Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-10-22
ONE CONTRACT DISREGARDED;
THE OTHER is SACRED"
No Solution Of Transit Problem Possible
Until the Right Of the People to
Service at a Fair Price Is
Established

I A1A~ man NIp lnut UOlnlIg Is SPttpU
= until it is settled right was not thinking
of the rapid transit situation in Philadel-
phia. But he might have been.
The seven cent fare decision Of the Public
Service Commission is admittedly made to
meet an eXigPnt emergency. 1t has raised
more questions than il has settled.
1t has especially lifted the issue of the
rcvisability Of public utility contracts into
such prominence that it cannot be ignored.
The city has contract with the =. II. T.
under which no change in the rate of fare
can be made without the consent OF the city.
The rate of fare when the contract was made
was five cents. 1t has been argued that
under this agreement the =. Il. T. could
have made a uniform charge of five cents for
every ride and could have abolished all free
transfers and exchange tickets. But the
T. X. I. asked the city to consent TO the
abolition of the exchange tickets and the free
transfers. and the city through its legal Off
GERS decided that since the creation of the
Public Service Commission its control over
street railroad fares had disappeared This
meant that the Legislature in Harrisburg
had passed law which had invalidated the
contract. The courts have sustained that
law and have thrown out suits brought to
enforce contracts which had been disrc-
2nrded by the commission in fixing utility
rates in other cities.
In the Philadelphia case the commission
has followed its own prccedentS. 1t has ig-
norcd the contract and has out of hand
raised the basic fare to seven cents. This
is the fare which the StoteSbury interests
have wanted all along. The contract was
nothing to them when it stood in their way.
But If there had been a proposition to reduce
the fare TO four cents. does any one suppose
that they would not have insisted that there
could be no change in rates without agree
mcnt between the two parties to it? They
would have carried the case to the highest
court in the state and if they lost there they
would have found a way to appeal to the
Supreme Court of the United States.
At the present time every official authority
seems to admit that a public utility con-
tract can be disreGarded when a public serv-
ice company seeks higher rate of pay for
its services.
But why does the =. r. T. seek a higher
rate OF fare: If it were required to do moth
ing but pay the costs of operation. including
fair return on the capital lcgitmatcly in
vested, it could continue to carry passengers
for five cents. The president of the company
has said 50 repeatedly. But more money is
needed 50 that it may pay what it actually
costs to run its cars and also so that il may
continue to pay the exorbitant rentals which
it has contracted to pay.
In brief, one contract has been invalidatcd
in order to enable the +. r. T. to raise
money enough to fulfill the terms of another
contract which even the profting party ad-
mits was a foolish agreement for the p. r. T.
to enter into. 1t is n pretty situation
The representatives of the underlying com
Al.
Commission has no jurisdiction over them,
aS they are not public service corpora
tons" 1t is said that they render no serv-
ice to the public. This will readily be ad.
mittcd. There are those who would go even
further and insist that not only do they
render no public service but that their very
existence IS n menace to the public in
tprestS.
But as has been said on this page before.
If the Public Service Commission has no
jurisdiction over the underlying companies,
then its power to make equitable rates is nil
No equitable rate can be fixed without a
consideration of all the elements entering
into the question. Ten million dollars is
tukNn out of the revenues of the F. r. T.
every year to pay the rentals and other fixed
charges Of the underlying companies This
sum yields in one notorious instance rev
onup Of - per cent annually on the money
invested. And the StOtcsbury interests are
insisting that the public has no redress be-
cause forsOOth, q contract which favors
those interests il sacred, while Il contract
which favorS the people Of III" city is merely
q scrap Of paper.
There can be no permanent solution Of
the transit problem here until there is an
equitable adjustment Of the sums paid to
Il.
sorted to which falls short of that is norcS-
sarily temporary. So long as the lease
contracts are enforced the people are bur-
dcnpd with excessive charges Every time
Il passenger, after November |. pays the
two cents or the cent and quarter extra
fare he pays tribute to that contract. and
he assists in the perprtuation of conditions
which whoa established no one thought would
continue.
IT is notorious that the men responsible
for the organization Of the Il. r. T. were
confident that it would become bankrupt in
a short time and that the underlying com
panies would resume the operation Of the
cars. But the Stotcsbury interests have
succeeded in bringing about a condition
under which the people are TO be compelled
70 contribute millions a year additional in
order TO save that company from bankruptcy
by enabling it 10 pay the rentals on the
inflated values Of the underlying corpora
tons.
II things go on as they are now the time
will come when the patience Of the public
with the private management of the street
railroads Of the city will be exhausted and
there will be demand for the taking over
| by the city of the whole street railroad
system by condemnation proceedings. II
the omelet can be unscrambled in no other
way even those who are most reluctant now
to have the city engage in the operation OF
street railroads will pocket their objections
| and consent to what they regard as the lesser
| of two evils.
| We are headed straight toward public
-