Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-11-01
Street RAILWAYS
PROBLEM
P. H. Gadsden Says Whole
Structure Has Broken Down
Under Strain.

81. Gadsden, chairman Of the national
committee on public utility conditions
and resident Washington member Of
the war board Of the American Elec-
trio Railway Association. spoke at the
annual meeting Of the electric railway
war board here today. He said. in
part:
'The whole structure Of the fran
chise relationship between electric
railways and the various communities
has broken down under the strain Of
the war. The rapid increase in the
cost of all material. tho extraordinary
demands of labor made necessary by
the rise in the cost Of living, the
alarming decrease in the purchasing
power Of the nickel. have brought the
electric railways Of this country face
to face with bankruptcy.
Practically every other industry
except public utilities, whose rates
are regulated by law, has been able
readily to adjust its method of doing
business to meet the war demands
and the radical increase in the cost of
been promptly reflected in the SELL
ing price, and so passed on to the con-
sumner. In all other departments Of
our commercial and industrial life
where the economic laws Of supply
and demand have been unhampered
increase in the cost Of production has
been taken care Of in the perfectly
normal way Of increased cost to the
consumer.
Public Is Blamed.
1T is only In those industries where
the public has attempted to fix just
and fair price for service rendered
and where the artificial standard has
been substituted for the natural one,
that we find this complete breakdown
under war conditions.
Industry generally was never so
prosperous, Notwithstanding the in
crease in the cost of labor and mate
rial: The public utilities, and espe-
practically the only exception to this
rule OF prosperity. They, on the con-
trary, are steadily being destroyed
by the war.
"a tabulation of sss electric rail-
ways. representing over So per cent
States. shows falling off in income
of 81 per cent for the first six months
Of 1918 as compared with the corre-
spending period of last year. Many
of the companies are facing an actual
operating deficit in spite of the in
wages established by the National
War Labor Board in cases already
decided, when applied to the indus
try generally, will add over $780,
100000 to its already greatly in
creased operating expenses.
LAS consequence of the rapidly
mounting costs of operation and the
steadily declining net income, the
financial standing Of the electric
railways has been seriously affected,
and it is no longer possible to at
tract new capital for the efficient
interest of the public.
1.-The electric railway must stagger
along under the fve-cent fare for
months until its credit is destroyed,
it's service impaired, its equipment de-
Perforated and 1t has become obvious
to the community that it is on the
brink of destruction before its case
has been sufficiently made out to
justify an increase in its rate.
>, Readjustment Problem.
''Of all the problems Of readjustment
which this nation will have to meet
and solve after the war, none will be
more serious or more difficult than
that of the electric railway industry.
IN the 1Snt OF our experience as EN-
phasized by war conditions, 1t Is man
ifest that to insure the efficient opera
ton of the electric railways of the
country after the war there must be
a recasting of the entire basis of the
relationship existing between the
electric railways and the communities
they serve.
'In many cases electric railway
franchises, which had become to be
considered as valuable assets, in the
light Of recent experience have been
proved to be liabilities. Already there
is growing recognition of this fact in
different parts of the country. as evil
denced by the operation at cost
plans recently adopted in Boston, Chi
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