Evening journal., 1919-09-22

electric railways are designed TO per
form.
It is no longer a question Of what
return shall be allowed TO the owners
1t Is a question as TO what service. II
any, shall be rendered TO the public.
The peculiar conditions sur
rounding the operations OF all public
utilities, and especially Of transporta-
ton utilities, Is the direct cause Of our
{ being before you. Owing TO the COM
! plete system of control and regulation
exerted over MS by the public authori-
ties, which both prescribe our service
and control our rates, we are unable to
readjust ourselves TO changing condi-
tions as every other industry, not so
hampered is readiusting itself on the
one hand we can neither decrease TO
any considerable extent the quantity or
quality Of our product, or, on the other
hand, Increase the price OF this product,
without the consent and cooperation OF
The public. acting through constituted
authorities, which means in the end
That to put into effect measures for our
salvation we must obtain the consent,
or at least the acquiescence. of ;hc
public itself
Mr.. Pardee emphasized the worldwide
lifting Of price levels, the demand Of
labor for a greater share OF what it
produces, the appreeiably higher cost
of everything entering into a transpOr-
taiion service, and an impossible situa-
ton where the electric railways, be-
cause Of franchise restrictions or other
deterrents, must continue TO furnish
transportation at pre-war rates The
solution OF the problem, he said, was as
much matter Of public benefit as
matter OF concern TO shareholders and
operators Of the properties.
Francis II. Ssson, vice-president OF
The Guaranty Trust Company Of New
York:
With the average purchasing power
OF the dollar decreased generally about
hfty per cent. since 1914, IL is impossi-
bic for 2lA cents to buy } cents worth
of transportation; that is the sum and
substance Of the whole situation. The
impairment Of the street railway credit
structure has been brought about
through increased operating costs
coupled with fixed unit OF fare.
Prices Of some OF The most important
material used in the maintenance of
street railway property have increased
3S to i26 per cent. over those in 1911.
Increases in wages, and fuel. the largest
Items i'm the cost Of operation, i'm some
localities are as high as 100 per cent.
over prices prevailing in 1914 In recent
testimony before the Congressional
Committee on Appropriations it has
been estimated that the cost Of labor
and materials over pre-war prices was
50 per cent
THE crux Of the whole problem is
that fares should be fixed on an edui-
table basis that will assure earnings
sufficient to meet operating expense
and pay a fair return on invested capt.
tai Transportation cannot be rendered
at less than cost without the money to
make up the deficit coming either from
the security-holders or the taxpayers,
or both.
"Ihe open question IS whether the
travelling public will continue to deny
to its utilities the basis Of charges
which it accepts in every other line Of
business; whether or not the American
public are willing to pay for service
rendered. Either the service win not
be rendered and tho comfort Of our
people will be denied. or the cost must
be met either directly Through fares.
or indirectly through taxes"
j w. Welsh, statistician Of the Amer
lean Electric Railway Association:
Mr. Welsh put into evidence charts
and tables revealing that 3i5 electric
railway companies suffered a diminu-
tion OF - per cent. in net income dur
ing The year 1918 as compared with
1871 This diminution was largely due
to increased operating expenses. includ.
ing labor costs and increased taxes.
The companies on which the cOmpari- |
son was based he explained represent
more than so per cent Of The gross /
Of all electric railways in the
United states, which fact illustrated the !
comprehensiveness Of the Welsh tables. |
The siatistician also furnished figures |
showing an appreciable retardation i'm |
the growth Of electric railways i'm re-
cent years, these figures also being
on reports Of The 3i1 companies report |
Ing greatly reduced revenues.
Decrease Of revenues, he said. had
been accompanied by lower dividends.
or no dividends at an, while the suplus |
Of Si6.000000 in 1917 had shrunk within |
a year TO half the amount. or approx |
mately sS.0O0OO0 The average dividend
Peturn, Mr.. Welsh testified. is now only |
about three per cent. a return entirely |
TO investors but indicating |
the critical situation in the electric rail- |
way fleld
One OF The tables presented by Mr.. |
Welsh demonstrated that on May 81 |
1919, a total Of 62 companies with a |
mileage of 1912 miles Of single track |
we're I'm the hands Of receivers: that 60 |
with a mileage Of 1863 had /
been dismantled and iunked. and 3s
having 2J1 miles OF single |
Track had been abandoned. The total |
Tor the three classes. nearly 1000 miles, /
represents nearly i6 per cent. Of the
total Track mileage OF all the electric
Of the country.
Edward y. Hurley. former chairman
)f The United States shipping Board
. The United States Shipping Board
Fleet Corporation had occa-
sion during the war to require many
electric railway companies 10 enlarge
heir facilities sufficiently to carry
great Numbers of shipyard workers be
Ween their homes and the shipyards.
We were thus brought intimately in
ouch with the electric railway indus
ry and its requirements on all sea
boards Of the United States. We found
N many instances that the companies
we're financially impotent owing 10 their
having been prevented increasing their
'ates TO a sufficient extent to cover the
increased costs Of operation and 4 rea-
'onable return on the capital already
invested.