Evening star., 1920-12-02
The Car Fare Problem.

Inc Gar Fare Problem.
Application of the Washington Rail
way and Electric Company for a
straight Scent fare in replacement OF
the ~ cent token rate, while the Capt.
tai Traction Company by its silence
Indicates contentment with the exist.
ing rate, brings again forward the
matter of the financial inequality be.
tween the two systems that serve the
District with rapid transit. This has
for several years been a serious prob
lem for the Public Utilities Commits.
sion to solve, and it remains as diff
cult as ever.
The Washington Railway and Elec-
trio Company has demonstrated to the
satisfaction of the Public Utilities Com
mission in the past that it cannot
serve the public and make a reason
able dividend on the basis of the COM
missions own valuation of it's prop
critics at the rate of fare established.
1t, has sought and obtained successive
increases, which up to date have not
netted the company an adequate reve-
nue. for proper dividend-paying pur-
poses, while the Capital Traction Com
pany, also enjoying the increases, has
derived greater profit from them
without additional cost or enlarge
ment Of plant.
There are five possible solutions Of
the problem of the Washington Rail-
way and Electric Company and the
failure of it's revenues to meet main
tenance and dividend needs. The first
is a constant advancement of rates
with its i'll results of burden upon
the travelling public accompanied by
an abnormal addition to the profits Of
one of the two companies. This, prop
erly speaking. is no solution at all.
There remain four other possibilities.
The zoning system whereby the fare
win be measured by the actual haul
ing service would grant to the Wash
ington Railway and Electric Company
a ratio of revenue to service that, with
its wide extent of suburban trackage,
would place it more nearly on an
equality financially with the other sys-
TENS. This remedy, however, has been
perhaps wisely rejected by the com.
munity on the ground that it would
discourage suburban growth and would
put an unfair burden upon those who
have gone into the outlying parts Of
the District on the strength Of the
one-fare rate Of transportation.
Another remedy has been proposed
by the Commissioners in an equitable
adjustment Of taxes, putting the tax
paid the District on the basis of net
instead Of gross earnings. This would
lower the tax burden laid upon the
Washington Railway and Electric
Company and by tightening it's costs
would enable it to give adequate serv-
ice without further increases Of fare,
possibly at a lower rate than at pres
ent- This would require an act of
Congress. No response has been made
by Congress to the Commissioners
proposal.
Failing the zone system and tax ad
justment, consolidation has been pro-
posed repeatedly as the best remedy.
Whether merger il effected volun.
tarily or compulsorily, however, it
must be on basis of equity to the
present owners Of both the systems.
The compulsory mergers proposed
have been rejected as unfair and
voluntary merger presents a problem
Of great perplexity and difficulty.
There remains the possibility of mu-
nicipal or federal ownership, rem
edy from which all may well shrink,
in view of the enormous burden of in
debtedness which the community must
bear and the uncertainty of continued
good service.
The reasons for the disparity be-
tween the two companies are without
special discredit to the present owner.
ship and management of the less prof
liable. 1t has a wide system of subur-
makers, but are rather feeders for
the main system. Potentially they
are Of great value. Actually they are
In some cases drain upon the cor
poration. Owing to the financial poll
cies Of the past, for which the pres
ent administration is not responsible,
the financial overhead is unduly
heavy. The traction company has
been compelled to cut off in it's book
keeping Of resources its richest source
of revenue. the production of power
The mistakes of past managements in
dealing with the operatives have cost
ii heavily. AS result of all these
conditions the Washington Railway
and Electric Company is now COM
PEELED to ask for higher fiat rate or for
a differentiation between long haul
and short-3aul car fare. or for relief by
equitable tax readjustment. The util-
titles commission and Congress will
consider the matter from the point Of
view of equity, both to the community
and to the corporation.