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The possibility of quick city transit is of recent date, and the questions of rates of sares and good service, of equitable taxation, and of proper recompense for use of the streets, have forced themselves into the minds of the American people only within the last decade.

The value of the street car franchise was recognized in England much sooner than in America, and concessions for the use of the streets there have for decades been most carefully guarded.

In our own country the practice of the various States in granting charters has been somewhat varying, and it might be difficult to define what is meant by the United States system of street railway control. Up to a very recent date the general policy in most States seems to have been to grant whatever the companies asked. In a few of the Eastern States the companies have been placed under the supervision of the Railway Commissioners and in certain cities of California the franchises are valued by the local assessors and are subject to taxation. In other ways some of the States demand some slight compensation for the value of the concessions made to the companies, but on the whole there is no such conception of the value of the powers granted by the several States and the corresponding obligations of the companies, as exists in Great Britain.

Although the English Tramways Act was framed in 1870, it anticipates the conditions of to-day, and affords opportunities for readjustment of privileges and duties, as the changed conditions of city life render such alterations desirable. Twenty-seven years ago Old England insisted upon a charter for tramway companies to run but twenty-one years. To-day, with charter privileges much more valuable than any tramway rights granted by Parliament, the States of New England are giving away franchises indeterminate as to time and with very slight provisions as to State or municipal control.

There has been little uniformity in the legislation of the various States relating to these matters.

Very liberal charters have been granted by nearly every State, and in many of the largest cities the franchises are

practically perpetual in duration, with no provision for the payment of any compensation therefor. In many of the Southern and Western States the life of the charter is limited, either through the operation of the general corporation law, or by special acts of the legislature or municipal councils. This is the case in several States where the towns are small and the value of the franchises correspondingly slight.

In the Eastern and Middle States, containing many of the largest cities in America, the charters are very generally indeterminate as to time, some specifying nine hundred and ninety-nine years' duration, while in others no limit whatever is mentioned. In all the New England States, except Rhode Island, and in New York and Pennsylvania the charters are practically perpetual. Thus the railway franchises of Boston, New York, Philadelphia, Brooklyn, Buffalo and Pittsburgh are the absolute and perpetual property of the companies. These franchises are unquestionably among the most valuable of any highway concessions granted by public authorities, and have often served as a basis of security for the bonded debt of the companies. As the promoters of a recent enterprise in New York City naïvely remarked in their bond circular, “the

company paid in excess of half a million of dollars for the various old horse car lines, the entire value of which was their franchises."

In Michigan the municipalities grant thirty-year franchises, in lowa their duration is twenty-five years, in California fifty years, Rhode Island twenty-five years, and in the States which have granted unlimited charters, there has usu

1 It is worth noting that in Philadelphia an ordinance has been in effect since July 7, 1857, which provides in Section 8 that passenger railways shall file a statement of the cost of their road with the city solicitor, the city reserving the right to purchase the same at any time by paying the original cost.

Here is an ordinance which has stood for forty years, without amendment or repeal, and whose validity as regards this section has never been passed upon by the courts. In the meantime very great changes in the city's railway system have taken place. Numerous grants of power have been made to various companies, the line mileage has increased until now it is greater than in any other city, many agreements have been entered into between the city and the roads, result. ing in the laying of hundreds of miles of street pavements at the expense of the companies, yet all the while this ordinance has existed, apparently forgotten, surely ignored.

ally been inserted in the charter of each company a clause providing for amendment or repeal, at the pleasure of the legislature or “ whenever the public good requires."

The question of legislative control of railways has been agitated to some extent, with the result that in eight States the companies make annual returns under the law to a State officer. In Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut and New York detailed reports are rendered to the Railroad Commissioners, under whose jurisdiction the companies fall. In New Jersey a meagre report is made to the State Board of Assessors, and in Pennsylvania the companies render an historical sketch, with some few financial statistics to the Secretary of Internal Affairs. The companies in these eight States and those of the District of Columbia are the only ones that are obliged to report regularly to State officials, though in certain cases companies render statements to the public authorities of the cities where they are located. The attempt to clothe the Railroad Commissioners with authority over street railways has in some States been opposed by the companies. In lowa and Vermont, bills placing tramway companies under the jurisdiction of the State Commissioners were last year defeated in the legislatures.

The only States, then, in which the operations of the companies are matters of public record are as follows:

New Hampshire
Rhode Island..
New York...
New Jersey
District of Columbia




334 1,904

585 1,491


Bonds and Stocks issued.


923,100 60,315,100 16,677,400 16,322,740 347,967,757

68,662,250 207,930,133 19,270,500



As the total mileage in the cities of the United States is 14,470 miles, it will be seen that the eight States mentioned

1 New Hampshire.

with the Federal District comprise 41 per cent. of the entire mileage, and 54 per cent. of the bonded debt and capital stock of the companies. The tramways in this group of States are capitalized at the rate of $124,000 per mile, or considerably more than the steam roads,' although the cost of construction and equipment has undeniably been much greater with the steam roads than with the trolley lines.

While, according to the Interstate Commerce Reports the capitalization of steam railroads throughout the United States has averaged about $60,000 per mile, the street railways are capitalized at $95,000 per mile.: This is especially striking when it is considered that the tramway companies have not had to construct expensive roadbeds, to buy valuable rights of way, to build bridges and tunnels, or to erect and maintain expensive terminal depots. All these expenses have had to be borne by the steam roads, and yet their capitalization per mile is less than two-thirds of the amount claimed by the tramway companies.

In the States where the supervision of the Railroad Commissioners is provided for by law, the scope of their authority varies somewhat, and their duties are largely those growing out of the exercise of the police power of the State. Details of organization and construction are passed upon by them, complaints of any infraction of the law may be made to them, and the charges are investigated by them. The Board of Railroad Commissioners is also to a large degree a judicial body, and as such is expected to be impartial and without prejudice in its decisions and its rulings. Often the experience of the Commissioners is of value in shaping new legislation. This is especially the case in New Hampshire, where upon the recommendation of the Commissioners a general street railway law was passed in 1895 which in many respects protects the interests of the public very well.

1 The steam railroads of these States are capitalized at about $109,000 per


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$50,000 is probably more correct. • Street railway capitalization per mile in Canada, { Bonds = $12,300.

Great Britain, {

$15,000. Stocks = 38,000.

37.900. s Bonds =

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A comparison of the powers granted and the duties imposed by the charters of the companies in the several States shows the following points, as in general qualifying the system of private ownership in the United States, and defining the extent of State or municipal control.

1. The duration of charter privileges is usually unlimited as to time.

2. Ownership of tracks and franchises is vested absolutely in private companies, without any provision for acquisition by the city at any time.

3. No compensation for the value of the franchise is usually made.

4. Certain restrictions as to methods of construction are imposed, such as the weight of rails, height of poles and other engineering details.

5. Few restrictions as to operation are imposed, either as regards time-table, hours of labor for employees, or even as to rates of fare.

6. Taxes vary greatly as to form and amount. In general, a property tax on poles, wires, rails, rolling stock and power house. Sometimes a license tax on each car operated. Often a tax on market value of stock and bonds. Occasionally a tax on gross receipts in lieu of or in addition to the property tax. Very generally the companies pay the cost of laying street pavement between the rails and for a foot or two on each side thereof.

In the legislation of most of the States the companies are given very great freedom in the management of their financial affairs. Thus over-capitalization has been possible, and excessive issues of bonds and stock have been the rule rather than the exception. This evil is coming to be recognized, and legislation is being had quite tardily in a few of the Eastern States to stop the practice. A Massachusetts law provides that “only such amounts of stock and bonds shall be issued, and for such purposes only, as have been authorized by the board of railroad commissioners.” Connecticut also has had a statute since 1893 which provides for limitation of bond issues. In each of these States the bonded debt per mile of track is $20,000, while in Pennsylvania and New York the debt is $49,000 and $91,000 respectively.

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