from increases in fares have been so disappointing that the credit of the companies, in general, is very poor.

This is true not only in Massachusetts but all over the country. Street railways have very generally ceased to be an attractive field for the investment of private capital. Even if net earnings should greatly improve, we are inclined to believe that it would be a long time before capital would flow in on anything like reasonable terms. Restoration of confidence is a long, slow process; and this is especially true where, as in this case, the properties involved are not new, have not been maintained in first-class condition, and are burdened with a substantial amount of accrued depreciation for which no provision has been made.

"It should never be forgotten that our public utility companies are not finished. They are in process; they are constantly calling for new capital and of recent years in increasing amounts. They must be kept on good trading terms with the investing public or the whole experiment of private ownership and public regulation of these public utility companies will fail. It is as necessary to attract capital into the public service as it is to prevent the mismanagement of these companies or extortion by them." "An impecunious street railway is a poor public servant; often it is an unsafe public servant." These are quotations from the opinion in the Middlesex and Boston case, decided by this Commission in 1914, and they are as true now as they were then. But it is well to face the facts squarely and, stating them frankly, we see little prospect, with a few exceptions, of placing the street railways of Massachusetts "on good trading terms with the investing public" without some radical change in present conditions.

Fares.

The sole means at present of improving the financial condition, credit, property and service of the railways, for all these things hang together, is to levy a heavier tax upon the car rider, in short, raise fares. Two objections may be made to this method. One is that it does not produce the results which it is intended to accomplish; the other is that it does produce results which are injurious to the community.

No one can truthfully say that the raising of rates has not had a fair trial in Massachusetts. The 6-cent fare originated

here in 1905, and of late all manner of rates have been introduced. We now have 6, 7, 8 and 10-cent fares, and various "zone systems" which have even more sharply increased the charge for many rides. In the Metropolitan district of Boston fares have risen from 5 cents to 8 cents, with public trustees in charge of the property and without the contests and delays which at times have been incident to proceedings before this Commission. Moreover, all the companies have the opportunity, if they so desire, to accept the "Service-at-Cost" Act and the sliding-scale adjustment of rates to fluctuating costs for which it provides.

No other part of the country has been more liberal in its treatment of the railways, but the result has not been what was hoped. With all their raising of fares, our companies seem little nearer financial salvation. It has become an accepted principle that the increase in revenue is never in proportion to the increase in rate. Higher fares discourage riding, and what the roads gain on the one hand they lose, in part, on the other. The benefit which they receive is clearly less than the burden upon the car rider; and, if the process is carried much further, there may be no benefit at all. Few will dispute that the tariff proposed by the Bay State company, with its 10-cent minimum fare, its contracted city zones, and its high charges on the country lines, represents the maximum from which profit may be anticipated, and there are many who think it goes beyond the maximum.

Viewing the matter in the most favorable light, there is a chance that higher fares will, in time, cure the financial ills of our street railway companies, but the chance does not seem great, and there is no immediate prospect of such a cure. In the meantime the increased rates are injuring the community in ways which are evident.

When a street railway by raising fares discourages riding, it becomes at once less useful, less of a public servant; and this effect is cumulative. The tendency of a financially hardpressed company, when its traffic falls off, is to reduce service, and this leads to still more loss of business. It is a question, indeed, whether some of our railways have not lost as much traffic from curtailed service as they have from increased fares,

and the two go hand in hand. More and more the burden falls upon those who ride from necessity rather than convenience, for the latter form of riding is the vanishing factor. A tariff such as the Bay State company proposes starts frankly with the assumption that few will ride who do not have to, and involves practical abandonment of the field of short-haul, convenience traffic.

Nor is this all. As the charges increase, the tendency of those who find it necessary to ride is to change their status, by seeking employment or residence where the necessity will no longer exist. To what extent this has yet been done, it is difficult to say, but no one who has given thought to the situation can doubt that it is a serious danger if fares go higher, or even if they remain at their present level, — especially if a period of business depression should set in. It is a danger attaching particularly to the so-called "zone system", which attempts to save the short-haul riding by casting the burden upon the long-haul, and often doubles or trebles the charge from a city center to nearby suburban points. Consistent as it is with cost-of-service principles, this system is inconsistent with the policy which has been followed in the past, and under which our population has been distributed.

Three-cent or even lower fares might, in years gone by, have been enjoyed in the inner Boston district through the establishment of a "zone system", but it was thought wiser to allow the short-haul business to pay for the long-haul and extend a uniform fare of 5 cents over as wide a territory as possible, thus spreading population and avoiding congestion. Upon this theory the Metropolitan district has been built up. Take the case of West Roxbury, situated some miles from the center of the city and filled with people of very moderate means. Under any "zone system" which might now be devised, this section of Boston would lose the advantage of the present uniform fare, suffer a disproportionate increase, and cease to be a suitable and attractive place of residence for many of the people who now live there. This is but one of many similar cases which might be cited all over the state. The radical difference between 5-cent and 10-cent suburban territory has been well recognized in real estate circles.

The choice in raising fares is therefore between a horizontal increase, which discourages short-haul riding, and a "zone system", which upsets established conditions, invites congestion, and stands in the way of the development of the country districts. In the long run, however, the results are equally undesirable and not very different, for a horizontal increase tends to become so high that it has a similar effect upon living conditions, and it is difficult to preserve a low fare in the central area of a "zone system", as further increases in rates become necessary.

Incidental disadvantages of higher fares are the incentive to competition and difficulties in collection. No matter how logical and convincing a case may be made against the largely irresponsible and unreliable operation of jitneys, it is difficult to enlist public opinion in opposition so long as the street railways charge higher fares and furnish poor service. Experience has also shown that the collection of fares, where pennies are involved or short zones are introduced, is subject to many difficulties and embarrassments which unfavorably affect both revenue and operation.

Summing up the matter, no one can view the present situation with optimism, or believe that the policies and methods now pursued are likely, unless general conditions change radically, to bring either good service or good credit, or to further the healthy growth and development of the community.

It is far easier, however, to fix upon the goal to be reached than to point the way to it, much less difficult to know what ought to be done than how to do it. Briefly stated, the essential needs, from the standpoint of the future welfare of the state, are

The Issue.

(1) Restoration of credit, or some other means of providing the capital necessary to place the street railway properties in condition for first-class service.

(2) Return to a basis of fares which will enable the railways to play their proper part in community life.

The prime necessity is good service, and it cannot be had without rehabilitation and improvement. Next to good service is a system of fares which will make the service as useful as possible, and help rather than hamper the development of the community on healthful and economically sound lines. Massa

chusetts is not blessed with much natural wealth or with many geographical advantages, and other parts of the country are beginning to challenge her place in the commercial world. If it is to be retained, it will require the best possible use of her resources, foremost among which are her industries and her people. This means, among other things, the maintenance of good living and labor conditions. In this connection nothing is more important than cheap and good transportation facilities which will spread population, encourage living in the country districts, and give labor the mobility which the welfare of our industries demands.

As we view it, present conditions in street railway transportation, and still more the conditions which are in sight, both as to service and as to rates, are opposed to the best interests of the state. The only alternative, however, is some plan by which a portion of the cost of service will be taken from the shoulders of the car rider and be met by some form of general taxation. This suggestion is radical but, as above indicated, not wholly unprecedented. In the long run, poor transportation at high rates will damage the mill owner, the merchant and the land holder. In the long run, good transportation at low rates will operate greatly to their advantage. This fact lies at the root of our policy of state highway construction, and years ago it received clear recognition in the early days of steam railroad building, when both state aid and municipal aid were freely granted.

It is necessary to look beyond today and into tomorrow, to balance future benefits against present burdens. What we are now suggesting is not very different from what the steam railroads for a long time have actually been doing. They sell commutation tickets at very low rates, not because there is any direct profit, but because they believe that it is good policy to do so, in the public interest and ultimately in their own. The burden is borne by freight and other forms of traffic. In the present instance, the street railways have no other business which can carry the load and, if a portion of it is shifted from the car-riders, it must be borne by the community as a whole.

Even if the principle be conceded, however, it is not easy to apply it. In considering specific plans, an important limiting