The Washington times., 1914-05-15
STREET CAR FINANCING.

! President King, OF the Washing
ton Railway and Electric Company
! has presented his views on public
/ ownership of the street railway lines
| of Washington. He is fearful that
the public credit of the community
will not sustain the loan that would
have to be made to acquire these
properties. and intimates that while
they are now capitalized at S51 ,000,-
600, it would cost very much more
than that to buy them.
That, we take it, would depend on
who fixed the price at which they
were to be bought. 1t may be con-
ceded that if the gentlemen now
operating and controlling the sys-
TENS were asked to name their price,
they will make it pretty stiff. though
it will be doubted if they would Sc
riouSly name such a preposterouS
figure as Mr.. King suggests. But
the valuation is going to be made
from the viewpoint of the public's
as well as the companies interests,
and it will determine what the prop
critics are worth, not what the COM
panies would like to get for them.
Mr.. Kings impressions as to the
credit Of this community, and its
marketahility, if placed back Of a
street railway bond issue, will not be
very generally indorsed. They run
counter to experience everywhere,
ard to common knowledge of the
factors involved. If the street car
systems, operating under indetermi-
nate franchises that may be ended
by action of Congress at any time,
can sell securities at 1 per cent, why
in tn world should the public, which
would pledge both these properties
and the taxing power as security,
be compelled to pay ) per cent? 1t
is quite beyond reason.
Mr.. King is unfortunate also in
comparing the waterworks of Wash
ington with the street railways. He
points out that the waterworks have
no bonded debt; pay no interest at
all. That may be to their discredit
in the mind of Il street railway mag
nate, but it is not in the public's
mind. The public would like to see
al its public utilities placed on such
a basis that there would be a chance,
some time in the future, to operate
them free from capital charge. Pub
lie ownership is the only plan that
gives any promise of achieving this
end. Public ownership of public
utilities is always based on the gen
cral program Of keeping debts as
low as possible, and progressively re-
Gucing them. Private ownership, in
actual experience in this country. has
invariably had the opposite effect;
it has seen capitalization and indebt-
edness piled up as fast and as high
as the earnings could possibly sus
tain them. That is true of all the
various classes of utilities. and no
better illustration could De found
than the very street railway COM
pany Of which Mr.. King is the head.
Government supervision is Just
about the ideal of Mr.. King, as of
CHER public utility magnateS who
find themselves called to oppose pub
l.. ownership. We could have more
confidence in the purposes Of these
gentlemen If they would permit an
occasional regulation to be put into
effect without a fight in the courts.
For instance, Nj. King and the rest
Of the street car magnates here
would have served their own pur-
pose cxcellently if they had agreed
several years ago to establish a uni
vcrsal transfer system. They re-
fused to do it. and now they are pre-
pared to fight it whenever it is order
ed by the Public Utilities Commits
sion. They will oppose regulation
whenever regulation is seriously at
tempted, and then they will favor
regulation-in theory oniy-when-
ever public ownership is talked
ABOUT!
III, fact is that it is too late for
these gentlemen to become converts
to the idea of public supervision.
They were opposed 20 it too long;
they are too deterr,inedly opposed to
it's actual application now.
Washington people need not, and
will not, he affrightcd because such
vust figures are fnuntsd before
them, with the suggestion that the
community is about to be bankrupt
ed hy q huge debt for buying the