Perth Amboy evening news., 1918-07-12
STOCKHOLDERS MUST SHARE
THE INCREASED BURDENS
CONTINUED from page y

wv NV -
the railway company is relieved from
the necessity of providing for the de-
probation of these properties. There
fore, the depreciation reserve of $780,
600 was fixed on the remaining prop
erty.
The company estimated hat The
! gross corporate income for 1918, be-
fore deducting depreciation, would
amount to $685. 62. and tho Utility
Boards figures were $6,255,000. After
making income deductions from the
foregoing Interest on funded debt
and rentals), the company's balance
available for depreciation, dividends
and surplus was estimated at $177,-
ST., and the Boards figures were
1859, 900.
Concerning the coming system the
| following comment is made as to
methods of obtaining additional rev.
enue:
"This additional revenue might be
secured by increasing the fla hVe-
cent fare now charged by introducing
a zone system of charges whereby the
fare should be commensurate with the
distance travelled. The coming sys-
tenn would tend to make the cost Of
the service more nearly approximate
its value to the passenger n would
tend to ecu the maximum revenue
to the operating company at the min
imum equitable cost to the passen-
gers carried. It would also tend to
make the cost per unit of service
more equitable but cannot be re-
sorted to furnish emergency relief
on account of the long delay that
would ensue before such a system
could be developed and eQuitably ap-
Piled"
Because of the fact that this would
operate heavily in assessing the few
passengers who might ride the long
distances, the Board declared its
opinion that the fiat rate fare sys-
on a car mile basis as illogical n
not feasible.
The board also says in its decision
that the leases which the company
holds of underlying companies have
been subject to much criticism on the
part of the municipalities in that h
rentals paid were excessive. The
time is perhaps not far remote when
the entire subject of this valuation
of the properties and adjustment of
rates of this company may be inves-
tigated," 1t is stated. THE criticism
of the municipalities as to rentals
and leases under which the same are
paid, however, seems to require our
comment. Fixed leases are In oppo-
4 u AC6 y ~ 49, t1O
head thereof a utility could secure a
return to which, under proper utility
regulation, It might not be entitled,
and the abuse OF leases Of this char
acter L. more marked where the
lessor and lessee are so correlated as
to be practically under the same con-
troll.
'The same abuses may exist under
leases of this character as have here
tofore been known to exist through
the practice of holding companies,
which abuses u state has sought to
eliminate or curtail through prohibit
tory legislation. To secure the COM
plete advantage and benefit of regu-
iation all charges should be carried
as far as possible by the operating
utility, rather than indirectly by
means Of long term leases of a nom
operating company, under which the
rental paid might be in excess of a
fair return on the fair value of the
property"
The decision states that numerous
witnesses produced by the Public
Service clearly indicated a. their
opinion that the fate rate fare sys-
tenn Is an inheritance from horse car
days and was In no sense q scientific
or proper charge for the service rem
dered. And In raising fares an I'M
portant question would arise as to
whether the board would counte-
nance q horizontal raise of the uni
form ave cent rate without an inves-
tigation of the nature and extent of
the service rendered for the fare
charged and all the elements involved
in such a question.
"Under the present existing five
cent uniform rate some passengers
are permitted to be carried q consid-
erabiy greater distance for the same
rate than other passengers" says the
board. This may unduly discrimi-
nate against the short-haul passenger
or short-rider. and any horizontal in
crease In the fat rate would further
exaggerate this discrimination"
If an intimation from the COM
pany's president, Mr.. McCarter. was
correctly interpreted, says the board,
It can expect with the advent of nor
NAL times after the war an applica-
ton by the company for a readjust-
ment of fares on its lines, and the
matter as to the method of raising
revenue and adjusting rates have
been so fully discussed in the present
proceeding. the board says II would
not be out Of the way for 1t to sug-
gest thai the company make a COM
~prehensive study of the question for
future use.