The news scimitar. (Memphis, Tenn.) 1907-1926, 1919-01-22
STREET RAILWAY REcEIvERsHIP

In the regrettable receivership of the street railway COM
pany there is the paradox of prosperity being the direct cause
OF bankruptcy. Never before was there such prosperity in this
section of the country, and this prosperity has come, like all
other prosperity, from rising prices, where each man has been
able to add a fair profit to what he sells. But in the case OF the
street railway company, it had to pay more for what it bought
and was denied the right to add anything to the price OF what it
sold-fares. Hence the collapse,
However, it is not improbable that if Mr.. Tutwiler had been
compelled to earn only operating expenses and a lair income
upon the actual value OF the company's equipment, he would
have been able to pay fancy salaries to employees, thus assuring
good service, and run cars often enough to accommodate the
traffic. He is finished engineer and an able operative. hose
who patronized the system before he took charge are still CRATE
full for the vast improvements in the service and relations 10 n
public that Mr.. Tutwiler installed.
But the impression is general that the owners OF the COM
parry have expected Mr.. Tutwiler not only to pay operating
expenses, but also income to them on bonds and stock beyond
the actual value of the plant and equipment, and that this is the
real cause of the trouble. Now ought to be the best time for
this point to be investigated. The city commission, as repre-
senting all the people OF Memphis, should have a competent
accountant go over the books OF the company, and see what has
been paid into its treasury for each dollar OF stock or bonds
issued and what has become OF that money. If good will has
been capitalized, if bonds have been donated or sold tar below
par, and if stock has been sold too cheaply or donated as bonus
the capitalization represented by such issues should be separated
from that represented by actual cash. '"'
Then, also, the purchase by the present company should be
looked into, so as to determine what part Of the payment made
to the old company was for something Of tangible value, and
what for franchise and good will,
Of course, all would be sorry to see any holder of stock or
bonds in the company lose any part OF his investment, provided
he had invested real money for it, but those in charge OF the
public affairs of the citizens of Memphis have a duty beyond the
protection of such investors. 1t is the duty they owe to the
best possible transportation for the least possible money. That
means either public ownership or a private company capital
lied only for what the plant is worth, and assured OF a reason
able profit on that capital when properly managed.
There is no better time than now for the city commission to
secure the information from the companys books upon which it
can act intelhgently when the reorganization or sale of the rail-
way system occurs,
1t is hoped also that the court officials now in charge of the
company will realize that the receivership is not for the sole
benefit Of the creditors o. the company, bvt the people OF Mem,
phis who ride on the cars are the main ones whose interests
should be subserved.