Evening star., 1947-11-25

Utilities Commission, I have refused to say
or write anything for publication. The an
nouncement that the Capital Transit Com
pany (CTC) may seek another increase in
fares compes me to break my resolution to re-
main silent.
My thesis is that the interests of CTC, its
investors and the people require a cheap and
efficient public transportation system.
1t is automatic that the companys profits
depend on mass transportation. The greater
the masses transported the greater profits. 1t is
also true that the elasticity of demand for bus
and streetcar transportation is very great. The
private vehicle whether used by the owner
alone or shared with others, is one of the fac
tors diminishing the use of public transporta-
tion Taxicab service is another factor. Finally
it must be remembered that most passengers
have pair of good healthy legs, and there
are many whose legs would become good and
healthy If only given chance to function.
These factors have operated to deprive CTC
of the benefits it sought through the last rate
increases. 1t had hoped that the overall in
crease in revenue would be about 10 per cent
Despite the increase, however there was no
gain in operating revenue. At the same time
operating expenses have increased very con-
siderably.
Now the question seems to be debated whether
there should be another increase In fares or
diminution in service. This is, indeed, wrong
approach. Dininution in serDice is an increase
In fares. Another increase, whether by way of
charging more money giving less service, is
bound to result in disaster to CTC, it's invest
ors and the public.
Thus far, CTC has done pretty we'll finan-
cially. In 1933 when it was authorized to issue
$24,000,00O of common stock, the amount of
or
$20O&0O0. The remainder, s22O0OOOO, was
water" On the basis of the stock issued and
representing actual assets the dividends have
averaged about Is per cent per year since 1943
At the same time, the company has increased
its property out of earnings by many millions.
These earnings, on the common stock on the
above basis, have averaged 10 per cent per
year since 1941, as per the companys books.
If the adjustments in income made by thes
PUG are added, then the earnings on the COM
mon stock since 1941 have averaged about 11s
per cent per year.
High Cost and Diminishing Returns.
Now comes period of high costs and dimin-
tshing returns. CTC cannot operate in the red
At the same time, the public is entitled to
cheap and efficient transportation for the use
Of its streets and a monopoly franchise The
solution lies in: Cd Economical operation: CD
rates.
~ CTC must practice economies In its
opinion on the last rate increase the PUG pro-
nounced that it was incumbent on the COM
pany to effect operating economies wherever
possible without detracting from the quality
OF service furnished to its patrons" However,
the commission made no suggestion how these
economies should be effected. If there was
basis Tor the admontion, the facts should have
been developed in the record, appropriate find
tngs made, the amounts deducted from operat-
ing expense, and to that extent the increase
should have been denied.
The requirements should have been made
specific. For example: Ia That CTC should
eliminate excessive salaries; CO. that 1t elimi-
nate the cost of developing what has become
known as public relations" Git is definitely
unfair for public utility to charge the public
for having Its opinion inhuenced); (c) that it
let its construction work out on competitive
bidding, thus eliminating what may turn out
to he costly favoritism: (d) that it reduce con-
siderably its costs for injuries and damages,
etc. These are but few illustrations of how
direct economies can be effected.
(2) CTC must improve the ouQlitu of its
serptce. During my incumbency on the PUG I
DO not recall a single majo improvement in
transportation originating with the company.
l do recall many instances of service having
been improved over the company's objections
and many instances where improvement failed
because OF the companys objections. An apt
example of the former Is the crosstown (H2)
line, which is also illustrative of the fact that
Improvement In service often results in in
creased revenue and In savings in operating
expense
For eight years CTC opposed this crosstown
transportation on the theory that there would
not be any more than an occasional passenger
on that line" Within three days after I as
sumed office. announced my conclusion that
the crosstown line was to be installed All
efforts to delay failed. The line finally went
into operation on January Is, 1912, and when
1t established itself, it was carrying approx
mately $4,000 passengers per dayl 1t turned
out to be one of the best paying lines
One may indeed wonder: Why did CTC
oppose the crosstown line? CTC reasoned
that since these people had to ride they would
pay the fares anyway; they would not be new
passengers" therefore, the crosstown line
would be only an expense, not a source of
revenue. In this reasoning, the company was
wrong. The saving in passenger miles has been
tremendous. Entirely apart from It's duty to
render ef1cient service but only from the
standpoint of dollars and cents, CTC should
never have opposed the crosstoWn line.
The Origin and Destination.
If the opposition was an honest mistake of
managerial judgment then my suggestion is
that CTC acquaint itself with the needs of
the riding public. 1t cannot afford to rely on
such guesses as it exhibited in the crosstown
case. In 1912, demonstrated that an Origin
and Destination Survey covering $4,000 people
could be made in 20 days at a cost of $2,50O and
come out with sample of II per cent. The
results of the survey were used on the very
next day in determining the number Of people
who might use a proposed line.
On the basis of actual data CTC must speed
up its service by (a) elimination of circuitous
routes, CD introduction of express bus service
wherever full loads can be carried, (c) operat-
ing buses and streetcars on schedule, both in
rush hours and base day. with the schedules