The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-03-03

uay that the administration, II the
seven-cent fare is ordered, as he be-
ieves 1t will be, Will go into the courts
and In every legitimate way attempt to
have the order of the state utilities COM
mission set aside.
He also is considering the granting
OF franchises to motor bus companies,
and has asked the city attorney to look
into every legal phase of that matter
and see just what rights can be given
su1h companies If any are organized
In his formal statement to the peo-
nle of Memphis the moyor says:
Mayors Statement.
Upon assuming office Jan. !, 1879.
The city commission Of Memphis found
that an application was pending before
the state public utilities commission by
the Memphis Street Railway company,
requesting an increase in the fare. Ac-
cordingly. the city commission gave the
matter careful consideration, held num-
erous protracted conferences with W j.
Armstrong, city attorney; f. B, klewer.
assistant city attorney. and Ross w.
Harris. of Madison. Wis, street rail-
way engineer. who represented the city.
Mr.. Harris explained in considerable de-
tail the question of street car opera
ton, management, cost and returns. In
addition Mr., Armstrong and Mr., Klewer
and Horace johnson, commissioner OF
public utilities, attended sessions of the
state public utilities commission in
Nashville.
'"The purpose Of all these conferences
was that the city commission might be
in position intelligently to consider
the effairs Of the Memphis Street Rail
way company, with particular refer
ence to its request for increased fare
In the light Of the information fur
nished the city commission, and, ac-
cording to the figures submitted. the
sfgsas hr,na
a maximum fare of &c (siX Eents) Is
all that the Memphis Street railway is
entuied to receive from the Msulphls
Elbllc.
when, therefore, ! learned that the
state public utilities cprlmission. Sss-
ing IN Nashville, was cunsideriilg, or
haG tentatively agreed upon y .hlgatr
rate than &c tsix cents). q t0Wit ~
(seven cents) cash fare or ten tic&ets
for 65c (sixty-five centsl--l felt the
responsibility of Interesting myself In
the matter that | might, as representa-
tive of the people of Memphis, trans
late to the state public utilities commits
sion the judgment of the Memphis pub
lie as to what is a proper fare. l ae-
cordingly went to Nashville, gave the
benefit of my views to the state public
utilities commission, insisting that &c
(six cents) should be the maximum
fare,
II feel that the Memphis public should
be advised of the developments in the
matter, that they should understand
something of the factors entering into
the establishing Of street car fare
am, therefore, discussing in few ar
ticles some of these elementary fac
tors
What Rate Base Is.
In fixing a fare to be charged a
number of questions should be consid-
cred. The fare should be sufficient to
pay operating expenses and taxes, TO
provide for the upkeep of the property
in the way of renewals and replace
ments, and to give a fair return to the
owners of the company
"In order to calculate what this FAR
return should be, 1t Is necessary to de-
termine the basis on which the return
should be allowed. In other words,
some definite amount must be deter
minee as being the amount on which
| the owners are entitled TO a return.
"Inasmuch as the stocks andy bonds
lof the Memphis Street railway 10 not
represent the actual value of the in
vestment. it does not follow that the
company is entitled to return on the
| full amount of these stocks and bonds.
| In fact it Is not disputed that $1,000 OF
| the stock represents no real money
| investment, but Is, in street parlance,
| pure water.
"It was therefore decided by the state
public utilities commission several
months ago, to have made Il physical
appraisal, or valuation, Of the street
railways property, and following that