Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-03-17

we would have to suffer because we were
paying too big a rent to the Union Traction
Company. and under no circumstances
would he approve greater assured return
than fve per cent.
There Is no use going over the whole
negotiation. 1t lasted a month. The result
was we were made to give up all claim
Tor accumulated dividends under the 1907
contract-about $4,000, 900 we were limited
TO hve per cent on our actual cash capital;
our share in the future of the combined
properties was restricted to one tenth. and
then to cap the climax a recapture clause
was inserted to protect the city in case 1t
was found In the future were making
too much money. We fought against that
hard but as Mr.. Taylor said he would not
approve the contract without 1t we took our
medicine AS we were giving up SO much
We asked that the five per cent should be
assured to us against possible contingencies.
of course, it was agreed that the whole
arrangement was subject to an audit of our
accounts showing that we were making the
money that we claimed to make. and in
| view of the concessions which Mr. Taylor
| had got from us, he approved of the pro-
vision for temporary transfer charge, IL
| needed to protect the minimum amount
| which had been accorded to us.
The proposition was then formally sub
| mitted to the Mayor and the chairmen of
| the two Counclmanic committees. Mr. CAN.
| ney and Mr.. Seger, at conference, to which
| the Mayor invited also Mr.. Twining and Mr..
| Taylor. 1t was received with approval by
the press of this city. The next thing to
| do was to draw a formal contract. and II
| was suggested by the Mayor that we follow
| as far possible the form already before
| Councils. month later we submitted the
| contract. 1t was checked throughout by
| Mr.. Taylor 1t does not devlate in any
way from the terms of our OFFER
REPORT ASKED
Now what has happened in the last two
| months? The Mayor asked his Director for
| report on how this contract would affect
| the city. The Director stated he could not
| make this report until he received the audit
| Of the company's books. already authorized.
and an analysis of the contract to be made
| by firm Of expert railway engineers. So
| Ford. Bacon Davis were again employed
| by the city. and before either the account
ants or the experts got to work we began
| to hear insinuatitns which became
| stronger as the days went by-that our
! books were not right (Mr. Twning) that
| our stock was all water (Mr. Fluck) that
| there would be a deficit to the city Of
| s5.000.0 900 a year (Mr. Twlning), or even
| s7,00O,00O (Mr. Ryan, that it would mean
| an increase in tax rate Of a dollar (Mr.
Ryan, that there ought to be seven
| cent fare on the hgh-speed lines Colonel
| Potter) t; that the city was paying $41,O0O.-
| 900 to get rid of the exchange ticket which
| the company would put back in six months
| (again Colonel Potter) that there was a
| niger in the woodpie (Mr. Hancock) and
| that the City was going to have to pay for
| the equipment twice duet by Mr.. Twning
| and Colonel Potter). Have I overlooked
| any of these little pleasantries?
NOT MUCH TINE
"Ten minutes isn't much time to get
| through these barbed-wire entanglements,
| but will do my best.
First. Our accounts. Messrs. Lybrand
| Ross Brothers e. Montgomery are at
present auditing our accounts. Their re-
| ports will show you that our statement of
earnings is correct. Fortunately. when Mr..
| Stotesbury took charge of this property in
| 1911. in order TO avoid any question in the
| future as to the proper amounts that were
| being charged for maintenance of the prop
| erty and replacing equipment, he sent a
| letter to Councils definitely dealing with
| both subjects. In that letter he stated that
in addition to setting aside a million and
| half in cash and securities, then on hand
as a special reserve, the company would
| each year take out of its gross receipts for
maintenance, and charge to operation.
| whether spent or not, fifteen per cent of
| those gross receipts. He also stated that
| the company would purchase during the
| next five years 1850 new cars and that
half Of this purchase would be met from
current earnings and charged to operation,
| At the same time the company adopted a
new balance Sneet ana system OF account
| ing which had been prepared by the citys
| auditors, Messrs. Volum, Fernley Vollum
| G. Rorer, and the same were approved by
Councils.
Now the fifteen per cent has been set
| aside each year and charged to operation.
| but it has not all been spent. AS a result
| of the policy which Mr.. Stotesbury stated
! to Councils the company now has on hand
| in a special fund. in cash and securities.
which it will spend upon this property
when need arises and construction and
material prices are normal $2,175,OOO
Instead of buying 1850 new surface cars
| over a period Of five years, we bought 1900
new cars within two years and a half. They
cost s7177.4s2.s6. Already $S.51O.83s.37
of this amount has been paid out of cur
rent receipts further payment will oe
| made on May l next. which will complete
| the payment of half the cost out of earn
ings. There isn't another street railway
| company in this country that ever took
| $500,000 year for six consecutive years
out of earnings and put 1t into equipment.
Second. 1t is charged that under the
| contract the city will have to pay for the
equipment twice. Mr.. Twining has stated
| this Mr.. Potter and MIR. Hancock have re-
| iterated 1t. and read in circular sent out
| in the name of the United Business Mems
Association the following:
"In addition. under the proposed lease.
the ,ity Of Philadelphia pays the Philadel-
PHio ANaPiu AiaHsit Sonpdny ior undHcihB
| the equipment at the rate Of six per cent.
| This plan for equipment continues for the
period Of fifty years, and at the end of the
| period. II the city desires the equipment re-
turned to It, then 1t must purchase the same
from the Philadelphia Rapid Transit Com
pany. Notwithstanding that II has already
| paid for 1t, and further. that It has also
/ paid for new equipment to replace old
| worn-out equipment which the Philadelphia
Rapid Transit Company had at the begin
| ming of the lease.
| A SERIOUS QUESTION
| II want to ask seriously the members
| of that very important organisation which
has done so much for the city of Phila-
| delphia in the past how It comes that
they permit their name to be used for this
| and other Misrepresentation of fact con-