The Detroit times., 1913-06-23
Frederick T. Bancroft Points to
Constant chickering's In Cleve-
land as Example Of Private
Ownership Evils
HUNCH OF DISPUTES HAVE
JUST BEEN SETTLED
City Victor in Main, But Is
Soaked ON One Franchise
Joker"

The dangers of any franchise agree
msnt between large city and
street railway corporation are we'll II
Illustrated In the troubles OF Cleveland
under the Tayler ordinance. accord
ing to Frederick T. Bancroft, consult
ing engineer and street railway ex
pert, who has figured In the street CAL
history of both Cleveland and DetrOi'
IN the last few years.
Mr.. Bancroft, who has just returned
from the Ohio city, where United
States District Judge Killets. acting
az arbitrator OF differences between
the city and the street railway com
pany, rendered q decision, Thursday
night. favoring the city In all but one
OF several contentious. said to The
Times:
1T 10 an open question whether any
franchise can be drawn that will be
satisfactory to both parties for any
length OF time, or that will be wholly
free from 'jokers. Conditions are 80
complex and change 30 rapidly that
the meaning OF the provisions does
not remain the same. AS result
you have continual diffculties like
these just settled In Cleveland.
And make no mistake about the
name OF the thing: any agreement
under which company does business
is a franchise, whether you coll 1t by
that name, or an ordinance, or what
not.
THE street railway problem Is not
one to be approached with predispo-
sition for municipal ownership, Tor an
absolute monopoly In private hanos
or for any other solution. II should
be taken up with an open mind ana
judicial consideration OF the colo
facts. II any particular methed ms
been tried and found wanting, why
should II be tried again unless there
is some special reason to hope that Il
will AT a specific situation.
How has the agreement method
worked in Cleveland under the Tayler
ordinance? To begin with. on account
of the previous Johns-Goff appraisal.
which. by the way. was made for an
entirely different purpose. 1t saddled
upon the street car users the obliga'
ton to pay an income on a stock value
OF $22oOO.000. 6f which about $1,000
600 was pure water. And should the
system be talsaa~ overly the city 4.
must pay the whole s22,00o,0oo.
But to come down to the decision
Just handed down. the point decided
against the city illustrates the prac-
teal impossibility Of framing an
agreement that will not have come
back
This contention related TO some
power houses which the company
wished 10 write off its books and re-
imburse itself out Of earnings. In the
Johnson-Goff appraisal they were put
in at the exaggerated figures OF $4O0,.
900, but when the Tayler ordinance
was drawn. through some accident or
design a provision was inserted CIV
Ing them "A valuation at the cost or
replacement. In the meantime they
were abandoned by the company
when IL found that IL cost two cents
per kilowatt.hour to manufacture pow
er In them that could be bought else
where for onAhalf cent. The equip
ment In them is no longer manufac-
tured, having been replaced by i'm
proyements.
Nov the company puts In a claim
for reimbursement out OF earnings 10
the extent OF $500 900. and 1t is allow
ed. II 10 To be paid In one year. too.
That Ia possible because the ord!-
rance is so drawn that the fare can
be raised TO 10 cents. II necessary. 10
furnish any authorized earnings. II
will not be necessary. however, judg-
ing from the past receipts, even under
q threecent fare"
Most OF the points OF contention ar
bitrated by Judge Killets, according
20 Mr.. Bancroft, were matters In which
the city oficials held rne company
was trying to conceal earnings.
For instance" Mr.. Bancroft assert
ed, they spent rs per cont OF gross
receipts for maintenance and renew
ais. They built up the system from
70 to 80 per cent OF perfect repair.
relaying 10 miles Of track with better
equipment than ever was used in
Cleveland before: bought 300 new
cars, and made many other improve
ments.
"The court decided that the com.
pany could not spend more than Ills
cents per car mile for maintenance
and repairs without the consent OF
the city council. The amount, how.
ever. was increased by Judge Killets
10 121. In doing this the company
has increased the value Of It's plant
about S2,000.000 and so has squeezed
out that much water. The city hasnt
complained for that reason. and DO.
cause In the meantime the company
Gives better service.
IN view OF the much-vaunted ini-
tiative of private capital. an interest.
ing fact brought out In the hearings
was that In the last three years all
improvements made In the service
have come 1t the suggestion OF the
city and none from the company.
"OtheP matters decided for the city
\ were that the company will have to
turn some large and really false In.
surance accounts into profts. anu
must sxpend l1s9. 900, represented by
treasury stock held in trust By Horace
Andrews, president OF the company.
for new equipment without making
any addition to the capital account,
and must add o25.O00 representing In
terest on the amount to the interest
fund.
This running fight that Cleveland
IL having illustrates the dificulties Of
q longtime agreement In street rail
way matters. And Cleveland would
be much worse on but for the happy
circumstances that Mayor Newton Bak
err and somo q his holp4ru have been