Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-05-22


70 make contract with the Rapid Transit
company, irrespective OF whether the COM
pany Is or Il not willing 60 enter into n
contract which will he fair TO the city"
The underlying principle OF any law
creating public service commission Mr.
Lewis argued, is that the commission should
nave the power TO require public service
corporations to give reasonable service TO
the public at reasonable rates The Salus
bill, ne continued, recognizes throughout
that joint service may often be given by
two carriers and that any adequate super-
vision Of the service and rates OF common
carriers must include the power 20 regulate
joint services by two or more carriers and
also joint rates.
POINTS OF SALUS BILL,
Il have heard the Salus bill spoken or
as unfair to the company" Mr.. Lewis said
Wherein is It unfair? Is II unfair be-
cause 1t enforces an obvious public duty
on inc company? Those who oppose the
Salus bill are virtually driven to this propo-
sition
Where two street railway corporations
or street railway corporation and n
municipality both operate street railway
lines IN Philadelphia. though good transit
service often requires that the two oper-
atorS make arrangements for Joint rates
and joint services, we are opposed 10 CIV
ing the Public Service Commission any
power TO enforce this obligation because
we want TO perpetuate conditions which
VIII require the operation Of all transit
iacllitIes In the city by one operating
company and have that company the
Philadelphia Rapid Transit COMPANY.
IL mas been publicly stated that these
bills are mace bills to force the phils.
delphia Rapid Transit Company TO accent a
lease unfair to it. The actual fact is Just
the reverse
CLUB OVER CITY
The present lack Of power in the Public
Service Commission to fix reasonable Amt
service and joint rates should the city de.
| eide on Independent operation Of the City's
| lines is now club in the hands Of the
| company to force the r r. r, irrespective
Of whether the terms OF the lease are fair
| or not
There Is some Justification for the sus-
| picion that those who object to the salus
bill do so because they want the PhIIadel-
phia Rapid Transit Company to retain that
| Qluh over the city
| NO one can read the proposed lease %
Mr.. Lewis insisted. without realizing
that on It's face. its provisions appear
| grossly unfair"
| Pointing out the proposed lease would
turn over to the =. r. r the citys lines
now planned and any which might be bull,
| within the next nifty years, MIR. Lewis said
| that the gross revenue Of the unified sys
| tenn combining the city lines and the
| in one account
The terms of this proposed lease there
fore require that the city shall turn over
for operation plant costing more than
Sl0O.00O,O0O to the company and that
the entire revenue paid by the travelling
| public shall he pledged 10 pay. first
every dollar of expense which the COM
pany may be under and 3 per cent divi-
dend on the stock before the city receives
one dollar.
ON wATERED STOCK
Mr.. Lewis got down to the question o
watered stock He pointed out that th
great bulk Of the p. K It's fixed charge
is made up Of rentals which the compan!
has obligated itself to pay TO the stock
holders Of it's subsidiary companies
These rentals amounted last year t
S7550.ll5. This represents G per cent o
4, capitalization Of $l25,S35.26O," he said.
The actual amount paid in by the stock
, holders Of the subsidiary companies on thei
, stock is $56,46l,37S. Assuming that tn
amount paid in on the stock represent
money which actually went into the dc
, Velopment OF transit facilities--a most lii
eral assumption in view OF the history
street railway corporations in Philadelphi
the difference between this sum an
Sl25,S35,26O. or $G9.S73,sP2, is water
"And the Interest on this water while
D the transit company has obligated itself
( pay annually Is S4,i6a,433."
. The per cent dividend to be guarantee
- to the p. r. T. stockholders under II
lease is cumulative, Mr.. Lewis reminde
the committee, III there is not enoug
| left from the gross revenue to pay N
dividend in any one year after paying Il
| fixed charges of the company. the deflC
: is TO be made UP out Of future earning
e before the city receives anything"
Mr. Lewis referred to the provision thi
...r a Al.
i revenue is not sufficient to meet all pri,
e charges any pay five per cent Interest {
y the stock the company may make chars
| for transfers between the citys lines ar
the cOmpanys lines, sufficient to bring 1
+, | the total income. At the same time,
charged, the lease makes a direct atteml
E to deprive the Public Service COmmissiC
d of the right to lower the hve-cent fare (,
the next nifty years.
FAIRNESS FOR CITY
e "A roseate dream" was Mr. Lewiss d.
j. scription Of the belief that the authorize
d hlgh-speod lines can he built and on a hv
:, cent fare with free transfers make the il
4 | vestment pay.
The sooner we awake and face the rel
facts the better" he declared The be
proof that the officers Of the company {
not believe that Mr.. Taylor's hopes can
y fulfilled is that they are unwilling to on
n the city a lease in which they share Il
e risk of loss Under the terms Of the leas
e not only would the citizens OF Phlladeph
e fail to get one dollar from the operate
& of their high-speed lines but they wou
n not even have the satisfaction Of seCurir
e free transfers.
The total net loss 10 the city for Il
X fifty years Of the proposed lease, Mr.. Lew
t, asserted, would be S23G,49O, 900. The stoc
e holders of the company, he added, wou
:, get in the same period S92,3S3, 900, al
= the stockholders of the subsidiary companle
S36l5l6,OOO.
- "Of this sum TO subsidiaries, sl00, 40 Oi
would be II payment on water"
Referring to T.. r, Stotesbury, Chairmf
\ of the executive board of the transit cor
~ do not charge that the lease Is p
forward in bad faith, Indeed l will
- further and say that | personally belle
a that Mr. Stotesbury and his associates a
;. merely doing what you or ! In their positi
J. would do They are suggesting lease {
terms Of which will insure beyond pos!
blity of doubt that the earning capacity
their company will always be sufficient
pay five per cent dividends on their stock.
WATER" COSTS 100000
THE sum paid annually by the compa
on watered stock amounts TO virtual
$4,000, 900. II the company could pay Il
81 OOO, 900 to the city as rental for the cit!