital to be attracted
as long as the maximum franchise
rate is cents or seven tickets for a
quarter" Goff said. For instance,
| ii cost OF labor continues to advance
and cost of materials TO increase. the
operating expense will be materially
increased within the life OF the fran
chise. Another element of uncertain
| ~ has been introduced by the subway
ordinances recently approved.
Must Be Adequate.
Before capital will be attracted TO
Cleveland railway issues, they must
offer as good an investment as can
be secured elsewhere and must give
the investor reasonable assurance
that he will be able to get his money
back.
Lack OF assurance that the pres
ent maximum fare will take care of
maintenance and dividends under all
contingencies is responsible for the
reluctance OF investors to buy Cleve.
land railway securities.
'It is TO the publics interest, not
the company's, that the maximum
rate be increased The maximum
rate as provided in the franchise
probably never will be the actual OPP
Grating rate. But the higher the max
imum is fixed. the cheaper the com.
pany will be able ofinance its re-
quirements.
!. The company's inability to market
its new stock issue is partly explain
ed by the requirement of the Tayler
franchise that il sell at par. Holdings
OF old stock have been kept on the
market bearing the price to from 80
10 SO. Naturally. there is no demand
for the new issue at 100 when stock
can be bought at lower figure.
An increase in the maximum fare.
even though In actual operation
l-could not bring an Improvement in
service except through aiding financ-
ing. All new equipment and exten.
sions must be pal dior from new
stock and bond issues, not from sur.
plus earnings, under the franchise.
While standing ready to oppose the
proposed increase, Democratic ad.
herents OF low fare. who fought un-
der Mayor Tom, will welcome the Is.
que. They see In any effort by Dahl
or the Republican council to raise
The rate. the livest issue for their
campaign to regain control of the
city administration next November.
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