t '.'.f'j K?SS1W . vM i t 'ock that n. ori tul Thi ven I'. ridsr . Ion, l.W: o. 2 rtnii rtde tit, Jlfj "tern How, , JiU irk.t nlted oati. lba. . fair lood, 199; Kl. lent, i 60 e (irltt antr Wa mat I rail: 84c; bwt. Uc; 35c III SO; niud, other hou okrt, rj. I anl urad, ; do, ran kUl4 He- t, 1e; i(t rkit 2J8c: a, 4J qlter rultd earby J -pet fncr 830c illrtl ream, food. 1UM mand ?;jc: 91Tc; u, al l, per eadllr Irabla ationa tmli. c; do, c: do, piece, Arv. IV ;m & :V 'J u : i n- ipplfi. Dull, 0: do, 05 50! , fs so: S.50: M5 rtortb- r w. lrlM. poor, 4 50: IM cran-1 .': , Flor- nitW ,, par r lor weat- letter. Ef Jo. !. wr No. Jerwr. S BO a s.:s- Iu, r bbl , , 11 o ' ilaO t rVLlLfl . t-t. ill . !UI0 iA PnS, I lorld. JM Bit unt t wltltm .; r u a - ..'! Perm-. Tnn- ''B or H i -al T-i brtt I0.w a .m ' f)li WW h.V vn ?: RECTOR TWINING AND i' TWINING DODGES AS MAKES CHALLENGE ON LEASE Cntlnorf from Tote One , I did not come here today to discuss the lease. In the hatter of the lease the estimates will be In the report! of the Department of City Transit, which will bn'out soon. "The question as to the matter of equipment is not a trifling one. Tho mat ter is a serious one, and I think that you are entitled to know what the report will have to say. . "The coming report will sny that the lease in this respect is not nil clear ft can be read in either way. "In our own interpretation wo gave it the benefit of the doubt, but it is quite likely that tho city wll lnot have to pay twice for the equipment. Mr. BaBllard says the city will not have to pay for it at all. "When the city would pay for it a second time would come when the city , part of the bonds now 'amortized' after part of the equipment has been rht. The city .would pay for it once when under the terms, nf tho nr,mo. jays bought, - w .. .. i t .1 i ... "w w "w p,"- m ment y woum pay lne lesseo Ior Wjinoui raaiuuR uy lurmer answer to jur. tfallard's inquiry as to whether he ever had made the statement attributed to him. tho ri.tm. ! m iff x formal address. Mr. Ballard began his attack upon the equipment question as follows: . "It is charged that under the contract the city would have to pay for the equipment twice. In this vicious statement there is no word of truth. It is false and malicious, and it is tho thing what has stirred up the trouble. Mr. Twining and I are friends, but I think it was King David who said all men are liars. "Mr. Twining has stated this and so, has Mr. Hancock, and Mr. Potter and I mean to give Mr. Twining a chance to take it back." William Hancock on the transit board was seated near Mr. Ballard when the latter called his name, into the controversy. As Mr. Ballard concluded this sentence, Mr. Hancock jumped to his feet and explained : "I beg your pardon. I did not say that." "I bag your pardon," continued Mr. Ballard, "but Mr. Potter has said this ftfi enough for both of you. I wou.d say that if he were here today." Turning then to Director Twining, Mr. Ballrad continued: "On Februnry 21 a statement alleged to have been made by you before a committee of the United Business Men's Association with relation to the pro posed transit lease was published and circulated throughout the city under two .column headlines. These headlines read: " 'City will not own what it pays for, asserts Twining.' "In tho body of the alleged statement this quotation appears as coming from you with relation to the equipment. "'The lease would reserve for the city the right to repurchase what it already paid for, at the end of tho term of the lease.' "Following he publication o fthis alleged statement the United Business Men's Association adopted if as the principal reason for opposing the lease. Individuals also have adopted it as a basis for public attacks upon the transit lease. it "Will you please inform us; "First, did you actually make the statement attributed to you, "Second, was this statement by whomsoever made a true statement of fact?" Mr. Ballard then continued with this set speech after a final remark ad dressed to the Director to the effect tha he woul dgive him an opporunity to reply later. Mr. Ballard in his address flatly denied pessimistic prophecies of Transit Director Twining that the ratification of tho proposed transit lease between municipality and the Philadelphia Rapid Transit Company could mean either an increase in the city's tax rate or a fare in excess of five cents; The rapid growth and expansion of Philadelphia, which has been ex perienced during the past two years, and which may justly be expected to con tinue, Mr. Ballardsaid, will return to the city through the operation of the high-speed system and through increased tax returns every dolar of interest and sinking fund charges upon the bonds issued for the construction of the entire system. CLAUSE TO ASSURE CREDIT The provision in the lease reserving to th transit company the right to establish the present exchange tickets at a rai above the proposed five-cent universal fare to meet any deficit was inserted, Mr. Ballard explained, not be cause there would be the slightest possibility of a deficit, but because the com pany had to take precautions to give it the credit necessary to borrow $40,000,000 to equip any new lines. Director Twining expressed views diametrically opposed to those of the spokesman for the transit company. He declared That the transit program as now authorized will impose a burden that must be borne either by the city or by the operating company, That the city and company instead of drawing closer together in negotiations are actually diverging and are now farther apart than they were in 1914. That the 1916 figures of the company show that there would have been under the terms of the lease a deficit of almost $4,000,000 in the amount necessary to carry the charges of the unified surface and high-speed system. Ignoring entirely the optimistic views of Mr. Ballard as to tie future possi bilities of this city and without any reference to the rapid industrial develop ment of the last two years, which is rapidly advancing Philadelphia as the most progressive city in the Union, he repeated the statement that the system now will cost $90,000,000 instead of $63,000,000 and declared that the prophecies of former Director Taylor as to the profit from the system cannot be realized now because the various lines have been extended far beyond the original limits. TAYLOR FRUSTRATED FIRST PLAN Mr. Ballard made it plain during his speech that the company had intended to demand more liberal terms in the lease. This plan was frustrated, he said, by Mr. Taylor, whose assistance they sought in the negotiations "not because we wanted to, but because we had to." As a result of the conferences with Mr. Taylor the company is now willing, iMr. Ballard continued, to accept an assured return of five per cent, although the figures for the present year thus far show that the 1917 profit will be at least nine per cent. Mr. Ballard declared untrue the charge made by Director Twining and others that the city will .have to pay twice for the equipment installed on the high-speed system. He likewise denied the charge that the city will pay $41,000,000 for the abolition of the present eight-cent exchange tickets. 'J i TRANSIT LEASE FAIR TO CITY, DECLARES Mr. Ballard said': v . '7?9 clty of Philadelphia has committed UMlf to a broad program of transit develop nnt which has received the approval at Polls of nearly three-fourths of the voters of this city. It has been admitted Zjvtry one that theso ,lnes can B've the and most economical service to the "People If they are operated by the MIdelpMa Itapld Transit Company In Wh a iianner that the present surface psten. cn act us feeders to the high-speed "", irr.ito oklpg care of the shorter rides "W' tnu Burface. TAYLOIVS DEMANDS N "At the very beginning Mr. Taylor de manded of tho Rapid Transit Company that H agree to his terms of operation, tho basis w which was that whatever net Income tho wmpany might have (except from exchange xa-Kets) when the high-speed lines were -eptned should be assured to It by a pref !!?... pay,nent from the receipts of the 5,. v llnes- u was fatr ln Principle, yet cumbersome and unsatisfactory In Its Practical operation. This negotiation took ?.? J" Mny.'XDH. and Just prior to that "ma flguiea had ,,een prepared by jha De. Prlment nf pirv nvan.it ABli...i, ...i. "i !.Wnln,r il lhe transit company would rivLS' year lnt ",0 next twnty or more I MrM !se "Burta are today, at the ex. out ? ln,' vca. at le"t five years W-. . . ' '"ea"' the company's receipts l?i -t.H?lly' '"creased In the years 1913 to ?.,400.uvii more than the denartment's ff . i, e,t,"'lil they would Increase. The 9,Jti.'nt tsdinaleo. illlit our repAlnra tnr thin il'eJif.X,?',,.1 '" JS5.w00.000, Including ex S' .L',?-V.cket,, Q"r "Mlpts for this fiscal 'Il.L "U1 ninuunt to J28.40O.00O. These ?wf.".T,,r.0 I,ude b a flrm ' New York 'lair!11:. w W know ull New Yorkers ;HS u,i rMlfcaaelphla is standing still, v.""1 ACObUllta fun th..r havlm k..n ?f tU i.iaV. r short W. to b favarod with ; iwUnww (.'wkittMMtrlto will ntfMMJAf&k BALLARD tnc C08t of equipment." ATTORNEY FOR F. R. T. but It has not yet been given to the public. 1 hope that these New York experts have learned something about Philadelphia In the last tliree years and have been granted somo share of the vision open for those who have eyes to see of the magnificent growth which lies Immediately -head of us. "But let us come back to the present. The city voted J63.000.000 for this work. Contracts were let, and the time had come when the actual agreement for equipment and operation of the lines had to be made. In the fall of 1916 negotiation were opened by the Mayor, He sent to Councils what was called a first draft of a contract with us and we were asked by Councils to dehne our position. We made a formal statement to Councils that while the situa tion had changed materially since May, 1914, we still stood ready to carry out the spirit of the arrangement of that date. Well as tho preliminary arrangements had been made with Mr. Taylor, as this whole development was his plan, as he knew more about it man ' -"-manded the absolute confidence of the peo. pie, we naturally went to him. We knew that the press and the pubiio would not favor any contract that did not bear the stamp of his approval, and we Mt- pre liminary to submitting our position to the Mayor and Councils we should If possible satisfy Sir. Taylor as to the fairness of any proposition. HAD TO SEE TAYLOn So wo went to Mr. Taylor-not "" we wanted to. but because we had to. We started with the basis reached In 1914, Ut., that oru net Income (other than from ex change tickets) should to assures to us . showed him' that w -I -"'", '-itS present fiscal year wotiM '' 12,700 000, or nine per cent on cut stocK (or. eliminating the net earnln811(rr0anoek) change ticket., seven per cent on i our stock). and a-ot no furtirer. we w "-- '"" with tli nronosltlon that while private cap- "tail ,a public' ulllltM waa niMf RAPID TRANSIT ATTORNEY TRANSIT OPTIMIST AND PESSIMIST Si . BMBteaaMafflBaBV IF ' : ""''IHatal W v!'"v"BHaB -4iaBhaMBHBaBHalBaBaBaBaH AaBBBBBBJBBBk fHBBBaBBBW 1 V'BBaP Jaaaaaaaaaaaaaaak. aaaaaaaaaaaaaaaat sWa .Baaaaaaaaaaaaaaaaaaaal plaaBvaBal avM BBtBaHaaaaaaaB mmmmmmmmm -mi pemmas svmm u u ' VW. VMw vTVAA, . I'hoto by Photo-CrnfUTK. Ellis Ames Ballard, counsel for the Philadelphia Rapid Transit Com pany (left), and William S. Twining, Director of City Transit (right), who discussed the transit situatipn today at the City Club. we would linve to suffer because wo were paying too big a rent to the Union Traction Company", and under no circumstances would he approve a greater assured return than Ave per cent, "There Is no use going over the whole negotiation. It lasted a month. The result was we were made to give up all claim for accumulated dividends under the 1907 contract about J17.000.000 : we were limited to live per cent on our actual cash capital : our share ln the future of the combined properties was restricted to one-tenth, and then to cap the climax n recapture clause was Inserted to protect the city ln case It was found In the future we were making too much money. We fought against that hard, but as Mr. Taylor said he wbuld not approve the contract without It we took our medicine. As we were giving up so much we asltid that tho live per cent should be assured to us against possible contingencies. Of course. It was agreed that the whole arrangement was subject to an audit of our accounts showing that wo were making the money that we claimed to make, and In view of tho concessions which Mr. Taylor had got from us, he approved of the pro. vision for a temporary transfer charge, If needed to protect the minimum amount which had been accorded to us. "The proposition was then formally sub mltted to the Mayor and the chairmen of the two Councllmanlc committees, Mr. Gaff ney and Mr. Seger, at a conference, to which the Mayor Invited also Mr. Twining and Mr. Taylor. It was received with approval by the preis of this city. The next thing to do was to draw a formal contract, and It was suggested by tho Mayor that we follow as far as possible the form already before Councils. A month later wo submitted the contract. It was checked throughout by Mr. Taylor. It does not deviate In any way from the terms of our offer." ItEPORT ASKED "Now what has happened In the last two months? The Mayor asked his Director for a report on how this contract would affect the city. The Director stated he could not make this report until he received the audit of the company's books, already authorized, and an analysis of the contract to be made by a firm of expert railway engineers. So Ford, Bacon & Davis were ngaln employed by the city, and before either the account ants or the experts got to work we began to hear InsinuatU ns which became stronger as the days went by that our books were not right (Mr. Twining) ; that our stock was all water (Mr. Fluck) ; that there would be a deficit to tho city of 15,000,000 a year (Mr. Twining), or even $7,000,000 (Mr. Ryan) ; that It would mean an Increase in tax rate of a dollar (Mr. Ryan) ; that there ought to bo a seven cent fare on the high-speed lines (Colonel Potter) : that the city was paying J41.000, 000 to get rid of the exchange ticket which the company would put back ln six months (again Colonel Potter) ; that there was a nigger In tho woodpile (Mr. Hancock) ; and that the City was going to have to pay for the equipment twice (duet by Mr. Twining and Colonel Potter). Have I overlooked any of these little pleasantries? NOT MUCH TIME "Ten minutes isn't much time to get through these barbed-wire entanglements, but I will do my best. "First. Our accounts, Messrs. I.ybrand, Ross Brothers & Montgomery are at present auditing our accounts. Their re ports will show you that our statement of earnings Is correct. Fortunately, when Mr. Stotesbury took charge of this property In 1911, In order to avoid any question In the future as to the proper amounts that were being charged for maintenance of the prop erty and replacing equipment, he sent a letter to Councils definitely dealing with both subjects. In that letter he stated that In addition to setting aside a million and a half In cash and securities, then on hand, as a special reserve, the company would each year take out. of Its gross receipts for maintenance, and charge to operation, whether spent or not, fifteen per cent of those gross receipts. He also Btated that the company would purchase during the next five years 1360 new cars and that half of this purchase would be met from current earnings and charged to operation, At the same time the company adopted a new balance sheet and system of account ing which had been prepared by the city's auditors, Messrs. Vollum, Fernley, Vollum & Rorer, and the same were approved by Councils. , "Now the fifteen per cent has been set aside each year and charged to operation, but It has not all been spent. An a result of the policy which Mr. Stotesbury stated to Counclln the company now has on hand In n specl.il fund. In cash and securities, which It will spend upon this property when need arises and construction and material prices are normal. J2.176.000. "Instead of buying 135u new surface cars over a period of five years, we bought 1500 new cars within two years and a half. They cost J7.177.484.S6. Already J3.510.639.37 of this amount has been paid out of cur rent receipts. A further payment will oe made on May 1 next, which will complete the payment of half the cost out of earn ings. There Isn't another street railway company In this country that ever took $500,000 a year for six consecutive years out of earnings and put It Into equipment. "Second. It is charged that under the contract the city will have to pay for the equipment twice. Mr. Twining has stated this; Mr. Potter and Mr. Hancock have re iterated it, and I read In a circular sent out ln the name of the United Business, Men's Association the following; " 'In addition, under the proposed lease, the oity of Philadelphia pays the Philadel phia Itapld Transit Company for financing the equipment- at the rate of six per cent This plan for equipment continues for the period of fifty years, and at the end of the period. If the city desires the equipment re turned to It, then It must purchase the same from the Philadelphia Rapid Transit Com pany, notwithstanding that It has already paid for it, and, further, that It has also paid for new equipment to replace old worn-out equipment which the Philadelphia Rapid Transit Company had at the begin ning of the lease.' A SERIOUS QUESTION "I want to ask seriously the members of that very Important organisation which has done so much, for the city of Phlla-, delphla ln the paat how It comes that they permit their name to be used for this and .other mlrepri."untatlons of fact con- talned in, that circular, when the itruth could caaltytaYrW ajatBUIne. by reading th Ush' ' - equipment twice. It doesn't oven pay for u once, une company makes no profit on the equipment. It would havo made a profit of 1 per cent per annum on the cost of equipment under tho 1914' contract,, but that Is one of the things Mr. Tnylor took nway ftom us, Thi exact facts are: Tho company must provide the money to buy this equipment. It Ih permitted , to bonow this money at the best rate of Interest pos sible, and any saving In Interest rate goes Into the general fund and the city gets nine-tenths of It. "Now there will bo paid out of the cur rent earnings of the property Interest on these bonds until they are paid off, and on amortization fund of one per cent a year, which the city has calculated will fully pay off the bonds during tho life of the contract, and ln addition the equipment will be kept In good order and condition out of the earnings of tho property, so that at the end of the contract tho city will get the equipment ln first-class Bhapo wlliout the payment of a single dollar. The company will make no profit what ever out of the furnishing the equip ment and it will come to the city at the end of the term without its having cost It anything. And yet tho false and ma licious statement has been heralded about this town on the stump, and now ln this circular, that we ore making the city pay for this twice, and tho Impression has been created, to quote Mr. Hancock, that there was a nigger In the woodpile that we had tried to put something over but had been caught with the goods. "Third. It Is charged that tho company will get $41,000,000 for exchange tickets. This Is not correct. While the company will be relieved for the term of tho contract from tho charge of street "paving and tho tax on dividends, and will postpone for ten years payments Into the sinking fund (which It must then resume and nako up), this relief was granted to tho com,"iany for three considerations: First and directly, for abolishing exchange tickets, which hwo a gross value at the present time of J9OC00O. Secondly, so to strengthen the credit of the company that it would be enabled to bor row the J40.000.000 which It will have to borrow to carry out the terms of this con tract. Thirdly, to so establish tho net re ceipts of tho unified syBtem ns to make It certain that the company would not need the transfer charge provided for In the fare bectlon unless there was some great and unlooked-for calamity. But call It what you will, the company docs not get It. "The company can get nothing from the city except Its $1,500,000 and one-tenth of any surplus from Joint operation. Any sav ing ln payments, all receipts from every source whatever, go Into the common pot, of which the city gets nine-tenths nfter payment of the Ave per cent dividend to the company. Iet me Illustrate this by ana lyzing a year's operation under this con tract, and for greater certainty wo will take this fiscal yenr's figures. Our year ends June 30, Eight months are behind us. "At the present rata of earnings the com pany will how a surplus for tho year of over $2,700,000. Now If this contract had been effectl'.e last July we would have been saved the J735.00O of payment wo are making to the city (paving J500.000. tax on dividend Jl 15,000, sinking fund $120, 000). Adding this saving would make our earnings in round figures J3, 500,000. But It has been estimated that the exchange ticket Is of a net value to us of two-thirds of its gross say $000,000, for It Is be lieved there will be a pick-up on business from the reduced fare equivalent to the difference. This we must deduct, leav ing $2,900,000 as our earnings for the cur rent year If the contract had been In effect. What would become of the money? The company would get Its five per cent divi dend J1.600.00U leaving Jl. 400,000 for division, of which the city would get Jl, 260,000, or nearly twice tho exchange rebate. "But Mr. Twining may say I have neglected to provide Interest- on equipment. I answer: Tho Frankford line will not be operated, according to his own estimates, until 1919. We do not have to begin to meet Interest on equipment until 1920, and by that time our receipts will be much greater. But assuming that our net re ceipts In that year nre only what they are In this. It only takes J 160,000 to pay the Interest on the money that It will cost to equip Frankford, and so recasting these figures the city would still get J 1,125,000, which is $300,000 more than tho abatement on account of exchange tickets, and that $390,000 Is four per cent Interest on J9.750, 000, approximately the entire cost of the Frankfordillne. "Fourth. But Mr. Fluck says our stock Is watered and that If we did not have to pay dividends on our leased lines there would be plenty of money for everybody, Fine sentiment. Mutt and Jeff would call It 'stalling the rent.' Let us see about the water. First. There Is no water in Rapid Transit stock ; It Is paid up In full ln cash, and the stockholders have lost ln the fifteen years since 1902 $20,000,000 ln Interest. That Is gone. But you say look nt Union Traction and the big guarantees on Philadelphia Traction stock and K. and P. 4s which represent the old Electric Traction and Peoples Traction stock. Now I will make a statement of fact. I haven't time to elaborate It or give you details, but If any one wants details come to my office and I will give them. Starting with the formation of the Philadelphia Traction Com pany In 1883 before which time all the llnes were separately operated for a six cent fare and a nine-cent exchange ticket, there has been paid In cash on the stocks of the five traction companies. Philadelphia, Electric, Peoples, Union and Rapid Transit J74,7T9,005. "The total of all dividends paid to Janu ary 1, 1917, equals exactly 0.4679 per cent per annum calculated upon all this money from the time It was paid In. Less than H per cent. Not so very wet. Is It? And if I Included money raised on bonds at low rates of Interest, It would Increase tho In vestment to over J100, 000,000 and brlyg the Interest down to about 6 per cent. "Fifth. All tho rest of this talk about the size of the deficit and whether It will have to be met, as Mr. Ryan thinks, by a seventy-flve-cent Increase in tax rate, or, as Colonel Potter recommends, by a seven-cent fare on high-speed lines, can best be treated together. "I have already shown you what you can expect from the first year in which the city and the company have to meet Interest on, the cost of construction and equipment of the Frankford Una, namely, that rJU of th. systw wHI.b.abl. to, I the take , "m ' ' V - DISCUSS TRANSIT 4000-Year Old Story fold by Twining In Transit Talk DIRECTOR TWINING, in his dis cussion ,of the transit situation at the City Club this afternoon, went back 4000 years to illustrate the difference between the ugly and attractive presentations of transit facts. Here is tho Director's 4000-year-old story: There was a King in Egypt named Snefru, who ruled in Memphis. And it came to pass that he dreamed and he sent for the soothsayers and told them the dream. The first interpreter answered: "Woe unto thee, O King. All thy kinsmen shall die before thee." Then was Snefru wroth: caused this mes senger of evil to be scourged and sent for a second interpre ter. He answered: "O King, live forever. Thy life shall be longer than the life of thy kins- men and the men of thy house." Then the King smiled and gave presents unto his interpreter, for, though the interpretations were one. yet he had clothed his message in n web of fair and pleasant words. The first of those interpreters ' blurted out the truth bluntly, as nn engineer might, while the other presented it with the charming persunsiveneas so characteristic of nn accomr plished lawyer. will bo able to make uso of the Market street terminal. Like Frankford, with the gre.it Industrial development now tnklng place near Its terminus, It will doubtless practically carry Itself. It will not be until one jear after the opening of the delivery loop and such portions of the Broad street line and the Northwest Park way line aa are then ready to make use of It, that the city will be confronted with any interest payments which even tho normal growth of this Bystem will not be able fully to care for. That year will be the fiscal year 1922-23. for In this, as ln other cases, the Interest charges are capitalized for the first year of operation. Before attempting an annly sis for that year let us make nomo Inquiry as to what growth ln population and re ceipts this city an reasonably expect, for, nfter all, tho solution of this whole problem depends entirely on the growth of the city. "It is a conservative estimate to say that street railway receipts Increase twice as fast as the population. From 1900 to 1916 the population of tho city Increased thirty two per cent. The receipts of tho transit company Increased 106 per cent. That Is three times as fast. This rapid transit de velopment will help tho city grow. If It doesn't It ought never to have been under taken. The experience of New York and Chicago during tho ten years, 1900 to 1910, while their high-speed lines were being built, was a growth of from six to six nnd three-quarters per cent n year In street railway receipts. "Now. we can all do a little arithmetic, though we are not expert accountants. Take pur receipts for the current year $28,400, 000. I have given you the experience of three cities over the last two decades. Let each man figure for himself what Increase to expect and what the receipts of this sys tem will bo, say, In the year 1922-1923, which Is tho first year that the city will have to meet any Interest charges for con struction of Broad street, delivery loop ard Parkway and northwest lines under the present plans of the department. "If you adopt a two per cent yearly growth for the city and only a four per cent rate of Increase In receipts It will give you J35,000,000 for the year 1922-1923, after eliminating the exchange ticket, or an Increase In gross at the end of six years of $6,500,000. If, after nllowlng for the Increased cost of operating the new lines, the company Is able to save even twenty five per cent of that gross. Increase, Its surplus for the year will be $4,500,0O De duct from this $1,000,000 to cover Interest nn equipment cost, which Is not now a charge, and $1,500,000 for our dividend, and there will still remain $2,000,000 Bur plus, of which the city will get $1,800,000. or an Interest return of four per cent on $45,000,000. "An outlook such ns this need give the city no concern. If tho company does no' better than a four per cent increase which means that the city will get no better than a two per cent increase In population, there could not possibly ln 1923 be a deficit of Interest and sinking fund charges for the city to meet out of Its general fund greater than a million or a million and a half dollars. "But In the meantime the city will be accumulating a surplus from the profits accruing to It during the years from 1919 to 1923 ; the assessable value of lands at present undeveloped will be abnormally In creased by this Improvement, thus increas ing the general fund from taxation without any Increase In tho tax rate. But, gentle men, In my opinion It Is ridiculous to think that this city will not grow more rapidly In the next ten yers than It has in tho past. In the next ten years than It has In the past, months. A greatly Increased Navy Yard. The location of a great plant by the West Inghouse Company. Developments by oil companies and shipbuilding companies along the Delaware. "Yesterday told us of nn award to Phila delphia shipbuilding Interests of contracts for the navy aggregating over J50, 000,000. If these new interests should call for the employment of 60,000 additional workmen. It would mean rn abnormal Increase ln population of SOtsOOO people, and a 300,000 addition to the population of the city means $5,000,000 Increase In the receipts of the transportation system h year. It re quires no stretch of the .taglnntlou to be lieve that In addition to the normal growth heretofore experienced such an additional Increase ln population may bo experienced by Philadelphia during tu next six years. "If such should be the -ase the present contract would return to the city of Phila delphia every dollar of Interest nnd sink ing fund charges upon bonds lsucd to covir the cost of construction. I may be too optimistic, but, believe me, I am nearer the truth than those who have gone about this town howling calamity. ' "Ah ! But you say how about that transfer charge? I answer If there is no falling of net receipts below $1,600,000 there can be no transfer charge. So why discuss it? There isn't a chance of such a thing unless the Germans blow up the city, or there is a conflagration, or earth quake or some such calamity. Then you ask me, why put It ln the contract If you aren't going to use It? Just for this rea son: "The P. R. T. needs credit. It has to bor row at" least $40,000,000 in the next ten years for equipment of city lines and ex tensions nnd Improvements of Its own sys tem. To borrow any such sum of money It must be able to say to those asked to put it up we ore protected to the extent of the earnings of the Joint system against every possible contingency. This contract Is not possible without that protection. I ask you, in all seriousness, do you not think the city can well afford to give It? "Gentlemen, I have finished yet I ask you to Indulge me for n moment more while I tell you what I really think of the future of our city. When I hear the pessimistic talk that this discussion has brought out, I lake my stand with the Pharisee and thank God I am not as other men are. I believe In the future of our city. It Is the natural outlet for the resources of the rich est State In the Union, with Inexhaustible supplies of coal at Its door and offering the beat labor market in the country, there Is little wonder that the great manufacturing concerns lure turning to us. AUwe needU proper port development and, transit faclll ittakito taut FhlUdaJahia WMtf'lMakaiMtJM t . tEASE P. R T TCTASF. TTNFATR TO HTTV ;Ad -. . -.. w, -.ww--., i Director Twining said: "Our engineering publications have late ly given considerable space to discussing tho advantages that engineers enjoy who can express themselves clearly and 'on vlnclngly. Engineers, general speaking, nre mainly concerned with the ascertainment of fact, from which all true reasoning be gins. "Huxley said, 'Theory sometimes becomes a tragedy because a beautiful hypothesis Is slain by an ugly fact.' That Is too often the case with the engineer; he blurts out tho ugly fact, and It is unpalatable, where as, If he had the felicity of expression to present his facts In an attractive way, the results might be more satisfactory, I can best Illustrate this by reciting an Incident of some four thousand years ago. as re lated by Doctor Ebers ln 'An Egyptian Princess,' . " 'There was a king ln Kgypt named Snefru who ruled In Memphis. And It came to pass that he dreamed, and he sent for the soothsayers and told them the dream. The first Interpreter answered, "Woe unto thee, o King: All thy kinsmen snail die be fore thee." Thon was Snefru wroth ; caused this messenger of evil to be scourged and sent for a second Interpreter. He nn swered, "O King, live forever! Thy life shall be longer than the life of thy kinsmen nnd the men of thy house." Then the King smiled and gave presents unto this Inter preter, for though the Interpretations were one, yet ho had clothed his message ln a web of fair and pleasant words.' Tho first of those Interpreters blurted out the truth bluntly ns an engineer might, while the other presented It with the charm ing potsuaslveness so characteristic of an acompllshcd lawyer. 'As an engineer, I have striven to learn thn facts affecting our transit conditions, with a view of securing the best trans portation available, though I realize my Inability to present my conclusions as hap pily as I should like; therefore, I crave your indulgence. WITH OPEN MINDS "This transit problem should be consid ered with open, dispassionate minds; free from selfishness, bias and prejudice ; re ceptive only to rellablo and convincing evi dence ; keeping before us the great and Immortal truth, 'They who err in vision stumble In judgment. "First, wo must face the facts and rea son from a true basis to arrivt, at sound conclusions. Confusion reigns now because the people cannot reconcile the statements of today with the assurances of the past. On October 1. 1913, the Director of the Department of City Transit published this statement: "Tho recommended transit facilities will not only produce sufficient revenue to pay the Interest on the city's Investment, but also return to the city the total cost thereof, ln due course, and the city will ultimately be come tho woner of ull of these facilities. tree of Indebtedness, as a great municipal Income producing Investment. PUBLIC WONDERING "The public Is now wondering why that promise cannot bo realized, The transit program as formulated at that time was more modest and had not expanded Into the ambitious program that has since been authorized. "Comprehensively and tersely stated to day, the fact stands that the transit pro gram ns now authorized will Impose a burden that must be borne by the city or the operating company, or both. "The city is now face to face with a situation which was pointed out a year ago in my report, and which Involves the most Important questions which have been be fore the city for decision within Its entire history. "The questions now before the public are deeper and broader than the mere question, "Miall the Philadelphia Rapid Tranilt Com pany be paid n guarantee of live per, cent an Its Mock for operating the clty' sys tem? "That Is but one of the Incidental finan cial features of the situation. THE BIGGEST QUESTION "Underlying the whole situation Is the desire of the city for improved and proper modern transit service. "Probably most of the people present, If asked today what the city contemplates In Its program for transit development, would answer that the city Is committed to nnd Intends to carry out the Taylor plan. If I should ask what they understand by the Taylor plan I think It Is doubtful It many could give a clear and Intelligent Idea of what that plan consists or what It contem plates. PEOPLE DON'T KNOW "I find that many people talk enthu siastically and with great heat on transit affairs, but when asked specific questions they reveal the fact that they are chiefly Interested In some particular phase of thj program affecting their personal interest. "Job E. Hedges In a recent speech said 'Men amend the Constitution every day In language who have not even rend It.' "As pointed out a year ago, the Taylor plan may be considered as having three constituent parts or elements. First. The system of high-speed lines running radially from the center of the cltyln five different directions so as to seri,e virtually all tho districts of the city. Second. The financial plan, calling fo these lines to be built out of city funds. Third. An operating plan based on a contract with the existing company by which that company shall agree to provide satisfactory fcervlce between any two points within the city limits on a basis of a five-cent fare, with free transfers. "The first two elements of the program are behind us, nnd we have not time today to consider them. "The third element the 'contract' has been for tho past three years a rather In different Issue, but Is now a live, active, vital issue, for the people are at last real izing that this is the element which should have received the first consideration, "I have been asked many times recently what Is the cause of the long negotiations over this contract which hae not produced a satisfactory outcome. "If you read the history of the lease negotiations, starting In 1913 and continu ing Intermittently to the present time, you will find that Instead of the company and tho city drawing closer together as time has passed they have actually diverged uid nre now really further apart than they were in 1914. "The history of these negotiations show that the process of negotiations consisted of a proposal made by the city to the company, and a counter-proporal from the company to the city, each proposal varying Interms and conditions as the situation has changed from month to monMi "Time does not ..ml, the consideration of the past negotiations, so I will restrict myself to explain what Interferes with the consummation of a satisfactory contract. "To begin with, the difficulty underlying this situation is purely financial, and It has its roots back In the consolidations begin ning ln the '80s, about thirty years ago. POLITICAL FINANCIERS "In those days a group of financiers and promoters developed ln Philadelphia who had great faith In the future possibilities of the street rallwayj business. They were financiers of the political variety, and the result of their financing Is reflected ln every financial statement of the company that has been Issued since that time. "It the company's report for 1916 bi analysed It will be found that the rental represented approximately two cents oUt of every fare, collected, and the operating ex penses, taxes, etc, approximately three cents, a total of five cents, and the' surplus available for dividends virtually1 came from the exchange ticket revenue 'nd1mlssi 'and 1ml racUsW, laneous earnings, freight, adn These .rnUHa f. amountaC ito , i -v ircr " ? .'?. DIRECTOR TWINING STILL INSIJ V' conditions, the problem consists In 1 ing to stretch the remaining Income and four-tenths cents to cover 'the r ments of, say, four cents, had ths'ti system been ln operation last year; ainrerence or six-tentns of a cent enue passenger does not seem to be gap between tho city and the compai wnen we conaioer mat tne compai rled about 600,000,000 revenue rjaa last year. It Is evident that there havo been a shortage of about II. of tho amount necessary to carry th" ilea system last year, is. to xnis f,0 be added the 1900,000 which the received from the exchange tickets. would be abolished under the city's' gram. It Is obvious that there would 'k deficit of about $4,000,000 In the cash C3sry iu moot me requirements. ii WHO SHALL PAYr Wa "It Is therefore clear that tha dill In the negotiations lies In dceldln. i shall pay this excess cost, and no .lease 'i oe aeciaea until tnis matter Is deCeh and permanently settled. "A temporary reduction in tho city's"! gram of construction would not change! in nippies mvoiveu, Dut wouia tempor affect fllA nmnflnf ft tt, ahnaM r "Under present laws the comnanr ' not be made to assume this excess cost.. "I want to Impress upon you, gentlemM the eerlousness of this situation and I waSi to ask you to give this nuestlort sertsll thought, for this must bo settled falriyJH ft Is to be settled at all. A settlement, alM the llnes of the 1907 contract will result. nothing but abiding dissatisfaction, andttj contract of this magnitude which intereM every citizen as a stockholder of tho cMs should be given careful study nnd investl gatlon. v.' "I am Blmply amazed that your organ! zatlon, which Is composed of promtnM citizens, and business men, has not in;auj way endeavored to independently check th figures and statements which have beei Issued by this department as official, ami have not In some way endeavored to tab a stand or definite position ln this trans situation. ( ij TOO BIG A MATTER .f "This matter is too large to be leftj, the opinion of any Individual without s eral or at least one Independent' check.'; "The situation has grown within thi four years from an estimated Investmea by the city of J35.000.000 to an investmen estimated at present to exceed J90.000.008. This estimate Is In dispute. Mc. Tay lor denies that the cost wilt be this grSw Editor Eve.vino LEDQEn. ";; "At the same time the original invsM ment by the lessee has dropped from' $21, 000,000 to J17.000.000. '.?. "Originally the company's Investment vrm to have been over forty per cent orUi total, and has now dropped to less ta nineteen per cent. , ,, 'The earnings of the svstem as Dlanne in 1913 were estimated to $1 of gross .ft J10 of investment. This Is now dimli Ished to Jl of gross to JIB of Investmen "The transit commissioner's report "i 1913 stated that Jl of gross earnings to, I of Investment In rapid transit lines ym all that could be profitably supported. T- "All large enterprises are financed e borrowed money. jl "Money Is of the same intrinsic vaj whether furnished by a corporation or'by city. The only difference between the m of city money and corporation money'l In the difference ln the Interest rates'! which the money can be borrowed,. T1 rate to be paid on the borrowed money pends upon the credit of the borrower. T basis of credit is the financial soundness the borrower. The security of the loan mw rest upon the ability of the borrower 1 pay the Interest, nnd repay the principal ENGINEERING DEFINED "McHenry has defined engineering' ,i 'the art of making every dollar of lnvea ment earn the maximum interesfponm "As the city Is now committed to a pri gram which Involves a large Investmei and a consequent Interest payment, 1 the duty of every citizen to use his bei effortB to obtain for the city the best r suits possible. . ',,' "There Is no question that the clty.es, finance Its program, as the city bonds' to volve the faith and credit of the entli city and do not necessarily depend upo the earnings of the system, but the clt must determine, before any lease can t executed, whether those bonds are to t carried by the taxes or by tho business, an if the business, In what way and to wh extent. "The proposed relationship between th city and the Philadelphia Rapid Trans' Company may be described 1ft this tra: The city's system may be represented a a vigorous young man, who through altfc lstlc motives has been Induced to underttth to build a large, new and modern plan for the making of a public necessity, an has thereby incurred heavy debts and oM gatlons. He then, for business reasodi proposes marriage to a woman fourtes years older, who has Inherited an old plafe practically a monopoly, used for the oatn purpose, which he continues to operat though twice as large as the one he Intone1 building. The woman's plant has been vs profitable, but it Is so encumbered by to quests to relatives, under the will. that,h( own Income has been very uncertain, at on at least two occasions she felt that ha situation was almost helpless. She has be resourceful, however, and- lately, the W normal prosperity, combined wltfr a chant of managers of her plant, has produced , substantial Income for her. The pair real! that when they are married her Income' wt not provide their living expenses and atf care for his obligations. They are ji wrangling over the terms of a prenuptla agreement, and a bone of contention Is t matter of using her lncometo apply to kl debts. She Insists upon retaining of It for her own private use, while heViii slsts that a greater share must come! him to further his plans or else both bum become a charge upon the public She cei tends that he must curtail his obligation by reducing the extent of his plant or U agree to raise the cost of the productive nis works. He objects, as he Is rats RtuDDorn, and Is determined to carry- Ills plans as a matter of pride. He eiiM good credit whlclrvshe alms to utlllijtf protect herself and her burdensome lives. He, urged by his friends, wamj iu join wuii mm in irvinc to Dreaa will and thereby secure relief frsm'J erc.islve and unwarranted bequests? Mi i-ly there Is no love betweenv'thlZ! congenial pair and their present 4reIaUii ship Is only a matter of expediency,'' Oft "Recognizing the conditions and relaMst of this couple, will you kindly vnturj guess on each of these three questions: "First. Would such a marriage be . partnership? itf "Second. Will they ever mutually ass to such a' union? ;., - intra, it ney oo, wnicn one will &' neaa or. tne ramiiyT ; "We nil know by the experiens others mat marriages are not itnimlv hnnnv whn th Inmm meet the living expenses, Hqwevsr,- rerventiy nope tnst in due time auote the story books concerning tk say 'they wero married and lived,, vi- rt.-w.rrt "' '- STATE POLICE ARRBQT4 ON CHARGE fOT rnsoner na mue 11 to Destxuctfofi; ai m -iAncAstkr.' 41",''. 1 Troslel.., t IatsroousM, Pr feHaU,JUf rMWMUy,nbt 8X .
Significant historical Pennsylvania newspapers