Daily Kennebec journal., 1924-04-19
Flat Trolley Fare

Assuming. but not deciding, that
the property used in the public SER
vice may be considered as fairly VAL
ued at this latter figure Of $4,S4O,709.
96. We find upon the basis of the rev.
enues which are assumed will be pro-
duced by the increase. that the rate
Of return will be approximately 5.36
per cent, from which the corporation
is required to pay its fixed charges
and is entitled to pay dividends to its
stockholders. The fixed charges as
shown by the evidence for 1923 were
$72,259.00, from which some deduc-
ton will be made for 1924; the total
requirement for interest charges is
$71,70o.oo.
We have been especially interested
in the charges to operating expense
for depreciation made by the petition
er concerning which evidence was
given at some length. The petitioner
has adopted the straight line basis,
which is theoretical and is considered
unscientiflc by many economists and
students of this subject. The Com
pany as re-organized has been con-
Quoting its business only since 1919,
and no valuation. which always Is
predicated upon the condition of the
property evaluated, Is submitted in
the present case. The President of
the Company, its Chief Counsel, very
frankly stated that the expense Of a
valuation would be too burdensome
to be justified at the present time.
At present rate levels we feel that
the figures at which the property is
being carried on the books of the
corporation might be substantially
increased; but no disposition to take
advantage Of such a situation is man
ifested by the Company, even IL Jus
tifiable or possible. The President of
the Company asserts that it merely
seeks fair return upon it's outstand-
ing stock after the payment of other
required charges, and does not even
ask for return upon the accepted
rate base which Is the fair value of
the property used and useful in pub
lie service"
This case Is illuminating because of
Its contribution of facts to the gener-
al problem Of street railway trans
portatton, an economic problem vital
ly affecting the people of all states
and serious in New England. 1t is
trite to say that trolley lines must
be maintained. No one challenges
that evident truth. but If they are
to be maintained their income must
be commensurate with their neces-
sary expenses, and IL hey are to be
improved and maintained at the re-
qutred standard of efficiency, capital
must be forthcoming for such pur-
poses. and such capital is not seeking
investment in these public service in
strumentalities at the present time.
The manager of the line attributes
the depleted financial vitality Of the
petitioner to the extensive use of au-
tomobilees throughout the territory
served by this road. He expresses
the hope that a point IF competition
may have been reached where the
general use Of automobiles will not
more detrimentally affect the reye-
nues OF the road. This remains to be
seen. The following table indicates
the comparative gross passenger rev.
enues Of the Company for the first
few days of April of this year and OF
the year 1923. which have diminished
as Will be seen, in the amount of
$7lS7.4S In less than two weeks, In
other words, the patrons of this line
have used it the first few days OF
April 1924 considerably less than thew
used 1t In a corresponding period in
1923.