Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-03
Business Common Sense
Restores Railway Profits
To the Editor of The Star:

To the Editor Of The Star:
At this time 1t may be suggested
with propriety that the holders Of stock
in street railways Of the District OF
Columbia might take hand to safe
guard their best interests and proceed
vigorously to supersede a policy OF con-
tentious lawyer litigation by an appli-
cation Of the rules OF business common
sense.
SO acting. The first thing the stock
holders will be inclined to do is to
order the immediate expenditure of the
depreciation funds Of the railways. some
81, 900 900 and $4,000,000, respectively
to keep the rail lines in a state of
efficiency corresponding to the progress
Of the industry, as the law requires
This they will do for their own benefit,
as well as in the public interest, for
ancient and out-of-date equipment and
facilities increase maintenance costs and
operating expenses and inevitably reduce
the amount left for dividend purposes
The second move would be a house.
cleaning order to get rid Of all property
not actually used and useful for the con-
venience of the public. AS business
men, they well knew that the carving
Of useless stocks and fixtures merely
cutters up the place, cuts into their
profits and Is either dead-weight loss
to the concern or becomes an uniusti-
fable carrying charge upon their Gus
toners.
Their attention is then directed TO
valuation. 1t has been represented TO
them on very high authority that the
valuation fixed is not intended as a
buying and selling price for their
property. but for rate-making purposes
and that they are entitled to collect
rates sufficient to balance the deprecia-
ton as we'll as to pay a reasonable re-
turn upon invested capital. They inspect
the sum total Of the valuation. They
consult the latest dividend statements
and compare the figures with reason
able return" Finding a discrepancy
and being the investors Of capital in the
railways. they pass resolution in
structing their officers and directors
Immediately to notify the Public
Utilities Commission that they desire
a reduction Of two-fifths OF the repro
duction-cost valuation placed upon
their property for rate-making purposes
as they are of the opinion that the
market value Of their property will not
be affected adversely by such reduction.
They realize that the average purchas-
ing power Of the dollar is but FIVE
eighths Of what 1t used to be and they
want to separate themselves from any
valuation for rate-making purposes that
is out of harmony Herewith. They can
not afford to try to exact a rate of
fare that is beyond the capacity or
willingness of the people to pay. and
they decline further to see the legiti-
mate return on money invested con-
stantly shrinking because of a valuation
priced high above the common public
level. They refuse to impose upon the
people anything for which the people
are not responsible, anything that will
ALLEVIATE good will and cause the public
to keep on street cars as much as pos
sible
Thoroughly convinced that a reason
able return is readily obtainable
through the reduction of a wartime
peak valuation that is inapplicable to
present conditions, they further instruct
their officers and directors to make
known to the Public Utilities Commits
sion that II the reduced reproduction
cost valuation will permit of reduction
in present rates of fare and still yield
fair, reasonable and just return on
invested capital, they will willingly
consent to such reduction, as they much
prefer to sell Scent rides for cents
ana get more passengers than to offer
Scent rides for 10 cents and see their
dividends vanish via automobile.
They desire to have 1t understood
that they are interested in keeping
pennies in the poor mans pocket; that
they know he must count pennies more
carefully and hold on to them most
tenaciously when prices are unfairly
high, and The are such considerate
friends Of the less well-to-do folks, who
have been their steady and best Gus
toners for more than half a century,
that they would rather not be placed
before the public in the position of
taking unjustly the pennies of the
poor to fatten their dividend returns
They represent to the commission
that they are well aware that the street
car has always been the poor mans
carriage; that they still want it to be
his carriage and automobile all in one
as long as street cars are run for pub
lie convenience. They know that the
less well-to-do depend upon street cars
Tor travel to and from work and in
other directions, and they acknowledge
the relationship and recognize an obi
CATION requiring them to keep this
facility within the reach of ALL so lone
as II Is within their power to do so
They realize that if it is unjustiy re-
moved beyond the poor mans reach
they are not fulfilling the purpose for
which street railways were chartered
they are not living up to the most vital
principle Of their compact with the
public. and they prefer to do business in
good faith when it Is to the best in
terests of all that they should serve the
public ole-heartedly at all times and
on all occasions.
Having very wisely and sensibly re-
duced a valuation that cannot now be
upheld and placed the earned profits
OF the railways in the pockets of the
investors, where the money rightfully
belongs. it is quite possible that a bust
ness mans viewpoint impressed upon
a large ajority of the stockholders
and upon officers and directors in har.
mony Herewith, might lead them ia
discover other ways to keep and gain
passengers, which, under present condi-
lions, they need much more than an
impractical reproduction-c theory OF
valuation.
Thus would they come to see how
equitable and just is the proposition 10
base their rates of fare upon the aver
age purchasing power of the dollar
within the actual ability of the people
to pay-and to make the fares even
lower, for their future prosperity, If
they can.
So may they exchange an undesirable
financial condition for revenue paying
passenger goodwill; so may they ex-
change widespread dissatisfaction for
dividend salvation.
JOSEPH w. CHENEY.
Hard of HEARING Too.