Evening star., 1921-07-08
Rate by Mail-Payable In Advance.
MarvIaud and virHinia.
Practical Traction Legislation.

Action by the House District COM
mittee in substituting the tax revision
for the municipal ownership bill, for
detailed consideration, puts a much
more satisfactory and promising light
on the local street railway situation.
The Commissioners have pointed out
on the basis Of their analysis OF the
finances Of the two railway corpora
tions that a change of the law to i'm
pose taxes on net rather than gross
receipts would serve most surely to
equalize the conditions between the
two systems and to permit moderate
uniform rate of fare. Under the pres
ent conditions taxation of the gross
revenues imposes handicapping PEN
atty upon the line that does the larg-
est volume Of BUSINESS regardless of
whether that business Is conducted at
Q profit or a loss. With rate of fare
that is avowedly more than one Of the
companies requires to carry its over
head and to meet its operating ex-
penses and yield a reasonable profit,
1t is reaping an unearned benefit from
the tax system which assesses gross
revenues.
The municipal ownership solution
Of the street railway problem Is the
least desirable Of all that can be con-
ceived. There Is no substantial senti-
ment or demand for it in the District.
On the contrary. it Is recognized here
that public ownership Of the street
railways. if effected with due regard
for the present property rights Of the
private owners of the lines, would
leave the District in worse situation
than at present. Municipal ownership
would have to be effected by the pur.
chase Of the two systems, by negotia-
tion or by condemnation. A price
could not be arbitrarily fxed by legis-
lation. The courts would inevitably
be asked to revise the purchase figure
II It was felt to be unjustly low. with
out due regard for the private equities.
The District, in short, would have to
take over the lines in precisely the
same condition as they are today.
financially and otherwise. 1t would
have to assume their bonded indebt.
edness. 1t would have to bond itself
for the liquidation Of the purchase
payment. 1t would have to reimburse
itself out Of railroad earnings to liqui.
date this debt. It is altogether prob
able that In such a situation, merging
the two systems by municipal pur-
chase, and reducing them to the same
basis Of operation and standard Of
equipment and efficiency, it would
find a reduction Of fares from the
present rate impossible for at least
some years to come.
Municipal ownership experiments
have not succeeded well elsewhere. A
bad standard Of service has been rem
dered, or that service has been given
at higher cost even than under private
ownership and management. The lack
Of profit-making incentive has re-
duced the effectiveness of operation.
The overload of debt incurred in &C.
quiring the lines has proved an al,
most permanent barrier to effective
fare reduction.
Change of the tax basis from gross
teye7laes to net will at least tend to
equalize the financial conditions Of the
two lines. II will not conceivably add
in the least to the rate Of fare. On
the contrary, it will tend to reduce the
rate, which is fixed with reference to
the less profitable system. hardest hit
by the gross revenue tax now imposed.
In selecting this bill for consideration
as a practical measure Of street rail-
way solution, the House District COM
mittee has moved wisely along the
line Of practical corrective legislation.