Evening star., 1919-03-28
CITY AND TRACTION
ASPARTNERS,
Move to Cure Company Ills Is
Suggested by Roger W.
BabSOn.
DIVIDE AFTER D,VIDEND

/ Extend the principle of the half
and half" plan, under which the fed
eral and District governments jointly
assume responsibility for the National
| Capital, to the operation of street rail-
way service in Washington; make the
traction interests and the city part
ners in a "fifty-fifty" agreement, with
the net earnings to be divided equally
! between them.
! This suggestion as a possible cure
for street railway ills here is advanced
| by Roger w. Babson Of the Depart
| ment of Labor. Other methods 1or
| improving the situation have been
submitted by Mr.. Babson to the Pub
| lie Utilities Commission for consldera-
| ton in connection with the appllca-
; ton of the Washington Hallway and
! Electric Company for financial relief
! The plans include municipal owner
; ship service ce-at-cost and the Currler
method of sliding fares and dividends
! He characterized the hrst two . a.,
! tending eventually to uneconomfcal
operation,
F.; Discussing the advisability of the
! government making the loan to the
street railway company TO assist IL
! out of the financial difficulties or of
a partnership arrangement, Mr. Bab-
| son said today:
Must Give as Well as Take.
| ITO have satisfactory street rail-
way service in Washington, both the
! people and the companies must be
willing to give as well as take. rms
| means that, unless municipal owner
! ship or a service-at-cost plan, or the
| Currier method is adopted. then some
| form of partnership between the pub
! lie and the companies must be IN
| ausurated. This could be done by
| having the District loan the compau-
. les money or by adontinS the ChicaSo
| system, which provides for II division
of the profits.
; 1T seems as if congressional lc%iS-
lation would be necessary in order Tor
the District to loan money TO the
Washington Railway and Electric
! COMPANY, especially as the Capital
! Traction Company is not in need OF
! funds. The conservative members OF
! Congress seem to be opposed to Dis
trict aid because they claim 1t Is
socialistic; while the more democratic
members seem to be opposed because
! it would be helping the corporations.
| There is also strong feeling against
he Washington Railway and Electric
| Company on account OF It's FORMER
! attitude toward labor
! "Therefore, a loan of public funds.
| or even guaranteed securities. seem
| somewhat out of the question for
| the present.
Suggests Partnership.
The only other form of relief
! which seems practica. would be to
| have a partnership arrangement en-
| tered into between the companies and
| the District BY such an arrange
| ment the companies would be allow ed
! u dividend Of say, ) per cent on their
| stock with the understanding that
! the net earnings over ana above TINS
! amount would be divided hfty-hftN
/ between the company ana the DIS
| trict. Such a system requires impair
! tial accounting. Companies working
| under such d partnership tend TO put
/ SO much back into the property that
! here is never any excess TO olNiu".
! This principle is all right. provided
| there is an increase OF STOCK COM
| menSurate with the excess put back
/ into the property. and that arrange
| mentS be made so that the l)lstr!c'
/ will receive for itself one-half of such
| stock increases. In such n ease the
people would be pretty sure - a
| least one-half of the excess profits
! received from fare increases would
| come back to them.
"Most Practical Suggestion"
perhaps the most practical method
I of handling the situation al the pres
ent time would be along the lines Of
the national banking system. In tn"
case of the banks. private interests
are the stockholders and they are
! given a certain maximum and mini
mum leeway between which they can
! work. The capitalization always
| represents real money and an effort
| is made by the government to enable
! the banks to make a fair rate OF m
! terest on this money and lay up Il
| surplus besides. In return. however,
for this government aid, the govern
ment makes a very careful eNamina-
! ton of the banks and has close
supervision over them This is rrl-
| marily in the interests of the pun
, lie, who are depoSitors in the bank
rather than in the interests of the
! stockholders.
| Gould not our Public Utility Com
missions approach the street railway
problem in the same spirit that tht
| Oh rollers Offices approach the
(; banking problem? Their principal
| purpose would be to protect the riding
public; but they would constantly
! keep in mind that such protection
| depends upon a safe. sound, and
Profitable street railway system"
I! Yeomen (F) Drill at Quantico.