Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-08-06
Companies, Facing Ruin, Will
Increase Operating Costs
100000 Yearly Here.
TAXIS ESCAPE CONTROL
UNDER RECOVERY ACT
Only One Independent Group Will
Join-1ndividual Drivers to
Continue Unregulated.

Already facing a serious financial
crisis, Washington's two street railway
companies, 1t was learned yesterday,
are planning to adopt the industrial re-
covery code, despite fears that 1t may
spell bankruptcy.
With the exception Of one group Of
independents, the taxicabs, which.
through unregulated competition have
cut heavily into revenue Of the car
companies In the last few years, have
not made any gesture toward joining
the recovery parade.
The result, Of course, appears disas-
trous to the traction lines, unless. in the
spirit of blue eagle" patriotism, the
public turns back to the cars for mass
transpo1 tation-a proposition that the
realists do not seem to entertain seri-
ously under present conditions.
The car companies, after some care
full figuring, found that application OF
the recovery codes 40-hour week to the
men who run the cars, as well as the
clerical aud labor forces, will cost them
an additional $4,000 a year, with no
promise of a return on this heavy in
vestment The Washington Railway &
Electric Co. estimated its added outlay
for salaries would total 100000 year.
The Capital Traction Co.'S figure is
100000 less.
Sum Makes Big Difference.
Back in the days of wartime pros
perity. the car companies would not
have worried about such an additional
expense. But the story Is different now.
A sum of $4,000 is the difference be-
tween life and possible disaster.
Steadily since the war the revenues
Of the car lines have declined, and the
ever-increasing number of low-rate
taxicabs has just about killed all hope
of change for the better. Last year
the Washington Railway & Electric
earned only s35, 900, exclusive of the
dividend from its profitable child, the
Potomac Electric Power Co. An increase
the interest on its bonds protected and
virtually nothing else, if operating rev.
enue shows no further marked decline.
The situation Is slightly different
with the Capital Traction, which is
suffering a little more financial pain
from falling revenues. This company
earned $4,000 last year. and paid out
1854 900 in interest on bonds. Its loss
in operating revenue was 100000 under
the preceding year. A similar loss In
1888, coupled with an additional $780,
600 expense to meet wages under the
! code, cannot mean anything but finan-
cial ruination.
Merger Expected to Help.
Consummation of the merger, on
which progress is now being made by
committees of the two companies, is
expected to alleviate the serious condi-
ton confronting the street railway COM
panies, and yet there is no assurance
that it will pull them out of the finan-
cial rut. The operating economies that
will come through a consolidation will
save some money but not enough to off,
set the steady loss if revenue and the
$500, 600 to be added to the pay roll un-
der the code.
The hope of the companies is that the
public may boycott the taxicabs that
do not display the blue eagle and re-
turn to the old custom of riding str ct
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