527. About $59,500 of this will be needed, the management, states, to pay increased wages to its employees over and above the wages paid in 1917, part of this being due to the award of a board of arbitration in February of this year, and the remainder to a further voluntary increase of 10 per cent on July 1, 1918, which proved necessary to hold the men in the face of rapidly rising wages on other railways and in other employments. The balance will be less by $5,045 than enough, after meeting the deficit of $12,582 above estimated, to pay dividends of 6 per cent upon the common stock.

How close to the facts this estimate will prove is problematical. The following factors, for which no allowance has been made, seem likely to operate to the company's advantage:

(1) It is not at all probable that weather conditions will be as severe during the coming winter as they were last year, and traffic ought to be better on this account.

(2) These weather conditions not only decreased revenue but increased expense. Expenditures for maintaining equipment were very heavy during the first six months of 1918, and much of this was due to the damage to motors, air brake apparatus and trucks caused by ice and water. As a result of the repair which became necessary, this part of the equipment is now in better shape than it was at the same time last year.

(3) The increase in rates was not in effect in July, August and September of 1917, but no allowance was made for this fact in the company's estimate. Some slight increase has been shown in May and June, and this might continue in the following three months. It is fair to say, however, that the company argues that the increase in May and June was due to the better weather conditions this year and to the fact that there were five instead of four Sundays in June. During the last 12 days of that month revenue fell off.

(4) The increase in freight revenue has been limited by the ability of the company to handle the traffic which has been offered. Congestion on the steam railroads and high rates have created an excellent opportunity for the development of this business. The company has ordered six new freight cars and, when these are received, should be able to add even more rapidly to the revenue from this source. The cost of operation, however, is high, so that the actual net gain is not likely to be large.

(5) It is possible, also, that freight rates may be increased above the 25 per cent estimated. As yet the class rates on the Boston and Albany railroad, with which the Boston and Worcester is in competition, have been increased only the 25 per cent recently authorized by the DirectorGeneral. The increase approved by the Interstate Commerce Commission in April of this year has not been made, but is contemplated. If this further increase takes effect, a corresponding raise will probably be made by the Boston and Worcester.

(6) The reduction in the number of stopping places, in the heat supplied to the cars in cold weather, and in service, recommended by the State Fuel Administration for the conservation of coal, will probably add somewhat to economy of operation, although similar steps were taken to a certain extent in the latter part of 1917.

On the other hand, the company has estimated a full 25 per cent gain in revenue from the traffic to which the proposed 25 per cent increase in rates is applicable, and no experience which the Commission has had with similar increases would justify it in believing that so large a gain is likely to be realized. The margin in favor of the monthly commutation rates upon the competitive railroad line will be increased and, while the Boston and Worcester has never attempted to compete for the commutation business, it is possible that this enhanced margin will make these low rates preferable for even some occasional riders. The company has also made no allowance for probable increase in certain items of expense, apart from higher wages, in comparison with the last six months of 1917, nor for a more nearly adequate provision for depreciation. It is true, furthermore, that, even with the recent 10 per cent increase, the wages of the men are not so high as the wages recently granted by the Worcester Consolidated and other street railway companies, and the company has promised to give this matter consideration in November. A further increase is by no means a remote possibility.

Taking all the circumstances into consideration, the Commission feels that there is little reason to believe that the proposed increase in passenger fares would result in anything approaching excessive profits to the company. The rate of 2 cents per mile is substantially lower than the single ticket rate of 3 cents now in effect upon all steam railroad lines, and is the same rate which has recently been established on many electric interurban lines in the Middle West, to which this road bears a closer resemblance than any other street railway in Massachusetts. Parenthetically, it may be said, however, that the Commission feels that this company, in view of its past earnings, ought not to seek to pay dividends in excess of 5 per cent upon its common stock under war conditions, and, if anything above this point is earned, which is not likely, it should be used for the improvement of the property and service.

There are some apparent inconsistencies in the new schedule. One is the minimum fare of 6 cents for a ride of three zones or less, as a result of which the fare jumps suddenly in the fourth

zone from 6 cents to 10 cents. A more logical minimum would be 5 cents for a ride of two zones or less. The company states, however, that in view of the high speed operation it would be difficult to collect fares within a space of two zones on certain portions of the line, particularly after leaving the Chestnut Hill terminal. It also states that the great majority of those who pay the minimum fare ride less than three zones many of them not more than 1 mile so that the discrimination against the long riders is more apparent than real. Another inconsistency is the retention of the very low rate for workingmen's tickets in the city of Marlborough. It appears that the reason for this is the unusual situation which exists on that portion of the branch to Hudson. Two short cross-town lines are operated in Marlborough with small single-truck cars. The manufacturing district is centrally located and the average ride taken by the workingman is very short. If a higher fare were established, the company believes that it would lose the bulk of its traffic on these cross-town lines and gain no compensating advantage.

Comparatively little remonstrance was offered at the public hearing to the proposed new fares, and the chief complaint came from the residents of the so-called Overbrook section in Wellesley and Natick. Prior to the increase in rates last fall, the Boston and Worcester had in effect a 20-ride ticket book selling for $1.50, which afforded a 73-cent fare between Chestnut Hill and any part of Wellesley, and the resulting situation was described by the Commission as follows (5 P. S. C. Rep., p. 59):

...

Because of this low rate, in recent years a considerable number of persons of small means doing business in Boston have bought land and established homes in the Overbrook section. They now complain that, if the mileage system of charging should be adopted, their fare would be increased from 7 cents to 16 cents at the maximum, and, if the tickets are used, to 13.6 at the minimum, and they claim that such an increase would be ruinous to the district in which they live.

It was this situation, in particular, which led the Commission in its decision in that case to require the sale of "20-trip ticket books, limited to the person named thereon and good for a period of one month, which will enable the purchaser to ride between any two designated points upon the railway at a rate of 50 per cent in excess of the existing cash rate or of the trip ticket rate where such tickets are now sold." In the case of Overbrook, the fare available by the use of these ticket books is now 11 cents,

and it has proved to be the only point where there has been a demand for this special rate.

The Overbrook section is practically dependent upon the electric line for transportation to and from Boston, there being no station of the Boston and Albany road in the immediate vicinity. Under the proposed new schedule the cash fare would be increased to 20 cents per ride, the mileage rate to 17 cents, and the 20-ride monthly ticket rate to 14 cents. The remonstrants urged that this increase would be more than the residents of this section could stand, and would lead either to the use of the Boston and Albany steam line or the Middlesex and Boston electric line from Wellesley into Boston, or to the removal of population from that locality.

The desirability, under present conditions, of avoiding too severe a burden upon regular riders, who use transportation facilities daily in going to and from their work, has been recognized by the United States Railroad Administration in increasing the steam railroad passenger fares. While the single-ticket rate has been advanced in Massachusetts from 2 cents to 3 cents per mile, the commutation rates, although they are very low, have as yet been raised only 10 per cent. It seems to the Commission that, in view of its peculiar dependence upon the Boston and Worcester, the manner in which it has been built up and the character of the population, this principle could fairly be applied to the Overbrook section. This can be done by retaining the present commutation rates between points where the 20-trip tickets are now available, selling these tickets, however, on the basis of 50 rides. instead of 20 rides per month. This will confine their use more certainly to the regular riders to whom it is reasonable to make this concession. While the sale of such tickets will be a departure from strict logic in the application of the mileage zone system of charging, it does not differ in this respect from the minimum fare and the workingmen's tickets in Marlborough, and could be justified upon similar grounds. The financial results will not, in our judgment, be unfavorable to the road.

If, therefore, a supplement to the tariff now before the Commission, embodying this change, is filed, the schedule so modified will be allowed to take effect upon short notice.

For the Commission,

ANDREW A. HIGHLANDS,

'JULY 16, 1918. [P. S. C. 2178]

Secretary.

FITCHBURG AND LEOMINSTER FARES.

Notice of Fitchburg and Leominster Street Railway Company of proposed changes in rates of fare for passengers upon its railway.

CHARLES F. BAKER
WESLEY W. SARGENT

ROBERT N. WALLIS

for Fitchburg and Leominster Street Railway Company.

LYMAN K. CLARK for Town of Ayer.

JAMES H. McMANN for City of Fitchburg and Towns of Lunenburg and Shirley.

JAMES H. P. DYER for City of Leominster.

The Fitchburg and Leominster Street Railway Company owns and operates about 41 miles of track in the two cities indicated by its name and in certain nearby towns, the population in its territory in 1915 being as follows:

In the case of the town of Harvard the road merely runs through a corner of the town and furnishes no direct service to the community. The Lowell and Fitchburg street railway connects on the east at Ayer, the Northern Massachusetts at West Fitchburg, and the Worcester Consolidated on the south at Leominster. Between Leominster and Fitchburg, a distance of about four miles, the latter road also operates a parallel line.

The company was formed in 1892 by the consolidation of the Fitchburg Street Railway Company, organized in 1886, with the Leominster Street Railway Company, organized in 1891. In 1905 the Leominster, Shirley and Ayer Street Railway Company, organized two years previous, was merged on a share-for-share basis. The capitalization on June 30, 1918, was as follows: