Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-08-18
THE TRANSIT FAMILY ROW

| CTREET- CAR riders and citizens
~ generally should not become unduly
excited over the latest developments in
| the local transit situation. There is no
need to get heated up over it IN this hot
weather. 1t is still purely a family row
between the p. Il. T.. headed by Mr..
| Mitten, on one side, and the various
holding and subsidiary companies on
the other. Like all faplily rows. this
one Is a good one for the public to
keep ont of, and this includes Mayor
Moore as we'll as the people at large.
Examined closely. Mr.. Mitten's pro-
posal to the Union Traction and other
lease holding companies, which at first
blush looked like a carefully prepared
plan to cut 81 900 900 or 81. 900 900 off
the annual charges of the p. Il. T., ap-
pears in its true light as nothing of
the sort.
In Mr.. Mitten's statement rearrang-
ing the capital of the new holding cor
poration there is serious omission.
| While 1t indicates that the total amount
of dividends to be paid would be only
about the rentals of the old horse car
companies which would still have to be
paid as at present. These amount to
nearly So 900 900 and are by far the
most excessive in percentage on capital
invested Adding this sum and the
other capital charges, including interest
on bonds of the p. r. 7. and under
lying companies, the total amount, in
stead of being less than at present,
would probably be several hundred
thousand dollars larger.
So far as relieving the public, there
is nothing at all to 1t.
1t may be asked why, then, Mr.. Nit
ten was so eager to have this plan
adopted? The obvious answer is that
it would place the =. r. TIN whose
interest he Is primarily cOnCerned-on a
more even footing with other lease
holding concerns. Instead of Union
Traction, Peoples Traction, Electric
Traction and Philadelphia Traction
having their dividends on n guaranteed
basis as at present, they would go on
the same basis as the p. Il. T. divi-
dends, which are not guaranteed al
though cumulative. To this extent II
would be relieving the =. r. T. of such
dividends as fixed charges Actually,
though, these dividends would have to be
paid out of the income of the company
which of course means out Of the pock =
cts of the car riders as at present.
One other advantage which might
appeal 70 the Union and affiliated lease =
holding interests. if it were not offset
by the loss Of the guarantees and the
necessity of Union stock assessment
Of $40 a share, is the fact that the re
arrangement of the capital would cut
down federal income tax payments by
nearly three quarters of million
dollars.
But as stated In the beginning, the
matter is one for settlement between
the companies and does not yet touch
the vital question of how to cut down
the enormous underlying rentals, unless
Mr.. Mitten is willing to admit that the
dividends now guaranteed would surely
be eliminated, like the p. II. T.'s last
one, and that would be far worse
blow TO the Union and other holding
groups than the equitable readjustment
of rentals on the basis of valuation be
fore the State Public Service Crmmis
sion.
Mayor Moore ought not to lose hope
so soon. His statement of yesterday
indicating that he is thinking about in 5
creased fares Is premature while his ad
ministration, under the direction of his
official counsel City Solicitor Smyth, il
still preparing its case on behalf of the
car riders before the state commission
Nothing definite and permanent can b,
accomplished until the cases now pend
ing before the commission and the stat,
courts are finally determined, unless tn,
underlying companies see the hand
, writing on the wall and take steps t,
avert the coming acute crisis in thei
: affairs, as well as those of the +. X. r.
, by agreeing to a sensible rental com