Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-07-30

company is entitled to receive as
near as may be return upon the
value at present claimed. It does
not follow. however, that rates can
be charged sufIicient to yield a fair
return. We are not required or au-
thorised to lose sight OF the rights of
the customer, as well as his obliga-
ton to the company, nor would it be
good business judgment for us to
authorize rate Of fare which in the
aggregate would yield the company
no more revenue than the present
fares, and would incidentally deprive
considerable number Of people
from receiving the service through
their inability or reluctance in pay
ing the increased fare. Otherwise
stated, il an increase from seven
cents to ten cents should be allowed,
and one customer should be lost as a
patron, the company would have to
add three new patrons at the in
creased rate to Offset this loss. We
regard the street railway situation ia
Maine and elsewhere as exceedingly
serious. We have many times pointed
out tho reasons for the decreased
and decreasing patronage of all
street railways, so that these reasons
are now very generally understood.
II the street railways are to continue
to render service, and If the patrons
cannot be required to pay sufficient
in fares to maintain that service, and
the communities feel that the service
must be continued, then some other,
method Of overcoming the deficit
must be put into effect. In some
places the State itself Is taking hold
Of tho matter, in others the Legisla-
ture has authorized cities and towns
to make contributions created
through taxation. These are matters
entirely beyond our authority and
are merely suggestions as to- what
the future may hold.
There is no doubt whatever that
this particular company must have
some increase in revenue, if it is to
properly render the service which,
under the law, 1t is required to rem
der. 1t is interesting to note the in
crease in all of the expenses of oper-
alton in somewhat recent years. In
1907 the maximum rate paid to car
men was II IL cents an hour. In
der the recent arbitration award the
maximu UNI now paid is So cents an
hour. From q typical list Of articles
necessary to be used by a street
railway we find that the increase in
price obtaining in 1920 over that of
1914 is in some instances as great as
100 per cent, and does not go below
| 40 per cent. To further illustrate
how operating costs have outrun in
creases in revenue, this particular
company in 1914 received as a gross
income $67O, 2SS.11. Its operating ex-
penses were $449, 0099S. The taxes
were S13,520.75. The interest charges
were $1S6,OS736 The wages paid
were 1924, 44422 In 1910 the gross
income was $1.OS5,O1O.12. The oper-
ating expenses were SOIL 1858. The
taxes were $22,239.15. The interest
charges were $19S,472.66. The wages
paid were $571.147.45. In 1914 there
was surplus of $40, 761.02. In 1919
there was a deficit of $46,S6S.52. In
1914 the per cent of wages paid to
gross income was 35 per cent. In
1919 the per cent of wages paid to
gross income was So per cent. In
1914 the per cent of wages paid to
operating expenses was 50 per cent,
| in 1910, 63 per cent. The increase in
gross income in 1919 over 1914 was
62 per cent. During the same period
the increase in operating expenses
was 1O3 per cent, and increase in
wages paid was IA per cent. This
does not take into account the in
crease recently given in wages.
Since 1916 this company has oper-
ated at an annual deficit. For the
year ended June 80, 1917, this deficit
| was $500; for the year ended Deem
| Der, 81, 1917, the deficit was $10.524;
| for the year ending December 81, 1918,
! the deficit was $135, 915; for the year
| ended December 81, 1919, the deficit
was SAC, $50; for the year ended May
months Of 1920 the deficit was $63, 557.-
90. This deficit for the first five
months of 1920 is in part due to the
excessive cost Of snow removal, but
it should also be borne in mind that
while for the year 1919 the interest
and fixed charges were $19S,475, the
same charges under the reorganiza-
ton will be but $50, 10000 for a year.
If the proposed ten cent rate were
put into effect and continued for a
year instead Of a deficit Of SAC, 1853 as
occurred in 1919, there would be a
| balance available for dividends of
$94,S73, and this amount would be far
below a fair return upon the value
of the property being used. AS we
understand it. the company does not
expect that it will be authorized to
charge rates which will permit it to
much more than break even. The
company does not feel, however, that
it should be permitted to so increase
it's rates as to avoid an operating
deficit.
| We find ourselves unable to con-
clude that so great an increase as
three cents over the present far, is
wise from the company's standpoint
or equitable from the customers
standpoint. No one can with &C
curacy fosecast the result Of any in
crease. The best that can be done
is to conclude what is relatively fair.
put new schedule into effect, and
observe the result. 1t would perhaps
not be profitable to multiply reasons
as to why one rate Of fare is in our
judgment preferable to another. We
have considered the matter with care
and at considerable length. We have
attempted to apply to the situation