The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-20
TAFT PAVORS HIGH
ELECTRIC RAIL FARE
Tells Federal Board Wages
Paid by Public Utilities
Are Too Low.
OPPOSED TO U. s. CONTROL
Services at Cost System Of
fered as a Relief-Commis-
sion Needs More Funds.

Former President william H. Taft APP
peared yesterday at the opening hearing
Of the Federal Electric Railways Com
mission appointed by President Wilson
to inquire into the electric railway ait
ustion throughout the country. with
view to making recommendations for
the relief of the companies from the
financial burdens resulting from the In
creased cost Of labor and material The
hearing was held in the offices Of the
Public Service Commission and was at
tended by representatives Of the various
| electric traction lines in Greater New
York.
| Mr.. Taft made II plain that he spoke
neither as a financial expert nor a. q
railway man, but was present only to
give the commission the benefit OF his
views acquired as joint chairman Of
the National War Labor Board. Mr..
Taft said that with his colleagues on
the board he had come to the conclusion
that In public utilities generally the rats
of wages paid was below what 1t should
be, but that where the board had made
recommendations OF increases based on
the financial status of the utility af-
fected II frequently was found that while
the State public service boards were
| amenable the local councils were usually
distinctly hostile to any suggestion for
| Increased fares to meet the added cost
| Of operation.
Mr.. Taft agreed that this hostility
was largely due to the stock watering
by the utility companies. but gave 1t as
| his opinion that whatever advantage
| had been realized by these financial
tactics was largely offset by the In
justices done by the public as a result
| Of this hostility. There is no doubt, Mr..
Taft said. that the outlook for public
utility corporations Is discouraging. Mr..
Taft expressed himself as opposed to
Government ownership for one reason
because he thought II would tend to
| hamper the mobility of labor and reduce
economy In operation.
Favors Service at Cost.
He thought there was a middle ground
that could be 'estsb lished through the
award Of more suitable franchises. He
was inclined to favor the service at cost
system. where fares rise or fall in ac-
cordance with the cost OF operation. He
was not entirely prepared to reject or
recommend the zone system. He was
doubtfur Of it's value in a city like New
York because OF the complications that
would ensue upon It's establishment. At
the same time he believed the system
might be tried more extensively than 1t
has.
The public will not be inclined to re-
gard favorably any suggestion for IN
creas ed fares unless the financial state
ments Of the companies are based upon
actual money invested in the roads" Mr..
Taft said. He added that he believed
most OF the roads had been through a
period in their history that had squeezed
most of the water out Of their stock. He
thought that IL 1t could be fairly estab-
lished that II was a question OF Govern
ment ownership or a receivership or an
increase OF fares to prevent either the
public would be willing to accept an in
creased fare Mr.. Taft referred to the
maximum wage rate Of forty-eight cents
an hour that has been established in
many of the larger cities. and sixty
cents, which he said had become the rate
In Detroit, and declared that II was the
Judgment OF the War Labor Board that
such increases could not be met with q
Ave cent fare.
The service at cost plan, Mr.. Taft
thought. would be better than Govern
ment ownership, and re believed that
the railway companies should be allowed
the right to give up Improbable lines
when this was found to he necessary.
He pointed out that while there was the
legal machinery necessary to compel a
railwa- company to live up to the terms
of IT, franchise there was nothing to
be gained from having a bankrupt ten
ave in ones home. He thought some
method should be devised whereby con-
tractual relations could DO modified to
meet exigencies-some appellate author
ity with power to relieve such q situa-
tiou as has developed. He believed that
Federal control of Incorporation would
do much to prevent corruption and stop
the sale of stock and securities unduly
inflated.
Price of Labor Going Up.
Mr.. Taft thought there was little or
no prospect for any immediate reduce
ton in the price paid for labor. and
that the investigation and the increases
granted by the War Labor Board had
established an upward tendency.
John II. Pardee. president OF the
American Electric Railway Association.
read statement offering the commits
sion the cooperation of his organiza-
tion in its investigation.
Gaylord c. Cummin. former city man
ager OF Grand Rapids and OF jackson.
Mich. and now conTcc'ed with the In
stitute for Public ; I.,. - Gamblers
plan. He said that to fix the net rate
of earnings OF a utility company and
not allow It to exceed that rate would
be to remove the incentive for efficient
operation and management. He said
that before municipal ownership could
be successful the public would have to
make up Its mind that It would have
to pay much higher salaries than are
usual in the public service.
Mr. Cummin said that in his opinion
the principal difficulty was In the attl-
tude of tho public mind toward utilities,
largely due the mystery with which the
companies cloak their financial opera
tons. This, he said. must be removed
and the public taken into the complete
confidence OF the railway executives.
The commission will go to Washington
to-day and plans to hold its future hear
ings in that city. Charles f. Elmquist,
chairman. said yesterday that an effort
would be made to lay report before the
President by November l. II has not
been decided exactly what the scope of
further hearings will be and this will not
be determined until later, At present
the commission Is working on a fund of
10000 paid out OF the Presidents con-
tingent fund. but this will be exhausted
in July and should It be found necessary
TO make any elaborate appraisals OF cleo
tric railway plants throughout the cpun-
try funds will have to be appropriated
for the purpose.
Granville s. Mcfarland. the Boston
attorney and advocate OF municipal own
ershop for New York city electric lines,
was expected to have been a witne 81
yesterday, but he telegraphed that he
was unable to be present and would