ably expected to be higher than residence or rural rates. A differentiation between business and residence users under flat rates has heretofore been common, and this is additionally justified by the lower average calling rate which is usually characteristic of residence subscribers where flat rates are in vogue. The relations pointed out above apparently justify an adjustment in favor of residence users of moderate requirements even when measured rates are adopted. The policy of some telephone companies apparently is in this direction.

Progress is plainly being made in the direction of rationalizing telephone rates. One of its indications is found in the syllabus of an opinion delivered in a telephone rate case by the Wisconsin Railroad Commission, which says:

"No reasonable objection can be taken to a schedule of rates based upon the actual quantity of the service rendered."

It would be difficult to quarrel with this, provided “quantity" is construed to comprehend the number of messages or reasonable time-length and the distance of the message transmission; it being understood, however, that any comparison must rest between users needing service of equal quality. If the latter condition is not tacitly understood, the statement ought to be amended so as to read that "no reasonable objection can be taken to a schedule of rates based upon the actual quality of the service required and quantity rendered."

As also showing the tendency toward rationalizing rates, I will quote from a recent finding of the Massachusetts Highway Commission in respect to telephone rates in the large city of Boston and its surrounding important suburban districts:

Knowing that a certain revenue must be raised, the Massachusetts Commission has pointed out:

"That the district to be covered by a given telephone rate should be the territory generally used by the great majority of the subscribers therein, rather than a much larger territory, the greater portion of which is seldom used by the majority of subscribers.

"That the company should collect its revenues for calls between more distant portions of the territory from those who make use of such service, rather than from those who use only local

Massachusetts

Recommend

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service involving the use of a much smaller portion of the plant. That the suburban exchanges have of necessity so much occasion for calling into Boston and vice versa that the five-cent toll rate between Boston and suburban exchanges should be extended to cover the longest distance consistent with a well-balanced schedule and with fairness to the company.

ations

"That business service, at least, except for essentially local service, should be placed on a measured basis; and

"That so far as it is possible to do so, the rate schedule should be so made as to furnish telephone service to the small user at the lowest yearly charge that is fair and equitable, and, on that as a basis, adjusted to meet the requirements of the medium user."

Telephone companies still assert that no rational basis for telephone rates can be found. A few of the companies have adopted their rate schedules as the result of certain actuarial operations, but most of them have arrived at their schedules by the path of expediency and gradual modification. Few can support the reasonableness of their schedules on a foundation of facts produced from their accounting records, but I believe that this condition not only ought to be overcome, but is likely to be overcome. The willingness of the telephone companies to co-operate with supervisory commissions, in gathering, and, to some degree, in studying, cost and traffic statistics, is an encouraging indication. With accumulating statistics which give a clearer understanding of costs of giving service and the relation of speed and accuracy of service to its costs, each modification of rate schedules under the supervision of wisely-constituted commissions ought to approach closer to a rational basis. A more effective organization of cost keeping than has yet come into vogue should be insisted on. It must also be constantly remembered that traffic is a factor of the utmost importance, and traffic statistics must be made of record and carefully studied.

The telephone rate problem seems as complex as any facing the public service commissions, not excepting the problem of railroad freight rates; but telephone rates are usually made for the territory of an individual city, or, at most, an individual state, which gives ground for expecting more rapid progress in improving the basis of fixing telephone rates than can probably be reasonably expected for freight rates.

The Street Railway Situation In Detroit.

By PAUL LEAKE,

Secretary Wholesalers' and Manufacturers' Association, Detroit.

In accepting the commission to prepare a paper on the street railway situation in Detroit, and its possible or probable solution, I realize that there are about as many opinions as there are students of the urban transportation problem. I cannot please every one, but will endeavor to give a clear, unbiased statement of one of the most complex questions in our municipal life.

To put the cart before the horse, I will state that it looks as if the people, as represented by voters at the polls, do not want a settlement of the street car question, as at the time this is written both the Republican and Democratic nominees for mayor have injected into their campaigns the street car question, and strange to say, both are leaning to the ultra-radical, and bidding for votes on the municipal ownership basis.

In the presentation of this paper it must be understood I take neither side of the question, but endeavor to place the situation before you as a citizen and a taxpayer.

To handle the question intelligently it is necessary to give a brief historical review of the transportation question in Detroit.

Historical
Review

In the course of evolution, the horse car gave way to the electric lines, capitalists from Cleveland, including Tom L. Johnson, invaded Detroit and sought a franchise. Hazen S. Pingree, then mayor, and afterward governor, countenanced the granting of a franchise to what was then considered an independent line under the name of the Detroit Railway Company, and a grant of rights through the streets was given until 1924. It was specified that in consideration of the privileges granted by the city that the new railroad line was to give so-called three-cent fares, in other words, a straight five-cent fare when the cash was paid, but eight tickets for a quarter good from a little after daylight until eight in the evening, when six for a quarter rules.

It was understood, however, that transfers could only be given

to other three-cent lines on a ticket fare, and if a transfer were demanded on the old-line companies, working under a five-cent franchise, a five-cent fare was demanded. In consideration of the low rate of fare, the city in the grant given to the three-cent lines, specified that the city would do all the paving between the tracks. This has cost the municipality more than $57,000 from 1902 to date.

Single-truck cars were introduced, and with a rocking-horse motion, a hair-raising turning of curves, and a depleted foundation for the tracks, which the city was supposed to keep up, the patrons of the line of cheap transportation suffered alternately from nausea and bad temper, principally from the latter. In this way the trolley system was introduced into Detroit when the then poorly-developed storage-battery scheme proved a failure.

Inventive genius and financiers improved the situation, and in December, in fact on the last day of 1900, the Detroit United Railway was organized, with a capital of $12,500,000. It then acquired title to 187 miles of street railways within the city limits, including the three-cent fare lines. The properties acquired by the present owners of the street railways of Detroit came from three sources. There were the Detroit Citizens' Street Railway, the Fort Wayne & Belle Isle Railway, and the Detroit Electric Railway.,

It might be said in passing, that the primary development of a street railway system in Detroit was accomplished, as noted above, by the corporations which built the lines of the Detroit Citizens' Street Railway, and the Fort Wayne & Belle Isle systems, which have since become an integral, and one might say, the fundamental part of the Detroit United Railway.

In laying out the plan of the city, much was due to the splendid judgment of Judge Woodward, after whom our main business thoroughfare, leaving aside the Wall Street of Detroit, Griswold Street, was named.

The Judge, in laying out the plan, gave rise to the "Hub" idea, which has since been utilized by the Wholesalers & Manufacturers' Association of Detroit as a slogan of progress and prosperity; a cut having been gotten out and copyrighted, demonstrating that Detroit is "The Commercial Hub of the Middle West".

The Hub Idea

Taking the city hall as a pivotal spot, Judge Woodward laid out the city in an elliptical form, the center being the city hall. The streets reaching into what was then the country, but which is now well within the city limits, radiated from the common center of the city hall and the Campus Martius. This design simplified matters for the street railway builders and promoters. The main arteries of travel from this common center were Jefferson, Grand River, Woodward, Gratiot, Michigan and Fort. In the development of the street car service, naturally these main thoroughfares were utilized. This was done because they were the shortest distances between their terminal points and the center of the city.

The development of these main arteries of travel by the Detroit United Railway which acquired rights in the Detroit Citizens' and Detroit Electric Railways, necessitated the building of branch lines, among which were Myrtle Street, a branch of the Grand River Line, the Crawford Street, now the Greenwood loop of the Third Avenue Line. The present Trumbull Avenue line was a branch of the Michigan Avenue line. With the growth of the city, these lines were made main lines, as were the Brush and Chene Street lines.

In considering the present street car situation in Detroit, the fact must be taken into consideration that none of the so-called three-cent lines under the Pingree franchise hit any of these main radial streets, save in their entrance to the center of the city, where they were given running rights over the properties acquired by the Detroit United Railway.

According to the terms of the agreement of the three-cent lines, the Detroit United Railway has a right over the Detroit Citizens' lines until the expiration of the franchise of the latter in 1924. This being the case, the present corporation is in a position of independence, even though the franchises on the main five-cent lines have expired. In other words, the Detroit United Railway has so legallly fortified itself, that even if all of its franchises were declared null and void, due to the limit of life placed upon them in the original grant, it would still have a right to enter the city over the three-cent lines unmolested until 1924.

The only reason I have thus gone into detail, is to show the