The labor world. [volume] (Duluth, Minn.) 1896-current, 1921-02-12
SEATTLE AND DULUTH.

ship of public utilities to refer to the
"failure'' of the Seattle street rail.
way system as an example Of municipal
ownership and operation
''Here was SYSTEM, they said,
that gave fair return to private
capital, but when it was taken over
and managed by the city it became a
losing proposition. Not even a TO-
cent fare would save it,
Now what are the facts? The Seat
tie street railway system was owned
or controlled by the Stone & Webster
interests. 1t was water-soaked and
water-logged. 1t did not pay fair
return to the stockholders. If it
had they would not have sold. It car
ried a terrific capitalization and
bonded debt, just as is our own pri-
vately owned system here in Duluth.
Stone & Webster knew what they
were up against and Ole Hanson, the
municipal ownership mayor of the
city, proved their easy mark. They
induced him to head movement to
have the city take over the system at
"reasonable'' price. Strange as it
then seemed big business in Seattle
and all the '|well- to- do 50 who usually
oppose city ownership, including the
influential daily newspapers, advocated
rhe purchase by the city Of the ':pro6t-
able' street railway system.
So Seattle bought the traction sys-
tenn and paid for it the handsome sum
Of s15,000,00o. Everyone except those
on the inside thought it was a good
buy, as it proved to be for the first
wear or two when prices were normal.
But when the high price era arrived it
was soon found that the earnings Of the
system, after operating expenses had
been met, were not sufficient to pay
the interest on the bonds. Experts
igured it out that it would take a 10.
cents fare to keep the system solvent
That started an investigation. The
value of the plant was again taken,
this time by engineers more friendly
to the city than the firm that made
the original valuation, and it was
found that the Seattle Street Railway
system was worth but $1,000 900. The
city, through Ole Hanson, had been
stung for $l0,000,000. A grand jury
has just completed an investigation of
the whole transaction and the city has
started suit against Stone & Webster
for the return of the money.
The experience of Seattle is like that
Of Duluth, only we were fortunate in
having few courageous men like s.
F. Snively, Henry Truelsen and T. T.
Hudson, who objected to the payment
of an exorbitant price for the gas and
water plant. The old company at.
tempted to palm off its works on the
city for $2,1060OO It was worth
scarcely more than $65o,00o. Every
newspaper favored the purchase at the
big price. Big business was for y.
All the 'Well-to do's' whose opinions
usually carry considerable weight, ad-
vocated the purchase at the exorbitant
figure. The voters, easily influenced
by the papers and ''good'' citizens,
voted to buy on several occasions at
the high price, but Truelsen, snively,
Hudson, Fesler and others still contin.
ued to- fight. They went into court
repeatedly. and finally succeeded in
electlng Henry Truelsen mayor and the
right kind Of men to the city council.
After another long contest, even with
many aldermen going back on their
election pledges, the gas and water
plant was finally purchased by the city
for $1,250,00o. More than $3.50 900 was
saved to the people.
How few Of US in this time and day
realize what those early fights meant.
Had the original price been paid, tho
city ownership of the gas and water
system would not have been so success.
tul IN Duluth as it has since proved
to be. The interest charge alone Oh
the $S56,000 that was saved would have
consumed the average net earnings of
the water and light department from
the date of its purchase until now.
Our experience Of the past should be
a guide into our future. We are face
10 race with street railway problem.
1t must be met. The situation cannot
go on as it is Only trained and ex-
perienced public officials are equipped
to deal with it. The traction company
has its we'll schooled and experienced
representatives on the job all of the
time. Can the city afford to entrust
its side of the matter to kindergarten
pupils in the school of municipal ser,
vice?
In the election Of mayor and com.
nissione1s We cannot be too careful
/ 5s= s II d. i ..-5