Evening journal., 1918-06-20

the traction company and their operat-
Ing expenses. and we did investigate
the question Of the economy Of their
operation, and we made such inyestl-
cations as we could. In the absence OF
an appraisal Of the replacement value
OF their property. as to the reasonable
ness OF their fixed charges. From this
rata. being all that we were able to get.
Il was necessary for us TO base our ac-
tlon.'"
"In direct contradiction 20 this state
ment | submit the following results
OF our interrogation OF the Board OF
| Public Utility Commissioners:
"i. The president Of the Board ad-
mitted at the nrst meeting before
Council that he thought the traction
company's stock was fun OF water.
believing this, he nevertheless vot-
ed TO increase the fare from 3 TO I
cents for a single ride and from 5 10 Ga
cents for each OF four rides.
"2. The president OF the Board OF
public Utility Commissioners did not
/ know the amount OF bonded indebted
ness OF the Wilmington and Philadel-
phia Traction Company and the inter
est rates thereon.
% The president OF the Board OF
Public Utility Commissioners did not
know the amount Of the Wilmington
and Philadelphia Tractnon Company's
capital stock authorized, nor did he
/ know tie amounts issued and out
standing Of this stock In either pre-
ferred or common shares and tho
rates OF divldeds thereon.
~ lie was unable TO submit any
comparative record OF the operations
, OF the Wilmington and Philadelphia
Traction Company within the city of
Wilmington for period Of over throe
months. and that during the present
year when the trolley service was be-
/ ing constantly interrupted by failures
at the power plant.
-. An estimate OF operating ex-
/ penses and gross earnings for the year
/ 1918 was submitted although actual
statements OF gross earnings and oper-
atlng expenses for at least three pre-
vlous years were not submitted In COM
/ parisOn.
&c. In the second meeting. which wos
I held last Friday evening, another mem-
l Der OF the Board OF Public Utility Com
/ misiOners testified that he did not
/ know the amounts OF the basic rentals
under which the Wilmington and Phil
| adelphia Traction Company operates
the various street railways I'm this city.
and this despite the fact that sucn
rentals arc a vital and perhaps large
portion OF the total annual operating
expense.
~. The same member testified that
he did not know the amount OF an
nual depreciation which the traction
company charged in its operating ex-
penses despite the fact that this item
Is a vital and undoubtedly large por
ton OF such expense.
IS The same member testified tina
he was unable to determine from IN
, financial statement submitted by Ly
brand Ross Bros. & Montgomery anl
} from the report OF A. ]. Manson wheth
I er the Wilmington and Philadelphia
Traction Company had capitalized tn
value OF the various franchises OF th'
companies Il leased. or whether h'
various companies leased had capital
lied their franchises.
80. The same member testified tina
he was unable TO determine from an
OF the statements submitted him OF
which TO base an increase IN fare
whether the Wilmington and Philadel
phia Traction Company had included
in its statement OF operating expenses
improvements and additions TO plant
which should properly have been
charged TO capital account.
with special reference TO the ques-
! tlOns raised by Council and the public,
not as TO the integrity OF the reports
/ Of Lybrand, Ross Bros. & Montgomery
and A. ]. Manson, but as 30 their use
/ fulness I'm substanliatlng any Increase
[ IN fare, the following comment was
also made by Mr. GarrelsOn: Such
criticism as has been made along this
/ line Is only due 10 inexperience and ig-
norance OF the persons making It, !
am unable TO say where Mr.. Garretson
obtained his experience and where he
obtained his education. IL must be a
remarkable institution. indeed, which
gives TO any one man a monopoly on
/ human intelligence.
From the foregoing statements II Is
evident that the basic elements enter
ing into the necessity for an increase
in fares were not known - the Pub
/ lie Utility Commissioners, and ] think II
will also be recognized that the board
has been unable TO substantiate its ac-
/ ton in the eyes OF the public.
"Within the memories OF every man
| present tonight, the street railway sys-
! tenn operated in the city Of Whining
/ ton has been sold In whole or in part
at least three times. II is perfectly safe
10 conclude that each sale was a prof
table venture for the owners; other
wise such sales would never have been
made.
LET us examine the situation at close
range In order that the Intense public
interest in this matter may be salts
I fed.
A franchise Is an agreement TO which
the public and the public service cor
lporations are parties. The public on
lis behalf give certain privileges and
special opportunities for making
money; the utility, perhaps not ex-
pressly. but by acceptance OF the fran
chise. agrees to develop these privileges
and opportunities in such a way as to
bene0t not merely itself but the people
from whom these advantages are de-
rived
"Iet me quote a few words OF Prof.
Fdw. Sherwood Mead, OF the Wharton
school OF Finance and Commerce OF the
University OF Pennsylvania:
"'There Is a widespread sentiment
that the public service corporations
have not lived up TO their part OF the
agreement. It IS claimed, and generally
believed. that these valuable franchise
privileges nave been capitalized at ex-
cesslve figures, and that unreasonable
rntnc and nrlcns have heen charged 10