The Goldfield news and weekly tribune. [volume] (Goldfield, Nev.) 1911-1947, 1919-11-15
ENGINEER SAYS
PUBLIC OPERATION
OF RAILROADS
IS FAILURE
CALVERT TOwNLEY OF WEST
INGHOUSE COMPANY DIS
~CUSSES BOSTON ELE-
WAITED CASE

In support of the statement that
1.-THE production and sale of trans
p%ortation is fundamentally like
every other commercial undertaking.,
and subject to the same economic
laws, sor that no great constructive
effort has ever been initiated and
sustained except by private enter
prise, or further that the removal
of the incentive of private gain in
variably kills initiative" Calvert
Townley of the Westinghouse COM
pany, and one of the leading au-
thorities concerning electrical and
mechanical subjects in the country,
has cited the results obtained by
public operation of the Boston Ele-
waited Railway company as an "a
ample which he says has beer an
other plain case of government OPP
Grafton and consequently another
failure"
Service at COST" says Mr.. Town
ley, is a slogan which seems to
have caught the fancy both of the
public and of the trolley companies,
and various plans under that caption
are having their day in court"
This plan,' he says, provides in
effect that the rate of fare shall be
automatically changed from time to
time apd shall onvar cacf of Sarv;co
only. Cost is defined as including
the ordinary operating and main
tenance expenses and also a fixed
return on the capital invested. If
the of the corporation
shall at any time fall below this
cost, the difference is to be made up
by the state.
This plan reads WE'LL" comments
Mr.. Townley, and he continues: ITO
the uninitiated, it appears to offer a
very satisfactory solution of past
troubles because no one who rides
should object to reimbursing the
carrier for the cost of his transpor-
tation and, if the me of the
property are willing to forego all
profit, it is obviously only fair that
they should be relieved from tn.
hazard of loss.
"HOw has the plan worked? The
Boston Elevated Railway company,
under corporate management, had a
five cent fare and although they
complained that it must be increased
on account of the increased cost of
service, they were no given much
encouragement. Since the manage
ment of the property has been taken
over by a board of trustees APP
pointed by the governor, the fare
has been raised by successive stages
until it is now ten cents and am
informed that the road is still oper-
ating at a deficit. Dissatisfaction
has been widespread and a bill has
been passed by the Massachusetts,
legislature establishing five cents as
the standard rate of fare on all
trolley lines within the state and
providing that whenever this fare
may not be sufficient, deficits are
to be paid from the public purse and
funds therefor provided by an in
crease in taxes "What
the people wanted and thought they
were getting was service at allow
price They could not believe that
there was no profit to the railway
company in the prevailing rate and
they accepted the slogan service at
cost thinking to save the profit
which the company had been max
ing.
I'm making this contract the state
authorities seemed ~contentedly ignor-
ant of the fact that ost without
profit to anyone may be consider
ably higher than a price which in
c1udes a profit to somebody who
has an opportunity to share it. That
is to say, they completely lost sight
of the fundamental fact that costs
can be kept low only by a combina-
tion of ability, authority and incen-
tive. While they could perhaps en-
ploy able men, their authority would
be weakened by politics and an in
centive would be absolutely lack
ing"
Cost" says Mr.. Townley, "has
gone up because nobody in the or
ganization gains by keeping it down.
The present invested capital ds made
safe and new capital may doubtless
be procurable for additions and bet
terments but whose capital will 1t
be? Obviously it will come from
the timid or from the man who has
enough already and is concerned
only to keep it. Progressive con-
Sfr,cfivo investment coma9 only