Evening journal., 1920-09-13
ELECTRIC ROADS
NEED CREDIT
Pardee Thinks Rates of Re-
turn Should Be More
Flexible
TOO MUCH LAW
HEDGES CARRIERS
Special pS,3 /, i,i1,. to the the Evening Journal.

Special 10 the Evening Journal.
WAohlNGIUN, sept. i3.-Credit.
vitality needed by electric RAILWAYS
throughout the United States. can best
~ restored by regulatory bodies max
ing heir control and the rates OF we
turns TO lies more flexible, John H..
Pardee president Of the American
Eieortic Railway Association, declared
m a statement issued here tonight.
ne also strongly endorsed the declar-
auon or the Federal Electric Rail
Ways Commission. in its report 10
President Wilson, that the first es-
grcdit.
In the electric railway industry"
Mr. Pardee said, "as in every other
business, economic law dictates that
lhe price OF the product must be
based upoh the cost OF producing IT,
In. lhe attempt TO regulate the profits
ana the service OF electric railways
this truth has been lost sight Of and
the operation OF these carriers has
been so hedged about with laws. or
dinances, regulations and contract re-
NtrictiOns, that in the main their rev.
enue has been controlled by the die
tum Of commissions and other regu-
latory authorities while their eX-
nens's have been controlled by eco
nomio law alone and have mounted
as expenses In all other business ana
among the private individuals have
mounted.
ITO restore electric railway credit
30 is essential that these artificial
methods OF fixing electric railway
.priccs should be done away with. As
the Commission we'll states public
control must be flexible enough to en-
able them 20 secure sufficient revenues
Ito pay the entire cost OF the service
rndored including the necessary cost
Of both capital and labor
THE report OF the Federal Electric
Railways Commission" he continued,
strongly emphasizes its finding that
the systems Of electric railway
transportation are permanent, essen
'iial 10, and must be pres rived TOT
the social and economic functonine
Of our cities and communities
a very acute situation exists
among the electric railways at tht
present time. The abnormal increase
in urban population, which has mark
ed the development OF the country
during the last thirty years, continues
as is evidenced by the latest census
returns. The problem or caring TOT
these new millions Of city dWeller;
is not alone one Of providing dWel'
lings. it is equally problem or pro
.viding local transportation iacliitles.
The industry needs immedlaleis
for such extensions and betterment'
and for the rehabilitation or eNlstins
| .properties which have deterioraife
/ during the war. between s3OOOJOn'
and siOOOOOOOO OF new capital ana d
will need for years 10 come an average
4 sof more than S200O0OO00 a year. eX-
elusive OF its refundng obligations
4 Today, the investor looks askance a
electric railway securities, ana ~ j
A practically impossible for these com
panies TO dispose OF either theu
stocks or bonds. ,
"Iinder such circumstances. It d
i no wonder that the Commission de
clared that the flrst essential Is y
restore credit. No impartial inVestl
gator can come 10 any other conclu
sion and IL cannot too forcibly b
4 brought home 10 the American public
that unless the confidence OF the IN
vestor be regained, the eecirlc ran
ways OF this country Whlch IelISS
sent an outlay Of more than hVe Dll
lions Of dollars will cease 10 proper
function and will prove or lite aNal
in the solution OF the housing an
TRANSFORMATION problem wnlch con
fronts almost every community
ihe entire United Stabes.
Ordinary business common sens
dictates the way In which TINS mus
ho accomplished. The credit OF IN
industry was destroyed because II
& , revenues were insufficient to provid
n return satisfactory TO the inVesio
and al the same time TO- proVid
surety that this return should d
continuously forthcoming.
"The social service performed b
these utilities is their most importan
function and the public interest az
s msnds that no undue obstacles shoul
he put In the way OF the performanc
Of their full public duty. They pei
form an essential public service
which as the Commission points on
can be performed by no other mean
Of transportation now in existence