New-York tribune., 1920-04-09
The jerks Bill

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Section No. / Of the jerks bin re-
lating to street railways provides:
THE several cities and incorporated
villages and towns OF the state and
- each corporation owning, operating,
controlling or leasing che rapid
transit or street surface railroads
therein are hereby severally author
lied and empowered to enter into
agreements for transportation upon
service-at-cost plan, with pro-
visions for flexible fare adequate
at all times to cover such cost Of
service as hereinafter provided.
Such agreements when executed
shall! be during their term in sub
stitution for all fare, service and
compensation provisions Of all pre-
existing contracts, franchise agree
ments or conditions whatsoever"
Then the conditions are set out
under which the Public Service COM
missions may enter into agreements
under the service-at-cost plan.
To the companies is to be annu-
ally allotted an operating allowance,
and if the company in fact operates
for less it is to have a premium for
efficiency to the amount of one-half
of l per cent Of the ascertained value
of it's property. Per contra, if it
does not keep within its operating
allowance, it must make up the sum.
Next there is to be set aside a
maintenance and renewal allowance.
If gross revenue is then left, the COM
pany is to receive up to 10 per cent
on such a property valuation as is
agreed on or fixed by arbitration.
Finally, any remainder Is to be dis
tributed-to the city 80 per cent, to
the company 20 per cent. and to a
fare reduction fund 80 per cent.
Despite the plight the traction
companies are ina plight whose
continuance will, of course, ulti-
mately compel fare increases-the
jerks bill seems fatally defective.
1t ignores the fact that the COM
panies operate under contracts or
franchises whose validity is rot
challenged. Municipalities made
bargains with the traction COM
panies which practically placed no
limits on their money-making.
Traction company stockholders
cashed in to large amounts. When
the public grumbled, the reply was
that the companies took risks and
that it was necessary to accumulate
in good years to take care Of the
deficits Of bad years. If contract
is contract, is it reasonable for
one Of the parties, when business
goes against him, to ask for a can
collation.?
The principles on which ,nunici-
pality should DO business are obvi-
ously those private person would
apply. What business man, after
overpaying for many years, would
tear up a contract when the pinch
came to another foot? The traction
companies cannot, Of course, be com
PEELED to do business at an actual
operating loss, but they can be com
PEELED, if they would escape doing
the things required by their leases, to
abandon their improvements. This
may seem to many hard doctrine
but 1T seems the only logical one.
For the traction companies, after
enjoying great prosperity, now tc
come forward with cancellation
pleas and to ask for new agree
mcnts under which they are to get
10 per cent on the total of their in
Festment ia procedure not likely
70 commend itself TO the public.
As to the subways, the contract
rule, OF course, works the other way
The city IL partner under an
agreement which makes its invest
ment total loss il the companies
do not first get an agreed-on re-
turn. The effect Of this is to make
the city treasury bear the burden
When the five-cent fare does not
suffice TO pay operating expenses
plus interest on the company's in
vestnnent. Although Mayor Hylan
prctends not to know it, the city
must meet the deficit when five,
cent fare fails to realize enough to
nnect the operating and maintcn-
ance expenses and tho interest
chargca of the railway companies
Sn the Jenka bill docs not apply to
tfsA subways. With respect to them
the fiexiIls fare principle might
we'll be adopted-~not TO protect the