Municipal Ownership 
 
 of 
 
 Street Railways 
 
 With an Analysis of the Accounts of the 
 City of Glasgow Tramways 
 
 By JAMES MARWICK, C. A., 
 
 of Marwicfc, Mitchell & Co. 
 Chartered Accountants. 
 
 Reprinted from The Wall Street Journal of June 3, J905 
 
B 
 
MUMOIPAL OWNERSHIP OF STREET 
 RAILWAYS. 
 
 With an Analysis of the Accounts of the City of Glasgow 
 Tramways. 
 
 BY JAMES MARWICK, C. A. OF MARWIOK, MITCHELL & OO. 
 
 [Chartered Accountants, 79 Wall Street, New York, Chi- 
 cago, Toledo and Minneapolis.] 
 
 Whether or not municipal ownership of public utili- 
 ties, and more particularly of street railways, has proved 
 to be to the best interests of the communities in which 
 they are operated, is a question to which students of f 
 existing conditions might well prefer to withhold their 
 answer. Economists may agree that theoretically all 
 public utilities should be controlled by municipalities,' 
 but they would not be likely to commit themselves to a 
 definite statement that the public would benefit by aj 
 transfer of street railway systems from well managed! 
 private corporations to political parties temporarily in| 
 control of city governments whatever their politics might! 
 be. Eliminate the political element and establish a de- 
 partment of street railways under a thoroughly compet- 
 ent and permanent management, let its policy be pro- 
 gressive, let it have command of adequate capital to 
 expend at the right time on repairs and extensions and 
 let no interference be permitted under any circumstance^ 
 in the hiring or disciplining of employees. Then andi 
 then only does it appear likely that municipal ownership! 
 can be to the advantage of the public. 
 
 These conditions exist in a large measure in the oityj 
 of Glasgow, which is generally regarded as having de-j 
 
2 
 
 moiistrated unequivocally that its municipal ownership 
 has been successful. From the American progressive 
 point of view, however, it has yet to make tremendous 
 progress before it can be admitted to be a success in the 
 full sense of the word. It is a success in so far as it ia 
 making money and affording better service than that 
 afforded by the private corporation which previously 
 operated its system. But the private corporation was* 
 practically restrained from making any large expendi- 
 tures to improve the system as it was not accorded such 
 a franchise as would assure its having an opportunity 
 of reaping the benefit of improvements made. 
 
 It was, therefore, left to the municipal government 
 of Glasgow to replace the old horse cars with electric 
 traction. That such a change should have resulted in a 
 great increase in travel was only natural. Consequently,' 
 the increase should not be attributed to the superiority 
 of municipal management. Similar increases in patron* 
 age were experienced in the cities of America on tho 
 installation of cable and electric traction by private cor- 
 porations. 
 
 The lesson which should really be learned from ex- 
 perience does not appear to be generally recognized. It 
 is that if the citizens of a municipality are to enjoy 
 adequate transportation facilities and service, they must 
 either (a) grant to a private corporation long term or 
 perpetual franchises, with the passenger fare, carrying 
 transfer privileges fixed at a reasonable rate and the taxes 
 restricted to some percentage which will allow fair com- 
 pensation to the municipality for the concessions granted 
 or (b) have their municipal government acquire and 
 operate the system. If one of these conditions is not 
 accepted inadequate service and constant friction is as- 
 sured. Short term franchises and low fares will not 
 attract the capital necessary to insure a well equippe4 
 and operated system. The capitalist who invests hii 
 money in the street railroad plant has just as much rigjxt 
 to require that his investment be absolutely secured aa 
 the citizen has to expect him to afford reasonable trans- 
 portation service. 
 
 A wave of antagonism to granting to private cor- 
 porations long term or perpetual franchises, even with 
 
reasonable purchase clauses included, appears to have 
 swept over the whole country. Municipal ownership is 
 the demand of the reformers and their numbers are ever 
 increasing. Therefore, it appears that a thorough test 
 of the efficiency of municipal operation cannot too soon 
 be made in one of the larger cities. No more thorough 
 test could be made than in Chicago. Here the street 
 transportation conditions have for years been most un- 
 satisfactory and inadequate and the franchises are in a 
 legal tangle involving complications which the law courts 
 alone can unravel. Consequently, the time would now 
 appear ripe for the test of municipal ownership but not 
 confiscation. The value of the properties and franchises 
 which the corporations may be required to transfer should 
 be adjudicated with due regard to what is fair alike to 
 the capitalists and to the citizens. No exaggerated values 
 should be put forward by either party in apparaising the 
 properties whether tangible or intangible. 
 
 Should the city of Chicago acquire it* street railways 
 it will have very different conditions with which to con- 
 tend from those which exist in Glasgow even at the 
 present time. There the total miles of single track 're- 
 presents only 1.35 miles per 10,000 of population as com- 
 pared with 5.85 miles in Chicago and 7.3 miles in Pitts-; 
 burgh. There the population only averages 189 trips per- 
 capita annually as compared with 232 trips in Chicago 
 and 263 trips in Pittsburgh. There the average number 
 of passengers per mile of single track averages 1,400,000 
 as compared with less than 400,000 in Chicago and 
 360,000 in Pittsburgh. 
 
 The following figures taken from the last report of 
 the Census Bureau show the conditions in six of. the 
 largest cities of America, compared with those of Glas- 
 gow for the year ending May 31, 1904. 
 
 Track 
 Miles 
 
 / Passenfrerg Per , Per 
 
 Milea Mile 10,000 
 
 of Car Inhab- of Car Pop- 
 
 City Population. Track. Mileage, itant. Track. Mile, illation. 
 Glasgow.... 1,000,000 185.00 16.291,082 189 1,400.000 11.6 1.85 
 Chicago 1,769.951 1,086.24 102,866,407 989 895,985 4.0 
 
 ittsburgh.. 640,880 469.4T 84,811,111 963 869,197 4.9 783 
 
 New York.. 8,548.996 1,299.10 180,499,586 966 726,416 5.9 8.66 
 
 Philadelphia 1,293,697 517.58 61,175,495 956 640,165 5.4 4.00 
 
 Boston 997,994 461.68 47,524,794 248 605,179 4.8 487 
 
 Kansas City. 937,042 181.24 15,979,864 941 815,817 8.6 7'.66 
 
The contrast in the mileage figures contained In this 
 statement is remarkable as it indicates the existence of 
 a condition in Glasgow with its million of population 
 which is in direct contradiction to the policy of munici- 
 palities in America as also to one of the fundamental 
 principles of rapid transit. Did such a condition exist in 
 an American city it would not be tolerated, but such an 
 outcry would be raised against the company in control of 
 the franchise as would force it to change its policy. 
 
 In making a success from a money point of view, the 
 mundcap<ality of Glasgow has apparently almost entirely 
 overlooked the much broader benefits which accrue to a 
 city from the distribution of its residents over a wide 
 area, from the substitution of homes m the suburb?? for 
 the overcrowded tenements of the city. Contrast the lot 
 od: the child of the city with that of the country or suburb 
 polluted air to breath, asphalt or stone streets for a 
 playground as against the fresh air from the country, the 
 grass and the flowers which bring home even to the par- 
 ents themselves a realization that there is more in life 
 than asphalt and stone, smoke and business. Does the 
 piling up of a sinking fund on the top of ample depreda- 
 tion and the payment of liberal bonuses to the city treas- 
 ury in addition to interest on its investment compensate 
 for the loss of that which is the every day privilege of 
 th American citizen? Surely the moral and material 
 welfare of the people must outweigh more than 
 commercialism. Credit is, however, due to Glasgow 
 for it is in advance of any other city in the United King- 
 dom and it proposes to build 41 miles of additional track. 
 Thereafter its total of 198 miles of single track will ex- 
 ceed that of any other system in Europe, excepting Ber- 
 lin, which outranks all other cities on the continent of 
 Europe, having 1.72 miles of track per 10,000 of popula- 
 tion. * 
 
 The official statistics of the census bureau demon- 
 strate that following the extensions of rapid transit sys- 
 tems in America there has been a tremendous increase in 
 the number of residents in suburban districts and a great 
 expansion of thes-e districts coincident with a contraction 
 in the density of the city districts, excepting those occu- 
 pied by the poorest glasses, who cannot afford to pay 
 
a minimum rate of fare. It hardly seems possible that 
 a similar^ extsnsion of the tramway system of Glasgow 
 would not have a similar effect in opening up attractive 
 suburban districts In this vicinity. Thus the mass of well- 
 to-do- citizens would be encouraged to seek homes therein 
 in preference to living in their terraces and tenements in 
 the center of the city and the sooner that these are 
 abandoned the better for the whole community. Were 
 mora of the progressiveness of the American introduced 
 into the system, city dwellers would soon be accorded every 
 facility to reach the suburbs in quick time and at reason- 
 able expense. 
 
 An impartial investigation shows conclusively that it 
 is not municipal managment but the contraction of tiho 
 population within narrow limits and the restricted street 
 mileage, only 65 miles for a population of 1,000,000, that 
 permits of such profits as those shown in the statement 
 of accounts of the city of Glasgow for the year 1904. A 
 franchise such as that enjoyad by the municipal managers 
 could be sold for a high price in America and strong com- 
 petition would be developed for a further franchise that 
 would extend over the districts not already occupied. 
 Thus the total mHeaga could be brought more into accord 
 with the American standard of a city of its magnitude. 
 Such facts seem to demonstrate that municipal ownership 
 has not yet been made a success in the broadest sense of 
 the word even in Glasgow. This, however, does not alter 
 the fact that a test of municipal control is not undesirable 
 in America. 
 
 The great obstacle to the wider distribution of the 
 population of Glasgow is the system of graduated fares 
 now in oparation. A somewhat similar system has al- 
 ready bsen proved to be undesirable in Germany and has 
 been abandoned. In America the system has been every- 
 where rejected. The system is as follows:. "Each route 
 is divided into half-mils stages, the fare for this stage be- 
 ing a half penny (lc;). The fare for any four half -penny 
 stages is one penny (2c.) and for any six, three half pen- 
 nies (8c.), any sight, two-pence (4c.) and so up to four- 
 pence (8c.). In 1904, the total number of fare passen- 
 gers carried was 188,962,610 as compared with 410,284,094 
 
in Chicago and 168,632,339 in Pittsburg, but the average 
 fare in Glasgow was slightly less than two cents compared 
 with the 5-cent fares of Chicago and Pittsburg. This im- 
 plies that the average distance travelled in Glasgow was 
 somewhere between a half a mile and two miles. What 
 tha comparative distance! were in Chicago and Pitts- 
 burg, there is no means of ascertaining, as a passenger 
 can travel to the extreme limits of their systems for one 
 fare of five cent. For this reason statistics are frequent- 
 ly submitted to show that transportation in this country 
 is cheaper than in Glasgow. Though it might be cheaper 
 if everyone travelled long distances, in practical operation 
 it is net so, for over 30% of the passengers pay the mini- 
 mum fare of 1 cent and 61% the 2-cent far-a, leaving less 
 than 9% to pay 3 cents or over, their fares representing 
 1.67% of the total passenger revenue. 
 
 Taking into account the population of Glasgow and 
 the distance of the commercial and manufacturing cen- 
 ters from the suburbs, these statistics are sufficient evi- 
 dence that the system of graduated fares acts as a pre- 
 mium to deter people from living in the suburbs. The 
 pernicious effects can only be obviated by following the 
 example of Germany and abandoning the system. London 
 has already set a partial example to the rest of the United 
 Kingdom by adopting the uniform fare in its electric sub- 
 way, known as the "tuppenny tube." 
 
 The management of the Glasgow corporation tram- 
 ways is to be congratulated on the comprehensive charac- 
 ter of the report, statements of accounts and statistics of 
 operation which it issues. While some few of the street 
 railway corporations of America do issue annual reports 
 which afford considerable information to their stockhold- 
 ers, none of them are so complete as that of Glasgow. 
 The great majority of American companies, however, do 
 not publish any reports, or only issue statements of the 
 most meager character. A striking feature of the re- 
 porta published by Glasgow is the account in which the 
 details of the capital expenditures are set forth. They 
 are so clearly stated that the cost of the plant or equip- 
 ment in each department of the system can readily be as- 
 certained, as also the amount of depreciation written off 
 
from year to year. This very publicity is a safeguard 
 against the financial schemes which have been BO detri- 
 mental to the stockholders of metropolitan companies of 
 this country, as well as to the public who have in conse- 
 quence had to submit to inferior service. In these ac- 
 counts there are no undistributed construction expendi- 
 tures. Each item of expense is classified under its appro- 
 priate head. Further, the accounts are regular'^ audited 
 by chartered accountants of high standing, thoroughly 
 trained in their profession and characteristically inde- 
 pendent in the discharge of their duties, who would not 
 tolerate any irregularities or permit of any equivocation. 
 That the accounts are not submitted in the same form 
 as that generally approved in America is of relatively 
 little importance. The differences are merely matters of 
 detail. 
 
 The capital account, which records the expenditures 
 by Glasgow on construction and equipment, shows a 
 charge of $10,226,450, of which $9,916,525 was borrowed 
 money. This amount has, however, been reduced to 
 $8,879,835 by means of sinking fund accumulations. The 
 present capital liability thus averages $60,000 per mile 
 of single track. In comparing this liability with that of 
 American cities some allowance has to be made for the 
 differences in cost of labor and material in the two coun- 
 tries. 
 
 Comparative capital liabilities per track mile where 
 the overhead trolley system is in general use: 
 
 Mileage Liabilities 
 
 City. Electric. Cable. per mile. 
 
 Glasgow *147.50 $60,202 
 
 Chicago 826.82 91.70 109,537 
 
 Pittsburg 464.25 5.22 185,170 
 
 Boston *451.68 97.353 
 
 Philadelphia 517.53 165,085 
 
 8t Louis 896.21 198,647 
 
 Kansas City 148.24 33.00 119,606 
 
 *The average miles in operation during the year in 
 Glasgow was 135. The Boston mileage includes 16.02 
 miles of elevated track which adds considerable to the 
 average cost of construction. 
 
8 
 
 The following statement explains the relatively low 
 average liabilities per mile of track in Chicago: 
 
 Length Cable Liability 
 
 Name of company: of track. traction, per mile. 
 
 Chicago City Railway Co. 222.50 41.10 $80,899 
 
 Chicago Un Traction Co. 305.32 50.60 268,577 
 
 Chicago Con Traction Co. 206.51 161,032 
 
 Sundry railway companies 183.19 47,462 
 
 The system of publicity in accounting methods as 
 adopted in Glasgow tends to keep down the capital liabili- 
 ties, as t!he cost of all property owned is shown in detail. 
 No item is included in the statement of assets at exag- 
 gerated values. Whatever is sold, destroyed or other- 
 wise disposed of or becomes obsolete is written off. Thus 
 the balance sheet is as approximately correct a statement 
 .of actual facts as can be prepared. 
 
 REVENUE ACCOUNT. 
 
 The following statement shows the general rejults 
 of the operations of the Glasgow Tramways for the year 
 ending May 31, 1904. The statement is framed so as to 
 show the results for each 1,000 of inhabitants so that a 
 comparison may be made with the average results obtain- 
 ed in all the cities of America having 500,000 or more 
 inhabitants. Such a comparison cannot be absolutely ac- 
 curate, but it is approximately so, the data being b<?scd 
 on the report of the census 'bureau. To ascertain the 
 gross figures for Glasgow add 000 to the figures stated: 
 
CONDENSED REVENUE ACCOUNT. 
 
 Oity of American 
 
 Glasgow. oitiet. 
 
 Operating earnings $3,482 11,731 
 
 Operating expenses 2,238 6,534 j 
 
 Net earnings $1,244 $5.197 
 
 Income from other sources 33 240 
 
 Earnings less operating exp.. . $1,277 $5.487 
 
 Deductions from income 1,065 2,079 
 
 Tfcxea 169 779 
 
 Interest 801 2,181 
 
 Sinking fund 282 .... 
 
 Special depreciation 801 
 
 Miscellaneous ., 62 19 
 
 Net income $212 2,458 
 
 Dividends , 121 2,034 
 
 Surplus $91 $124 
 
 In the case of Glasgow, the dividends represent a 
 cash payment to the city fund, known as the common 
 good, while the surplus was transferred to a general re- 
 serve fund which is used for defraying extraordinary ex- 
 penses on buildings, etc. 
 
 This statement develops very important differences 
 between the operations as conducted in American c'tles 
 and Gksgow. The most conspicuous of which is the rela- 
 tively low earnings per capita in Glasgow. They aver- 
 age only $3.48 as compared with $11.73 in American 
 cities. The Glasgow charge for taxes per capita aver-, 
 ages $0.17 as compared with $0.78 and for interest and, 
 dividends $0.42 as compared with $4.12 in the American j 
 cities. 
 
 The ratio of the operating expenses to the operating j 
 earnings is for Glasgow 64.27% and for American citietj 
 55.70%. The operating expenses of Glasgow, however,' 
 includes appropriations for renewals and depreciation ag- 
 gregating 19.38%, exclusive of the special depreciation 
 of 8.64% deducted from income. An analysis of the ex- 
 
10 
 
 penses shows remarkable differences in various expenses. 
 These are shown in the following statements: 
 
 Ratio of expenses to earnings: 
 
 City of Glasgow Amer. 
 
 Department of Depreciation Cities 
 
 operating expenses. Incl. Am't. Excl. Am't. 
 
 Ma. of way & struct. .. 16.52 12.39 4.13 4.25 
 
 Main, of equipment... 12.38 6.99 5.39 7.12 
 
 Op of power plant 2.83 2.83 7.97 
 
 Operation of cars 27.50 27.50 25.73 
 
 Gen. exp., incl. taxes.. 5.04 5.04 10.63 
 
 Special depreciation . . 8.64 8.64 
 
 Total oper. expanses. 72.91 28.02 44.89 55.70 
 
 Taxes 4.66 .... 4.86 6.64 
 
 These percentages show that the management of tho 
 Glasgow tramways appreciates the necessity of making 
 ample provision for renewals and depreciation. Their 
 action in this respect is in striking contrast with that of 
 almost every company operating street railways in Amer- 
 ica. The argument that a franchise increases in value 
 in a ratio that more than offsets the depreciation is a very 
 unsafe one for the stockholders of street railway com- 
 panies to accept as an excuse for the failure to make such 
 provisions. There may be some f orea in it where the fran- 
 chise is exclusive and perpetual provided the taxes, includ- 
 ing franchis-9 taxes, are also restricted to a certain maxi- 
 mum percentage of earnings. In all cases where the 
 franchise is for a limited period, the failure to make reas- 
 onable provision is absolutely and unjustifiable and cer- 
 tain to result in trouble to the stockholders, sooner or 
 later, when borrowing powers are exhausted, as also to 
 the citizens, for they will inevitably suffer from bad ser- 
 vice. This subject is of such importance to all communi- 
 ties that the rtaes of depreciation charged in Glasgow are 
 here stated in detail: 
 
11 
 
 Depreciation. Per cent, of cost. 
 
 Electrical equipment of lines 3.09 
 
 Buildings and fixtures 2.50 
 
 Powar stations, etc., plant 5.00 
 
 Workshop tools 7.50 
 
 Can 7.50 
 
 Electric equipment of cars 7.50 
 
 Miscellaneous equipment 5.81 
 
 Furniture 7.50 
 
 A permanent renewal fund is annually credited with 
 $2,182.50 per mile of single track. 
 
 The permanent way renewal fund now has a balance 
 at its credit of $936,079. During the year there was ex-' 
 pended from this fund $22,893 in addition to the amount 
 charged against earnings. Irrespective of the 12.39% set 
 aside in renewal funds, the amount thus actually expend- 
 ed in Glasgow on repairs and renewals, was equal to 
 4.80% of the earnings as compared with 4.25% in the 
 case of American cities. In the American cities no re-, 
 nevral funds were set aside. 
 
 It has further to be observed that, in addition to the 
 depreciation charges, a special sinking fund of 2% of the 
 amount borrowed, with 3% interest on accumulations, is 
 annually set up. The accumulations in this fund should 
 'be sufficient to discharge the total indebtedness of the 
 property in thirty-one years. Exception may, however, be 
 taken to the fact that neither the depreciation and re- 
 newal fimds nor tho sinking fund is specially set aside in 
 cash or high grade marketable securities, but that the 
 funds so created are invested in extensions of the sys- 
 tem. As the great object of renewal funds is to have the 
 cash available when the renewals become desirable, the 
 funds should be invested in readily realizable securities. 
 
 In the following statement a comparison is made be- 
 tween the ratio that the separate items bear to the total 
 amount of the operating expenses in Glasgow and in 
 America. So that the comparison may be the more ef- 
 fective, the largo amounts charged for depreciation in the 
 Glasgow accounts have been eliminated and the actual 
 cash expenditures only shown. The American percent- 
 ages are tihe averages of seventeen of the largest operat- 
 ing companies in America. 
 
12 
 
 Percentage of total operating expenses assignable to: 
 
 City of Cities of 
 ** Glasgow. America 
 
 Maintenance of way and structure, total 10.52 8.1^ 
 
 Track and roadway 6.35 5.2 
 
 Electric, cable, etc., lines 1.97 2.2 
 
 Buildings and fixtures 2.20 .7 
 
 Maintenance of equipment, total 11.80 12.3 
 
 Steam and electric, etc., plant 1.67 1.7 
 
 Oars 5.82 6.2 
 
 Electric, cable, etc., equipment of cars 3.34 3.8 
 
 Miscellaneous equipment 97 1.1, 
 
 Operation of power plant, total 6.21 12.7, 
 
 Power plant wages 2.57 2.7J 
 
 Fuel for power 2.99 7.9 
 
 Water for po-wer .27 .5 
 
 Miscellaneous supplies and expense . . .88 A 
 
 Hired power 1.8 
 
 Operation of cars, total 60.39 47.8 
 
 Superintendence of transportation . . 1.38 2.4 
 
 Wages of conductors and motormen. 43.76 37.4 
 
 Wages of other ear-service employes 8.14 2.1 
 
 Wages of oar-house employes 5.50 2.2 
 
 Car service supplies 4.44 .9 
 
 Miscellaneous car-service expenses . . 1.24 1.8 
 
 Cleaning and sanding track .93 1.0 
 
 Miscellaneous expenses, total 11.08 19.1 
 
 Salaries of general officers and clerks 1.89 2.5 
 
 Printing and stationery 71 .3 
 
 Miscellaneous office expenses .11 .4 
 
 Storeroom expenses .25 .2 
 
 Miscellaneous general expenses 1.71 2.8 
 
 Damages and legal exp. in connection 5.09 10.1 
 
 O bher legal expenses 04 .7 
 
 Bents of land, buildings, etc 88 .9 
 
 Insurance 40 1.2 
 
 .100.00 100.0 
 
 It is not the intention to enter here into a detaiiled 
 criticism of the operating of the Glasgow tramways. 
 Further, comparative figures of American companies are 
 not available, the companies generally regarding them as 
 private property to which the public are not entitled. To 
 
is 
 
 one or two Items, however, Mef reference might be 
 made. The most conspicuous difference in the two state* 
 ments is perhaps in that of cost of power. The Glasgow 
 reports show that the average cost per kilowatt hour 
 is approximately 0.62 cents. This rate doubtless ap- 
 pears low to the managers of the surface roads of Chi- 
 cago, whose cost of power is from 75 to 100% higher. 
 However, there are not any insurmountable obstacles to 
 producing power at even lower rates in Chicago, where 
 coal is cheap. It is merely a matter of installing modern 
 power houses and operating them economically. In the 
 production of power the cost of labor is comparatively 
 small. The large cost is for coal, and where coal is 
 cheap the power should be cheap. Power should be pro- 
 duced in Chicago at a cost not exceeding 0.50 cents. 
 Conspicuous difference is the percentage of damages and 
 legal expenses in connection therewith. In Glasgow the 
 tramway management avoid any excessive loss through 
 accidents by insurance covering both the employers' lia- 
 bility and third party accident risks. In America it fa 
 usual for the companies to take the risks themselves and 
 pay damages where liability attaches to them in the event 
 of an accident. 
 
 The difference in the percentage of wages of conduc- 
 tors and motormen is largely due to the slower speed of 
 the cars in Glasgow. The rate of wages per hour per 
 man in Glasgow is less than in America, but the Glasgow 
 man does not make as great mileage in any given tune. 
 The percentage Is also ntfected to somo extent by the 
 higher sreneral ratio of the total pxp-snscs in America, 
 to the higher cost of power and of damages, 
 
WAIT FOE CHICAGO. 
 
 EDITORIAL COMMENT. 
 
 [From The Wall Street Journal of June 3, 1905.] 
 
 In order the better to carry out his policy of munici 
 al ownership, Mayor Dunne of Chicago has brought to 
 this country Mr. Dalrymple, superintendent of the muni- 
 cipal street railways of Glasgow, so as to have the benefit 
 of his experience. The thorough analysis of the accounts 
 of the Glasgow tramways by Mr. James Marwick, pub- 
 lished in another column, presents the results of munici- 
 pal ownership in that city in a most comprehensive way. 
 
 There can be no doubt whatever that Glasgow has 
 achieved remarkable results under a system of municipal 
 ownership and operation of street railways. The service 
 to the public has been improved and the rates of fare re- 
 duced, and at the same time the system is operated at a 
 profit to the city. As Mr. Marwick shows, the operation 
 of the railways last year left a considerable dividend, 
 which went to the city funds known a* the "common 
 good," and ftill a surplus remained, which went into a 
 reserve for defraying extraordinary expenses. 
 
 These results, however, are by no means conclusive 
 as to the policy of establishing municipal ownership in 
 this country. We commend to all who are interested in 
 this question Mr. Marwick'g most painstaking and admir- 
 able paper. A careful reading of it, it seems to us, raises 
 teveral doubts which can only be removed by actual ex- 
 perience. 
 
 First, there is the doubt as to the honesty and effi- 
 ciency of municipal operation in view of the well known 
 corruption and costliness of the administration of Amer- 
 ican cities. Until we have purified our municipal govern- 
 
15 
 
 jients and divorced their administration from partisan 
 and "ring" politics, the question is whether it is advisable 
 to change from private ownership of public utilities, how- 
 ever great may be some of the evils connected therewith, 
 to municipal ownership and operation. 
 
 Another doubt suggested by Mr. Marwick*s paper JB 
 whether it would be advisable to adopt here the methods 
 employed in Glasgow which permit of such large earnings 
 on such low rates of fare. The Glasgow system of rates 
 of fare graduated according to the distance travelled re- 
 sults in an enormous congestion of the population and 
 increases the herding of the poor in the tenement house 
 districts. The American system of fares, the same for 
 long as for short distances, with manifold transfers, tends 
 to distribute the population over wide areas. The latter 
 from every point of view is the better. 
 
 Chicago has kindly undertaken the task of testing 
 municipal ownership for the other American cities. Let 
 !N"ew York and the other cities yield to Chicago that dis- 
 tinction, and meanwhile wait with patience the results / 
 her experience. 
 
MARWICK, MITCHELL & Co. 
 
 CHARTERED ACCOUNTANTS, 
 79 WALL STREET, NEW YORK, 
 
 TELEPHONE 4678 BROAD. 
 
 CHICAGO 
 
 189 LASALLE STREET 
 TELEPHONE CENTRAL 3171 
 
 TOLEDO MINNEAPOLIS 
 
 320 GARDNER BUILDING 130 TEMPLE COURT 
 TELEPHONE HOME 4497 TELEPHONE N. W. MAIN 1836 
 
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