Every evening, Wilmington daily commercial., 1918-05-18
QUESTION OF INCREASE
Of TROLLEY ROAD FARE

Board of Pubic Utility Commiseioners.
| Wilmington. Del, Dear RirH Mr.. r. w
| Wilson. vice president and general mana
per of the Wilmington 4 Philadelphia
| Traction Go aaks mo to write YOU n
| letter requesting you TO give immediate
| and favorable consideration to The arpli-
cation of the traction company To- increase
its rate of fare IN this city from 30 q
| cents
| submit for vour consideration that
your decision Of this important question
will have an effect which may renrh Tar
| into the future of the community as re-
| cards its relation to what ia perhaps lts
moet important public utility
II this not the time to settle the ques
ton not alone from The standpoint ~
present expediency, but also with a view
tn the distant future when. as many auticl-
pate. Wilmington may have grown into
| a large and important industrial center
| with greatly increased population whfee
| welfare wiil depend, ~ most irnpntant
| degree. upon lts transportation facilities
Nav suggest the aslvisabilIty of cUn-
| siderinr nj this crucial moment the ques-
| ton of a now franchise for The traction
company sornewhat after the Cleveland
| or the Chicago model. whereby the
traction company will be assured of
| A fair but moderate rste ~ interest
| on y valuation tn bc agreed upon between
tho city and the traction company. &C we'll
as upon fair valun of any future i'm
provpruents or extenaions and in addition
tn the interest upon such agreed valuation
| Z 4 fiYed share fE0 per cent or lpssl of
| the not profits over and above tho interest
| on the agreed valuation, the remainder nf
! the net r,rniits going 20 the citY as a direct
| nayrnput. nr az in Ieveiand taking the
/ form nf an automatic reduction N the rate
/ pf fare whenever tho cltvs share NJ the
| not profits il sufficient ~ effect such re-
| ductinn
/ : onvereelv whenever the not profits
| ar mot aufiicient tn pay the interest tn the
/ traction company on the agreed valuations
| tho fare would be automatically Increased
| until surplus of net profits ernerges suti-
| cient 20 again effect an automatic re-
| ductron in tho rate ~ fare
Tho effect If some auch franchise agree-
nent assuming tho proper valuations 10
le fairly adjusted IN the beginning. would
| he - To give the traction company
every ,oducafnent for efficient service ~
| All times. ~ to make the rity 2 partner
/ with tho traction company and thereby
| tn share lta fortunes. reapIng The henetlt
| ef ,te aucreaa ~ aitornatic adjusting
{ the always vcxing prohlrTn 81 the rate ot
fare. and 4 adjusting for Years ~ come
many ef the most troublesome problems
of The relation nf the traction company
not alone tn thu city q municipality. btt
alen the relation of the traction company
tn IT, patrons
In a word. IL should be possible ~ some
| way fn effect an arrangement which, on
| the basis af the cooperative prinrIpin. wall
| make tho interests ~ the people, the city
| and the traction company more or ess
identical, 90 that none can proht ~ the
expense of The others. but only Ivy benefit
| ing all parties to the agreement.
Mr. Wilson points out IN has letter
| which | presume has bcen sent "a many
| cltIzens. that during the first three months
| of th,a year. the Delaware operations nt
the traction company resulted IN a loss OF
more than s55.tno.
In making thus calculation ot loss ! do
| not know whether Mr. Wilson had refer
eure to a net operating loss. TINT IS. %
the difference between the gross revenue
| and the operating expenses, or 10 the net
loss which resulted after de'luctlng inter
est on outstanding obligations rentals. etc.
rf IA | assume, the 500 ,000 represents
tho loss after deductlng bond interest,
rentals. etc the question arises rs TO
| what part of the interest and rentals
represents the interests on actual invest
nent and what part, # any, represents
| capitalization profits.
10 the extent that the interest and
rentals represent not the interest on
actual investment, but capitalized protta,
IT Is an open question as - whether The
loss should fall upon the public or the
owners OF the property.
1t seems to me. however, that It might
be a grave mistake to try to decide the
question At issue merely on the basis OF
present expedIency and solely 10 meet the
existing emergency, Once the rate Of fare
Is raised, at may be difficult To reduce It
again. IT may continue until alter
operating expenses have declined. with
the result that the profits Of the traction
company may be greatly increased those
increased profits may be capitalized in
one way or another, and II may then be
impossible to reduce the rate OF fare with
out causing serious loss 70 innocent holders
Of securities who may have purchased
them on the basis of the enlarged earning
power resulting from the increased rate
Of fare
May urge YOU. therefore, If it appears
desirable to YOU to consider increasing the
rate OF fare at this time, not to do so
without also giving grave consideration
To what seems To me to be one OF the most
vitality important questions as 10 the
future of the city, namely, the question
of n new franchise arrangement, as above
suggested which will not merely meet
the existing emergency, but what is even
more important, will SO adjust the re-
lations between the city and the traction
company as to result. for many years TO
come, in a more or less automatic adapta-
ton Of the operations Of the traction com
pany To the welfare and interest Of the
community. Respectfully submitted,
Philip Buruet.