Evening journal., 1919-09-22
Our Electric Railway Problems

| son 10 inquire into unsettled conditions
] in the traction service field, and 10 con.
slider the necessity for financial relief
shows practical unanimity Of opinion
on one point;
The electric railways throughout The
country are operating at a loss and
their revenues, based as a rule on the
nickel fare and pre-war conditions
have not kept pace with increased cost
OF service.
Regarding the remedy 10 be applied
there is some diversity Of opinion
ranging from suggestions Of a higher
fare to relief from special taxes OF
municipal ownership. The cost at serv-
| Ice plan, with guaranteed return TO
investors and payment by the public
! Tor what IL receives, also has its earn
est advocates, including Secretary OF
| War Baker, who discussed the sO-called
Cleveland plan before the Investigation
| commission.
In the following digest appearing
there are extracts from the testimony
OF practically all Of the witnesses beard
by the Federal Commission Certain
witnesses,of course, suggested more
| than one remedy. because the discus
sion OF so intricate and serious a ques-
ton as the vanishing revenues Of the
public utilities necessitated cOnsidera-
ton OF every angle Of the problem
Furthermore, the Federal Commission
while without power TO fix rates or de-
cree relief, was charged with the duty
Of making a thorough inquiry, so that
its recommendations might be guide
to state and municipal regulatory
agencies when they approach their
local situations.
For convenience and cOnscences, this
digest is subdivided into chapters COW
ering various statements as TO the
financial condition Of the traction com
panies. as well as the several remedies
suggested TO save the properties from
ruin. These headings embrace testi-
mony given on the following subjects:
Diminishing revenues: increased oper-
aling costs: higher fares as remedy:
municipal ownership: cOst-Of-service
plan; extraordinary taxes: automobile
and jitney competition; zone fares :,
general observations; future Of the in
dustry.
Testimony of Hon. William Howard
Taft.
The first witness heard by the COM
mission at a meeting I'm New York, I'm
June was Hon William II. Taft, former
President Of the United States and lat
terly chairman of the War Labor Board
HIS testimony was OF particular value
because Of the especially good oppor-
tunity he had for studying the electric
railways situation while chairman EX-
cerpts from his testimony follows
Il is charged that there has been a
gool deal Of watered stock, aud doubt
less there has been-nOt Of very recent
years. ! should think, because watered
stock to be useful has 10 be disposable:
and ! do not think anybody can dispose
OF street railway stock except in banks
that are run by gentlemen that have
an optimism that would justify their be
ing removed from the bank trust. That.
Of course, makes it most important that
the situation should be considered in
large way.
The lines have been built on the
theory that the business for short dis
tances with a fixed fare would be so
large as TO make up for the added ex-
pense Of the long distance: and do not
mink that that has worked out
am personally against government
ownership for the reason that 7 think
y reduces economy Of operation and
therefore greatly increases the cost of
something that is essential TO the peo-
pie
If You keep the fares at five cents
where they always have been-and
even in some cities they have been
three cents and four cents: in Detroit.
notably and in Cleveland If vou keen
1t there the red balance is as inevitable
as the rising of the sun tomorrow
morning. Il is inescapable.
Commissioner Gadsden. lis il no irue
tlat unless the public is willing that
lhe industry shall pay a reasonable re-
turh on the investment nobody else is
eulnb 10 put any more money into it2
Mr. Taft: Yes: that goes without
saying. do not hesitate 10 answer n
but I think that is self-cvident No
body who makes an investment is 20
ing TO make 1t for philanhropic pur-
poses, because business is business II
ne Is going TO be philanthropisi. he is
going 10 be philanthropist in his own
way out when he comes TO invest
money, If the investment is Ia he al
lractNe, 1t must be secure, and the
more secure il is. the lower rate OF in
come ne is willing to take, and the pre-
carious condition Of the investment
makes a high rate necessary in order ia
invite investment in such an enterprise
as this-what ! mean is that a reason
able rate is higher because of The inse-
curity OF the investment
That revenue OF electric railways have
not increased proportionately with
higher operating costs was admitted
by railway operators. bankers. econo-
mists and municipal authorities heard
10y the Federal Commission. Even critics
OF electric railway management did NOT
attempt TO argue That the nickel goes
as far today as it did before the Great
War. Whatever The remedy suggested
for a situation here and there or far
the general situation. the minds Of vii
nesses met on the decreased purchasing
power of the nickel and dollar. Here
are extracts from The testimony on
revenue and conditions:
General Guy +. Tripp. chairman of
the Committee Of One Hundred Amer
lean Electric Railways Association:
We have all been living I'm a fools
paradise in the street railway world
We suddenly walked up. when The war
awoke us, to find that no business
which is prevented from Increasing IFS /
revenues can live street railway credit /
can never be restored under the pres-
ent system governing munlcipalieies
and the companies.
The appointment Of your commission
furnishes the first opportunity for the
electric railways to present their case
as a national nroh1op, III, ,