Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-05-29
MORE LIGHT ON MUNICIPAL
MANAGEMENT

There are credulous folk who seem
70 think that the difference between
what one pays for an article and the
price for which it is sold is profit"
They do not think of such trifies as
the effort and expenditure required
in the handling of the merchandise.
Those people, if running a store,
probably would say that the differ
ence between what they paid for
their merchandise. plus the rent,
lights and taxes, and what they sold
it for would be profit Concerns have
zone to bankruptcy on just such
figuring. And why not, when the
interest value of the capital involved
Is left out of account, also the de-
probation of goods left over, not to
mention other outgoes?
Some of us who are distrustful OF
public management, because ordi-
narily it is more expensive than
private or corporate management,
and because the book keeping occa-
sionaliy Is not Of a kind which
private management would tolerate,
opened our eyes the other day when
the mayor of Detroit came out with
an announcement that the street
railways Of nat city, under NUM-
cipal management, had made profit
of a million dollars the past year
notwithstanding the low rate OF
fares in force.
Now some. having their eyes open'
proceeded to look about. They found
that this million dollars was IN the
"book- keeping" that if the city had
done what private OF corporate
MANAGEMENT would have been re-
uuired to do, what the city was re-
uuired to do under the charter, In
stead of a profit of million dollars
there would be a deficit of consider
able more. For instance the road
under the charter Is obligated to
charge enough in fares to pave be-
tween its rails ana beside them. This
the city had not done and it was
found that 1t would cost over four
million dollars to put that in shape
for one thing. 1t was left undone
with a view to the city doing it later.
It was further found that no de-
probation account was written on
against the capital invested in the
plant. The charter also calls for the
fares to be sufficient to provide for
a sinking fund to pa off the bonds
when those become due. This has
not been done. Furthermore. where
a railway under private management
would be required to pay for its legal
services it appears the city has been
paying for the legal service rendered
its city managed railway.
livery businessman knows that
this procedure Is not business like,
that such bookkeeping really covers
up rather than records actual condi-
tions; there nevertheless will be
plenty among those favoring Gov
eminent ownership who will argue
that such q course is proper. They
are the same ones who want the ma
tional Government to take over the
railroads, run them to suit the most
votes and tax the countrysto make
good the deficit. They are of the
same tribe as those who claim that
the valuation Of railroad property
should be based on the amount Of
money put into 1t. These same peo-
pie. however, If they should happen
to own a block worth today twice
a. much as when they built 1t, would
not care to sell 1t for such price.
But when they have an ak to grind
they are perfectly willing the coun-
try's taxpayers should pay for the
novver Of turning the grindstOne.