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Ocm39986872-1918-HB-1240.Pdf (9.940Mb) HOUSE No. 1240 SPECIAL REPORT OF THE Public Service Commission RELATIVE TO THE FINANCES AND OPERATING METHODS OF THE Boston Elevated Railway Company. February, 1918. BOSTON: WRIGHT & POTTER PRINTING CO., STATE PRINTERS, 32 DERNE STREET. 1918. REPORT OF THE PUBLIC SERVICE COMMISSION RELA- TIVE TO THE FINANCES AND OPERATING METHODS OF THE BOSTON ELEVATED RAILWAY COMPANY AND THE CONTRACT OF SAID COMPANY WITH THE COMMONWEALTH. To the Honorable the Senate and House of Representatives of the Common- wealth of Massachusetts. Section 14 of chapter 373 of the Special Acts of 1917 is as follows: In order that the public service commission may make such further in- vestigation as it may deem necessary in order to determine whether or not the net income of the company may be increased by improved methods and practices, said commission may expend for the purposes of such in- vestigation a sum not exceeding fifteen thousand dollars, for which it shall be reimbursed by the Boston Elevated Railway Company, and the public service commission shall report to the next general court, on or before the first Monday in February, whether section ten of chapter five hundred of the acts of the year eighteen hundred and ninety-seven should be repealed. This act is entitled “An Act Relative to the Property, Serv- ice and Capitalization of the Boston Elevated Railway Com- pany,” and was the result of a report made last year to the General Court by a special commission consisting of the lieuten- ant-governor, the president of the Senate, the speaker of the House of Representatives, two members of the Senate, four members of the Plouse, the Public Service Commission and the Boston Transit Commission, appointed under chapter 158 of the Resolves of 1916 “to consider the financial condition of the Boston Elevated Railway Company and what changes, if any, should be made in existing laws relative to the company to enable it to meet the reasonable demands of the public for the extension and improvement of its system of transportation; also the advisability of any changes in subway rentals, any reduc- 4 BOSTON ELEVATED RAILWAY COMPANY. [Feb. tion in taxes and any increase in fares or changes in the present transfer system.” The report of the special commission was printed as Senate Document No. 344 of the year 1917. What was, on the whole, its most important recommendation namely. State acquisi- tion of the Cambridge subway ■—• was not adopted by the Gen- eral Court. Certain lesser recommendations, tending to im- prove the financial condition of the Boston Elevated Railway Company, were followed and provision was made for further inquiry by the Public Service Commission along the lines above indicated. The report now made should, therefore, be regarded as a continuation of and supplement to the report of the special commission last year. Chapter 373 of the Special Acts of 1917 became effective on June 15, 1917. Shortly afterwards the Commission engaged John A. Beeler to make the special investigation contemplated by section 14. Mr. Beeler is a man of long, practical expe- rience in the street railway business, and for several years was vice-president and general manager of the Denver Tramways Company, in charge of operation. His investigation began in July and ended in November. The work received his direct and continuous personal attention, and he was assisted by five men in his own employ and by the inspection department of the Commission. The special statute did not direct the Commission to hold public hearings before reporting to the General Court. Ordi- narily it would have done so, with or without instructions, but the circumstances in this case were unusual. The real issue —■ namely, whether or not legislation is desirable for the financial relief of the company —is the question which was considered by the special commission last year. Numerous public hearings were held by that body, of which this Commission was a part, and later by a committee of the General Court. Nor can any action be taken this year until full opportunity has been given for hearings before some legislative committee. Little benefit could be gained prior to the publication of Mr. Beeler’s report, and the time necessarily consumed in his investigation made subsequent hearings impracticable without material delay. Under the circumstances it seemed best to avoid such delay 1918.] HOUSE No. 1240. 5 and to submit the results of the investigation to the General Court as soon as possible for public consideration and discus- sion, together with the Commission’s views with respect to the situation. The report is submitted in two parts, the first part containing a statement of the essential facts and the second containing discussion and recommendations. PART I. STATEMENT OF FACTS. History of the Company. A brief summary of the history of the system of railways which the Boston Elevated Railway Company now operates is desirable. Between 1852 and 1886 seventeen companies re- ceived charters to build horse car lines in Boston or its imme- diate suburbs. By 1886 these companies had been reduced by consolidation or lease to five, as follows: Boston Consolidated Street Railway Company Cambridge Railroad Company. Lynn and Boston Railroad Company. Metropolitan Railroad Company. South Boston Street Railway Company. Generally speaking, 5 cents was the fare between the center of the business district and the suburbs, but to Newton, Water- town, Arlington and points in Medford and Malden the rate was 10 cents. Rides beyond the center of the business district or from one suburb to another, or rides involving a transfer, as a rule cost 8 cents. West End Street Railway Company. The West End Street Railway Company -was organized in 1887 as an incident to a land development enterprise involving the widening and relocation of Beacon street in Boston and in Brookline. The tracks of the company were laid in this widened street and its entire stock was originally owned by the West End Land Company. Under chapter 413 of the Acts of 1887 6 BOSTON ELEVATED RAILWAY COMPANY. [Feb the West End Street Railway Company acquired and merged all other street railway companies operating in Boston, except- ing the Lynn and Boston. The normal rate of fare on the con- solidated system became 5 cents and certain free transfers were provided. Eight cents was charged, however, for some of the longer rides requiring a transfer. Boston Elevated Railway Company. The Boston Elevated Railway Company was originally in- corporated by chapter 548 of the Acts of 1894 and was author- ized to build an extensive system of elevated railways in Bos- ton proper, Charlestown, South Boston, Roxbury, Dorchester, Brookline, Cambridge, Somerville, Everett, Chelsea and Re- vere, to bn constructed “ according to the plans or systems shown in the patents granted to Joe V. Meigs, or according to such other plans or systems, except the system now in use in New York, known as the Manhattan system” as the Board of Rail- road Commissioners might approve. Motive power was not specified. In 1896 this charter was purchased from the original pro- moters by the interests which have since dominated the com- pany, and amendments were sought which were granted by chapter 500 of the Acts of 1897. The more important were as follows; —• (1) The restriction upon the use of the “Manhattan system” was re- moved and the company was authorized to construct lines of elevated railway “according to such plans or systems as the Board of Railroad Commissioners may approve, to be operated by electricity or other mo- tive power except steam.” (2) The locations granted in 1894 were modified to permit the use of the Tremont street subway, then under construction, between the North station and Pleasant street. (3) The company was authorized to lease the West End Street Railway Company upon such terms as the Board of Railroad Commissioners might approve, and to operate rapid transit trains in the Tremont street subway. (4) The locations of the elevated lines or structures were made irrevo- cable, except through condemnation proceedings. (5) A provision was inserted, governing fares, taxes and transfer privi- leges. This is the “section 10” upon which the opinion of the Commission is now sought. It will hereinafter be considered at length. 1918.] HOUSE —No. 1240. 7 West End Lease. The West End Street Railway Company was leased on Octo- ber 1, 1897, for a term of 24 years, 8 months and 9 days, ex- piring on June IQ, 1922, at a rental of 8 per cent upon preferred stock and 7 per cent upon common stock. The original con- tract provided for a 99-year term, but this was reduced by the Board of Railroad Commissioners so that the lease should ex- pire upon the same day as the fare restrictions provided by section 10 of the 1897 statute. The Board also reduced the rate of dividend upon common stock from Bto 7 per cent. (See 29th Annual Report, 1898, pp. 140-155.) In 1903 the Boston Elevated Railway Company also leased for 99 years about 25 miles of track in the West Roxbury dis- trict of Boston owned by the Old Colony Street Railway Com- pany, and in 1907 it further leased a short stretch of track in East Boston operated by the Boston and Northern Street Rail- way Company. West End Consolidation. Chapter 740 of the Acts of 1911 authorized the West End company to sell and the Boston Elevated company to purchase the property and franchises of the former upon the expiration of the lease in 1922. This transaction has since been voted by the stockholders of both companies. Upon its consummation.
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