The sun., 1919-01-06


over the Brooklyn Rapid Transit re-
ownership as was manifested year ago
when tho Government authorities, after
having taken over the railroads, were
trying to formulate "A railroad control
law which would provide justly for Sc
curity owners. 1t is obvious that
crisis in the street railway industry has
been reached and that here, az else
where, increased revenues must be pro-
cured from some source IL the public is
to be provided with adequate transit
facilities. The matter is almost of life
and death Importance to nine-tenths Of
the community compelled to Use the
roads daily. without adequate trans
portation facilities great distress. with
a huge economic loss. would result
Other communities have solved the prob
lem in the only way it can be solved. for
| II is idle to suppose that the cent fare
which our grandfathers used to pay can
be made to cover the cost Of providing
twentieth century steel equipment and
the highest wage scale that the industry
has ever seen.
On tho basis OF the recent disclosures
In the traction situation It is clear that
the difference between a 5 cent fare and
I or cent fare Is the difference be-
tween adequate service or ultimately
none at all unless the taxpayers make
good the deficits. War costs and war
wages will not continue indefinitely, and
later on it may be possible to give the
public the service for less money. But
the one thing certain is that "A nickel
fare in most urban communities no
longer suftices to keep the traction COM
panios odt OF the bankruptcy courts. 1t
will be a great relief to have the qties-
ton threshed out at this time, for it Is
apparent that the companies cannot con-
tinue on the present basis much longer.
The whole nation Is interested in a
proper adjustment OF the street railway
fare. The position otssome branches OF
the industry was precarious before the
war started, but complications that have
resulted from it have made It impera-
tive for the companies to collect a larger
revenue for the service rendered.
Selling Traction shares.
The developments led to heavy liau-
| daton of the traction stocks which
sought new level in consequence Of
| pressure from various quarters The
general stock market moved uncertainty
| most of the week with unimportant fiuc-
! tuations. The seasoned dividend sha res
| showed good undertone, and while
| there was nothing 10 suggest large buy
| ing by the outside public there were in
dicatons that some Of the speculative
pools were studying carefully the market
position of their favorite issues. Whether
they will succeed in attracting outside
| support depends on tho position of the
| money market and the extent to which
banks are willing 70 increase loans or
speculate collateral
ON that point the prediction ny Gov
strong of the Federal Reserve Bank of
New York that there will be no great
surplus OF credit for speculative opera =
! tons whether in securities. commodities.
real estate or anything else so long as
he Government is heavy borrower
and reserve banks are lending immense
sums that they are now lending to the
banks of the country throws interest
ing light. That banks are still heavily
engaged with financing the needs OF the
Government as we'll as the purchases
of Liberty bonds by the public is shown
by the fact that about IS per cent. Of
the paper rediscoutned by the twelve
Federal reserve banks for the member
banks is secured through the pledge OF
Government securities. scarcely % per
cent. of such advances being based on
commercial paper.
There are more than 81. 600. O0O, 900 Of
Government securities in bank loans
and bank investments. The probability
is that this account will he largely in
creased when the forthcoming loan Is
brought out, since it is clear that the
public will not be in position to make
the heavy subscriptions that it made
during the period OF war profits and
capacity operations for the munition
plants. The chances are that the banks
will have TO make larger purchases Of
the forthcoming loan for their own ac-
count than they did for either of the two
previous offerings. This means that the
little investors. whose absorption OF $50
and 500 bonds figured so largely in the
ss,9S9, 900 total subscriptions re-
ceived by the Government for the last
loan probably will not be as much Of a
factor in the successful distribution OF
the next loan.