The Washington times., 1913-04-27
THE "CONFISCATION" BUGABOO.

is the Constitution must read the legal docl
ments called forth by the litigation over so nnocer
law as that which, recently passed, commanded tn
exchange of transfers between the street railwa
companies and the Sixteenth street herdic line. w
learn that this law is unconstitutional on half
dozen grounds, the chief of which, stated in variou
ways is that it would take the property of the raj
way companies for public use without compenss
lion. This is the oldest and, even today the mos
effective of all the arguments against public regu
lation of public utilities.
From the beginnings of constitutional govern
ment precedents TO sustain this theory have bee
piling up. Whenever government attempts to com
pei public utility TO do something the utility doesn
want to do, the utility pleads that it is having il
property confscated" In the street car situation il
This town the public authorities have for many year
hesitated to attempt enforcement of universal trans
fers, for fear the matter would be carried into tn
courts and decision secured that universal trans
fers are unconstitutional for this reason. In con
nection with the herdic lines transfer law it is t
mated that the Public Utilities Commission hesi
tates to force matters to conclusion, lest this de
cision be reached.
Of course, this "confscation' is merely construc
tive, not actual and menacing. The Capital Trac
ton Company isn't in any real fear of having it
property taken away from if if it issues transfers
II merely objects to doing anything at all on any
body's initiative save its own. 1t depends as publi
utilities nave depended for two generations past
the tenuous constructions of this ''con6scaton" pro
vision to maintain il private instead Of publ
easily be illustrated.
II has been quite a hobby with public utility of
fcers of recent years to insist that this town woull
he MATTE of 80 had i,ete
Of two. They all concede that consolidation woult
bring universal transfers automatically. Now lie
that 'confscation" proposition be analyzed
Suppose each company has 100 miles of. track
worth sl0000,oo0. 1t would be "coniscation" t,
compel them to exchange transfers.
But suppose they consolidated, and a new
corporation, with S20OOOOOO capital, takes over boti
systems. Then there will be the same 200 miles o
road before: the same 900 of capital a:
before; the same number Of people to ride; the same
number of cars to run Yet, simply because thai
S20000,000 capital is all in one pile instead of two
piles discover that the thing which yesterday was
"confscaton" today is good business plain mat
ter-of-fact incident to running the property!
II would cost no more to have transfers between
the two companies tnan between the various lines OF
one greater company. ..'...,....
If universal transfers meant on the day before
that consolidation, confscaton of property, it would
mean the same thing on the day afterward.
The question is not concerned with diversity or
unity of ownership. Would the present stockholders
and bondholders of the street car companies have
their property or their profits taken away from them
by the universal transfer requirement? Everybody
knows they would not. They would gladly grant uni
versal transfers if they were consolidated. There
would be no talk about confscaton in that case
there would be no confscation in any case.
The truth about this universal transfer matter is
as plain as day. The traction people are going to
fight universal transfers to the last ditch and beat it
if they can. Why?
Go back now to our illustration of the two COM
panes with 100 miles of track and $4,000 900 capi
tai each The people who control those companies
know that the natural, logical development Of the
towns transportation system dictates consolidation
They know that just well the public knows it.
They want consolidation because it means more
profits, greater values.
But they want to have consolidation forced upon
them. They want the public to insist upon it. They
know that tine one thing that will move the public
more than anything else to insist is the prospect of
getting universal transfers.
When the public gets ready to enforce its wish
the railroad companies expect 10 get something out
OF II. They will insist on carving melon. Instead
of putting their 200 miles of track and $4,000 600
capital into pot they will demand the privilege OF
issuing an extra Sl0oO00OO of capital to themselves
That will be their rake-o 1t will be the prize, the
bribe money, tnat the public will give them-if it
fool enough to stand the touch-in consideration Of
getting universal transfers.
Follow this thing still farther, now, and observe
how ridiculous is the 'confscaton" plea. The two
systems consolidated, will be worth S50O0O000 in
stead Of S20,000,000. That is, SlO,000,0O0 will be
added to their value BY REASON OF HAVING
UNIVERSAL TRANSFER CONFISCATION I'M