Evening star., 1920-01-09

alleled by a line of the Capital Trac-
ton Company the application of dis
crlmlnat1ng rates to the two COM
panles would. in the opinion of the
commission, result in such a disar-
rangement of the arteries of city
impossible for the Capital Traction
Company to render adequate service,
while, at the same time. the reduction
IN the number of passengers on the
Washington Railway and Electric
system would. to large extent. off,
set the effect on the gross revenues
or the increased fares. The two sys-
TENS are so related that if the pres
ent character of service is to be
maintained. much less improved, it is
deemed imperative that uniform rates
be maintained on the two systems
1T is true that the disparity in the
net earnings of the two principal
street railway corporations. is very
great. and every proper means of cor
recting this disparity should be taken.
In the opinion of the commission, a
big step toward this end lies in modi-
lylng the provisions of the law under
which street railway companies are
required to pay into the public treas
ury per cent of their gross revenues
While this law has been on the stat
ute books for many years, it is in
equitable in its terms, and in the
modlned by exemptinG from taxation
that part of the income REQUIRED to
meet operating expenses and paw a
1alr return upon the fair value of the
property. and that upon income in
excess of the amount exempted a tax
snouid De levied upon sliding scale.
as is done under the general federal
income tax law
Grouped Into Two Systems.
The street railroads of the District
of Columbia are grouped into two
principal systems, the gross receipts
and the taxes paid thereon of each
system being practically Identical The
service rendered by these two systems
however is quite dissimilar One sys.
TEN operates and maintains nearly
! twice the mileage of the Other svs,
tenn, ten of it's lines running to The
District boundaries. while the. other
system operates only two such sinh
! urban lines. Under these conditions
one OF me systems finds it profitable
to operate on scent fare, while the
other system is now before the Public
Ctilitles Commission with plea that
! II is unable to earn 6 per cent on the
I Ialr value OF its property as found by
! the commission on the existing fars
of 6A cents This great disnaritv in
earning power is due almost who,iw
to oinerence in location as the cost
of operation of the two systems her
car mile is almost the same.
AS a means OF relief it has been
suggested that street car service he
charged for on a mileage basis. but
there are serious objections to the
adoption of such a plan. It would
| provide only partial relief unless dif-
/ ferent mileage rates were established
| LOT the Two systems. 1t would throw
| a greatly increased burden upon the
! residents of the suburbs which bsva
| been built up on the basis of a f,at
fare within the District of Columhia
! and as the systems are highly com
| petitive in the heart of the city il
would further result in shifting of
much of the short-haul traffic from
one system to another, thereby tend
! ing to increase rather than to de-
crease the disparity in earning power.
Increased Car Fare November
'"rhe order of October IS. 1919 in
| creased street railway fares effectiv.
November l. 1919, by substituting for
a five-cent fare with twoecent
I charge for all transfers. a seven-cent
cash fare, with four tickets for rs
| cents and free intracompany trans.
! fers. leaving a charge of cents for
, intercompany transfers.
| After operating for two months
under this increased rate of fare the
Washington Railway and Electric
1 SSstcH dPphSo 10 the commission
for further increase in fares
THE Capital Traction Companv of
course, has profted greatly by the
increase of fares, which it did not
need and for which it did not asL hu,
which had to be granted in order
| TO preserve the equilibrium of tbe
! transportation system of the CITY.
Under the proposed leeislation
with existing conditions and with the
existing rates of fare, the system with
the large suburban mileage would h..
relieved of all taxation on it's re-
ceipts. while the tax to be paid by the
system enjoying the more yaIna hIo
privilege in streets would be more
than doubled.
All Taxes Segregated,
| "All taxes received under furtha,
provisions of section l will be seq
regated in fund to be known as the
| street railway contingent fund y
which will be used under the control
and direction of the Public Utilities
Commission for the purpose of i'm
proving street railway transportation
conditions in the District of Columbia
Even with the relief proposed the
earning power. and consequently the
financial strength, of the two sys.
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