Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-08-20


which was surrendered by the state 20 the
city as practical subsidy in aid Of transit
developments
TINS state subsidy was granted to tho city
| ~ rphsheratlon OF representations which /
made officially to the members Of the Iogis-
| 'aturc and to Governor Tener tha. the dea.
, clts resultant from the citv's high gnead
| lines would he material. and that STATE aid
to this extent war necessary to helr the city
| meet those deficits.
/ The terms or the Smith lease provide that
! these yearly deficits which will occur during
/ me development period Of the c.ty's high
| speed system shall be saddlod on tho car
! ruers OF Philadelphia: First ny legali2iug
! and bv continuing for many years the lilo
I saHj discriminatory CNcha nge-t icket charge :
| second, by an increase in car fares
| Furthermore, the terms II the Smith
| lease would. during the early years Of
| operation, materially increase the amount
! or these deficits, which would be qaddled
| on the car riders. They would also be
| materially increased by the increase in the
cost of construction. equipment and opera-
tton which has taken place this year and
by any increase IN the interest rate which
the city IS required TO paw on borrowed
money and by any additional tax which
may be imposed this year in the war
revenue bill or hereafter otherwise
CHOICE OF EVILS
The people OF Philadelphia are entitled
10 know that IL the Smith lease becomes
enective the city will be bound thereby TO
leNN upon the car riders of Philadelphia
lnordinately high carfarcs or to vastly cur
taii and possibly abandon its entire transit
development after having entered into a
contract which guarantees to make avail
apie 10 lhe y. u. T. Company out OF car
| lures per cent cumulative dividend on
's stock for period of forty years.
Under this latter condition the p. Il r
company would have its per cent guar
ahtee' the illegal and discriminatory en-
change ticket would he legalized. the car
riders of Philadelphia would become the
lguarantors Of the y. u. T. Company's q
per cent dividend against all the risks of
the street railway business and the CITY
wouId nave gained nothing la return there
for.
WHAT OTHER PACT PROVIDED
II viii be remembered that, under the
Iayior lease, the =. r. r. stockholders were
assured . per cent dividend on their stock
ana the city would have received nine
tenths Of the mainder. five-cent fares and
Tree transfers for the ear riders, enormous
increases IN taxable values in addition To
the State subsidy already gained and the
tlme-savng, comfort and convenience 10
the people.
The Smith lease stipulates that the
p. II. n. Company shall no, he required
To supply the track, third rail- sig
hals, rolling stock, shops. ear barns. etc.
required for the operation Of the ctty's high.
speed system. unless the company is able TO
secure FUNDS for the construction or Dur-
chase OF such facilities at an annual inter
est cost not exceeding per cent in which
event the city may require the company To
supply such facilities. to be approved by
the board hereinafter referred to. The cost
of these facilities at prices now current will
be probably well over $2O,OOOOOO.
IF" THE CITY COULD
tDder the terms of the Taylor lease the
company definitely agreed to purchase and
supply these facilities.
Thus. under the terms or the Smith lease
the city may be forced TO borrow the money
Tor the purchase of the equipment of its
high-speed lines, This provision has been
justified by its advocates ON the ground
that the city can borrow the money at a
lower interest rate than the company. and
thus slightly diminish the interest charge
against tile unified system This argument
would be valid had the city the REQUIRED
borrowing capacity.
The real effect of this provision is TO pre