Massachusetts. Board of Railroad Commissioners Massachusetts. Public Service Commission.

Annual report of the Public Service Commission, and the ... annual ..., Part 1 online

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ing all short lines in the thickly settled district, extending as far
as the town boundary on the line to Springfield, as far as St.
Mary's Cemetery on the line to Holyoke, and approximately
three miles out on the line to Huntington. In laying out a sys-
tem of this sort, it is often desirable, instead of measuring off
the miles with mathematical accuracy, to make certain adjust^
ments, so that the limits will fall at convenient points, making
the zones slightly more than one mile in length in some cases
and slightly less in others. In preparing its tariff, such adjust-
ments may be made by the company, subject to the approval
of the Commission. Provision should also be made in the tariff
so that, in journeys between points in the Springfield division or
the Westfield 6-cent zone and points in mileage territory, the
minimum fare shall not apply in the latter. In riding from a
point in the center of Westfield, for example, to a point in the
first mileage zone on the Huntington line, .the fare should be 6
cents plus 2 cents, or a total of 8 cents, rather than 6 cents plus
the minimum mileage fare of 6 cents, or 12 cents in all.

Springfidd Division,

In the Springfield division, comprising the city of Springfield
and the adjoining territory within the present single fare limits,
the company proposes an inner zone and an outer zone, in each
of which a 5-cent fare would be charged. This proposal aroused
intense antagonism from the city of Chicopee and the towns sur-
rounding Springfield, and it was strongly urged at the hearings
that a straight 6-cent fare within the present limits, or even a
higher fare, would be vastly preferable to the plan proposed by
the company. Before taking this matter up in any detail, there^
fore, it will be weU to consider whether or not any plan of this
general character, embodying the introduction of some new zone
or zones, is desirable.

The present 5-cent fare territory is undoubtedly very large.
There b no city in New England, except Boston, which compares



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1919.] SPRINGFIELD RATE CASE. 247

with Springfield in this respect. Longer rides can be obtained
for a nickd, indeed, than in many cities throughout the country
with much larger populations. Conditions have, in many re-
spects, been very favorable for such development. In the case
of the lines running to Chicopee, fo^ example, large centers of
population exist at both ^nds, and in between there is opportu-
nity for comparatively high speed operation. In the rush hours,
traffic moves in almost equal volume in both directions. Similar
conditions exist on the lines to Holyoke, Westfield and Indian
Orchard. The chief factor, however, which makes long rides
possible is the short-haul traffic. While the company's estimate
that the average passenger rides, including transfers, but 2.88
miles, was based on observations covering the operations of but
one day on each line, allowance may be made for a large margin
of error without affecting the conclusion that the short-haul rider
really pays for the long hauls, and that without him the broad
expansion of the 5-cent fare i^rea would have been impossible.

Objection to the introduction of any form of "zone system"
and to the limitation of the present uniform fare plan of opera-
tion in the Springfield division seems to be based, very largely,
upon the feeling that, if the company needs additional revenue,
the burden ought not to be thrown entirely upon the outlying
territory, and that the central (fistrict of Springfield ought to
carry its share of the load. While this feeling is not unnatural,
it arises from a misconception of the situation. A "zone system"
would retain the 5-cent fare for the shorter rides, not only in the
central district, but in the outlying territory as well. People living
in Chicopee or Indian Orchard, for example, could reach their local
mills and stores without paying an increased fare. On the other
hand, those who live in the inner zone and work in the outlying
territwy would pay an additional charge in exactly the same
way as those who live outside and work or do business in the
central district; and the evidence indicates that on some lines,
at least, there is about as much movement of this character in
one directibti as in the other. In other words, the burden under
the "zone system" would be thrown upon the long rider, as dis-
tinguished from the short rider, rather than upon the people
living in any particular territory, as distinguished from those
who reside in another. If the inner zone derived any relative
advantage from the introduction of such a system, it would be
due to the fact that there happens to be a larger proportion of
short-haul riding in that territory.



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248 APPENDIX — ORDERS. [Jan.

It was also ^irged that the suburban territory has been built
up under the uniform fare system^ with the understanding that
this system was established and not likely to be disturbed; and
that, under the circumstances a departure from this system would
be unjust and prejudicial tP those who live in this territory, and
especially to the owners of real estate. The fear that a ''zone
system'' would have any substantial influence upon land values
in these districts is not, we believe, well founded. But even if
it should have such an e£Fect, it is no doubt a fact that the ex-
tension of street railway lines into this territory materially in-
creased these values in the past, and that land owners have en-
joyed and profited by this "unearned increment." If they
should be deprived of some slight measure of this increment by
an attempt to apportion the mounting cost of street railway
service more nearly in accordance with the service furnished,
they would have no reasonable ground of complaint. There has,
in this instance, been no contract that tares would continue for
any period of time upon the uniform basis, such as has existed
in the Boston district.

The substitution of a 6-cent fare for the present 5-cent fare
in the Springfield division would undoubtedly be the easiest and
simplest method of dealing with the situation, and it is quite
possible that it might meet with less open and immediate criti-
cism than any other. It is also true that there are difficulties
in the application of a zone system, and that no practicable sys-
tem of fares can be devised which will be entirely free from incon-
sistencies or minor discriminations. The rates and charges of
every public utility, whether privately or publidy operated, are
open to such criticism to a greater or less extent; and this cannot
wholly be avoided.- The duty of a supervising commission is to
adjust rates, so far as it can, in the way which will produce the
best net results for the community, considering not only the
present but, to a reasonable degree, the future. The easiest way
is not always the best, and experience has shown pretty cleariy
that there are serious objections to a straight increase in fare
in urban territory, such as is included within the Springfield
division.

Short-haul traffic is the most profitable that a street railwi^
company can have, and it is also the traffic that is most difficult
to secure and retain, and the most sensitive to poor service or
unfavorable rates, fit is a simple matter for most short riders
in cities to walk, rather than use the cars, and jitneys can carry



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1919.] SPRINGFIELD RATE CASE. 249

them with profit at a 5-cent fare, if the street railway is not
in a position to do so. However willing the general public may
be to concede that a street railway company is entitled to addi-
tional revenue, and however trifling an increase in fare from 5
cents to 6 cents may appear in comparison with the advance in
prices of most commodities in common use since the war began,
experience has seemed to demonstrate, and street railway man-
agers are very generally of the opinion, that such an increase
discourages short-haul riding, encourages competition and appre-
ciably diminishes the kind of traffic which it is particularly desir-
able to attract.

The importance to the public, as well as to the company, of
doing everything that can be done to hold and increase this
short-haul business is obvious. Looking into the future, such
business may be the determining factor which will make pos-
sible a general reduction of fares or, if conditions become still
more unfavorable, prevent a farther increase. The best means
of developing it is, clearly, to retain a low minimum fare. If a
straight raise to 6 cents were made, and results did not prove
satisfactory, the next step would be a 7-cent fare, which would
have an even more unfavorable e£Fect upon short-haul traffic.
On the other hand, a 5-cent fare is convenient and popular, en-
courages riding and is an excellent weapon with which to meet
jitney competition.

If there was anything inherently unjust in retaining a 5-cent
minimum, the considerations thus mentioned would have less
weight. Equity, however, seems chiefly on its side. The short
rider has been discriminated against, up to the present time.
Five cents is^ ample, in urban territory, to cover the cost of this
service, and if a readjustment should be made which would retain
that fare for the shorter distances and require the long-haul rider
to pay a charge more nearly proportional to the cost of carrying
him, certainly no injustice would be done. Under the circum-
stances the Commission is of the present opinion that some form
of "zone system" will, on the whole, produce better results for
the community than the adoption of a uniform 6-cent fare. We
realize the practical difficulties in the application and operation
of such a system, and that experience as yet is so limited that
no one can positively affirm that expectations will be realized.
The theoretical advantages, however, are sufficiently important
so that we feel that the experiment should be tried, upon the
clear understanding, however, that it is an experiment, subject



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250 APPENDIX — ORDERS. [Jan.

to future change if^ at the end of a reasonable period of time,
results are not what they should be.

Approval of the introduction of a "zone system," however, is
not the same thing as approval of the particular "zone system"
which the company has proposed. The plan contained in the
schedule filed is objectionable in vital respects.

In the first place, if the estimate of the company is correct,
this plan would produce substantially more revenue than the
amount which has been shown above to be reasonably required.
The estimate is $477,762, and this was based on the tra^c in
the year ended June 30, 1916. Using the traffic in the calendar
year 1917, the amount is increased to nearly $520,000, — to be
secured from this one division. The Commission's estimate of
additional revenue required is $400,000 for the entire system.
Assuming that $60,000 can be obtained from the outlying divi-
sions, this makes the amount assessable against the Springfield
division about $340,000, a considerably smaller sum than that
contemplated by the company.

In the second place, the zone plan proposed is not well-con-
sidered. The fare jumps abruptly from 5 cents to 10 cents,
without any intermediate gradations, creating the same unde-
sirable conditions which have led to the development of the over^
lapping zones in the Palmer and Westfield sections. So far as
we are aware, this is the first time that an attempt has been
made in this country to split an urban single-fare territory in
this somewhat violent fashion. The advisability of progressing
by comparatively small steps from the minimum to the maxi-
mum fare has very generally been recognized.

It is not difficult to eliminate the company's plan from con-
sideration, but it is more difficult to determine upon a proper
substitute. The first necessary step is to fix upon the limits of
the inner zone. The central district, in our judgment, ought to
carry somewhat more than its share of the load. While certain
of the surrounding municipalities have clearly defined industrial
interests of their own, and are not mere suburban residential
towns, Springfield is the general business center and its traffic
is fed from the adjoining communities. Possibly a mathematical
formula might be derived for fixing the limits so as to secure the
results desired, but the Commission has been unable to hit upon
such a formula and must depend upon general judgment. In our
opinion, the limits proposed by the company are not far out of
the way. They vary on the through lines from 2.3 miles ffom



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1919.] SPRINGFIELD RATE CASE. 251

Court square to 3.6 miles, and average about 3.2 miles. Greater
uniformity would be desirable, but the variations are not so
great as the variations in the length of riding now possible on
the different lines for the uniform 5-cent fare and, upon analysis,
it appears that they have not been established arbitrarily but in
the exercise of reasonable discrimination.

The limit nearest to Court square, for example, is on the
Brightwood line to Chicopee and is fixed at a distance of about
2.3 miles. This point was chosen, however, because it is on the
boundary line between the two cities. If it was placed farther
out, Chicopee would not have the advantage of a 5-cent fare
within its own limits; and it also appears that the territory
f^r some considerable distance beyond the boundary is sparsely
settled, so that there would be small advantage in any event.
Similar conditions governed the fixing of the limits on the Glen-
wood and Liberty street lines to Chicopee and Chicopee Falls.
The limit at the greatest distance is on the St. James avenue
line, being placed about 3.6 miles from Court square. In this
case it was extended to the large Westinghouse plant, since it
was thought desirable that the workingmen should be able to
reach this plant from either direction for a single fare, a conclu-
sion in which we concur. On the whole, the Commission is not
disposed, for the present, to disturb the limits as fixed by the
company. Actual experience may develop valid reasons for
making some adjustments in certain instances, and the matter
will be regarded as open for future consideration, without preju-
dice, after such experience has been secured.

In the case of the outer zone there are two different methods
by which a gradation of fares can be established between the
minimum and the maximum. Provision can be made for suc-
cessive concentric sections, in each of which a small additional
cash fare of one or two cents would be charged, or the cash fare
can be allowed to remain on the basis proposed by the company
and provision can be made for intermediate steps through the
sale of tickets. The latter arrangement is substantially the plan
adopted by the Commission in the Holyoke Rate Case, decided
December 31, 1917. In Holyoke, a passenger traveling between
a point in the inner zone and a point in the outer zone is charged
10 cents if he pays cash, but he can obtain a rate of 6| cents
by purchasing 6 tickets for 40 cents. This plan has the advan-
tage that it simplifies fare collections by eliminating the handling
of pennies, and any person who rides with any frequency can



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252 APPENDIX — ORDERS. [Jan.

easily obtain advantage of the reduced rate. Those who ride
very infrequently may prefer to pay the full cash fare rather
than to invest in tickets, but it is not unfair that riders of this
class should be charged a higher rate, and by so doing the ticket
rate can be kept on a lower basis than would otherwise be possible.

Pldn RecoTnvtended.
In the judgment of the Commission the "zone system" should
be introduced upon the following initial basis, subject to possible
later change in the light of the knowledge gained from actual
experience: —

(1) Establish an inner zone, with the limits proposed in the schedule
filed by the company.

(2) Provide for a uniform cash fare of 5 cents in the inner zone, with
free transfer privileges, and fqr a similar cash fare of 5 cents in the outer
zone.

(3) Provide for the sale of 6 tickets for 40 cents, or at the rate of 6|
cents each, good between any point in the inner zone and any point in the
outer zone which is not more than 5 miles distant by rail from Court
square. This will take in most of Chicopee and Chicopee Falls, Ea£t
Longmeadow, much of Longmeadow and Agawam, and the major portion
of West Springfield which is not within the inner zone. The limit for these
tickets on each line need not be fixed at precisely the 5-mile mark, but may
be placed, with the approval of the Commission, at any natural point of
division which approximates that distance. Adjustment should be made
on the lines to Chicopee Falls, which reach the same destination by routes
of varying length, so that the fares to the common point shall in all cases
be on the 6j-cent basis.

(4) Provide for the sale of 6 tickets for 50 cents, or at the rate of 8} cents
each, good between any point in the inner zone and any point in the outer
zone which is beyond the approximate 5-mile limit in which the 6i-cent
tickets can be used.

The plan so outlined is, we realize, not mathematically precise
nor free from inconsistencies. It may be said to favor riders
passing to and from the remote ends of the long lines to Feeding
Hills, to the Connecticut state line on the west side of the river,
and to Indian Orchard and Ludlow. A plan in theory more
logical and consistent would be to limit the use of the 8i-cent
tickets to points not more than about 6i miles from Court
square. The traflSc which would be affected, however, is incon-
siderable, except on the line to Indian Orchard and Ludlow, and
it does not seem to the Commission desirable, either from the



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1919] SPRINGFIELD RATE CASE. 253

public point of view or in the financial interest of the company,
that the fares paid in traveling between points in the central
district and these communities should be raised 100 per cent.
In changing from the established system of charging to a radi-
cally different plan, some adjustments are necessary, even if they
involve inconsistencies, to avoid too harsh a break between the
old and the new.

Viewing the situation as a whole, the plan recommended will,
in our judgment, produce the best results for the community and
is just and reasonable. Whatever inconsistencies it may involve
are not of major importance and are far less pronounced than
those which have existed for years under the present system.
Doubtless experience will show that improvements are possible
and desirable, but these may be made later as the need develops.

What amount of additional revenue this change in fares will
yield no one can forecast with accuracy. It is dependent upon
the effect on traffic, the extent to which tickets are used in lieu
of cash, and the extent to which each of the two classes of
tickets are used. No traffic counts are available which make
possible an estimate such as was submitted by the company in
the case of its own proposed method of readjusted fares. Reason-
ing by analogy from the company's estimate, however, it seems
probable to the Commission that the zone system recommended
will yield upwards of $300,000 additional revenue and that, add-
ing the amount obtained from the outlying divisions, the total
will approximate the $400,000 reasonably required. If this should
not prove to be the case after a fair trial, the matter can, of
course, he brought up for renewed consideration. The history
of the company and the effect of the share for share consolida-
tions with outlying lines make it just and reasonable that any
increase in fares in the central district should be conservative.

An. order is entered below cancelling the rates and charges
stated in the schedule filed with the Commission and now under
suspension. The company will be permitted, however, to ffie a
new schedule embodying the modified changes in fares above
outlined, and an order will be issued permitting this schedule to
become effective on short notice. Before issuing such an order,
however, the Commission must be satisfied that the schedule con-
forms to its recommendations and reserves the right to require
any minor changes, consistent with the essential features of the
plan, which may seem desirable in the application of the plan to
the territory affected.



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254 APPENDIX — ORDERS. . [Jan.



ORDER.

Notice of the Springfield Street Railway Company of proposed
increase in rates of fare upon its railway.

It appearing that on August 10, 1917, an order was entered
suspending, until November 1, 1917, the rates and charges stated
in the schedule described in said order; and that by subsequent
orders said rates and charges were further suspended until April
1, 1918; and it further appearing that a full investigation of the
matters and things involved has been had, and that the Com*
mission on the date hereof has made and filed a report containing
its findings of fact and conclusions thereon, which said report is
herein referred to and made a part hereof, — ^

It is

Ordered, That the Springfield Street Railway Company be and
is hereby notified and required to cancel the rates and charges
and changes of fare limits and transfer privileges stated in the
schedule specified in said orders of suspension.

It is

Further ordered, That a copy of this order be filed with said
schedule at the office of the Commission and a copy hereof be
forthwith served upon the Springfield Street Railway Company.

By the Commission,

ANDREW A. HIGHLANDS,
March 30, 1918. [P. S. C. 18601 Secretary.



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1919.] HOTEL TELEPHONE RATES. 255



HOTEL TELEPHONE RATES.



In the matter cf an investigation by the Commission upon Us own
motion concerning telephone service at hotels and the rates
charged therefor. •

George R. Grant 1 for the New England Telephone

Clarence G. McDavitt J and Telegraph Company.
John A. Sullivan for the Boston Hotel Men's Association.

This investigation was instituted by the Commission upon its
own motion as the result of information and complaints to. the
effect that at certain hotels in Boston the rates or tolls for local
messages had been increased from 5 cents to 10 cents each. A
public hearing was held on December 20, 1917.

It appears that prior to the date, July 1, 1915, when the New
England Telephone and Telegraph Company filed its rate sched-
ule with this Commission, under the provisions of chapter 784 of
the Acts of 1913, telephone service was furnished to hotels under
special so-called "hotel contracts." No provision for such con-
tracts was made in the schedule which was filed, no new contracts
of similar character have since been entered into, most of those
which then existed have been discontinued, and it is the intention
of the company to discontinue them all. Their temporary reten-
tion has been permissible under a provision of section 20 of the
aforesaid act.

The telephone service of the hotels may be separated into two
parts, viz. : —

(1) The service furnished to the ofl&ces and rooms, which may be
called the "room service."

(2) The service furnished to booths located in the lobbies or corridors,
which may be called the "corridor service."

Under the rate schedule filed with the Commission, the "room
service" is furnished under the standard form of contract for
private branch exchange service. The hotel pays a stated sum
per year for switchboard and equipment, for each trunk line and
for each telephone instrument used, and an additional amount



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256 APPENDIX — ORDERS. [Jan.

based upon the number of messages. The actual rates for number
one system, Metropolitan exchange service, are as follows: —

Equipment. Annual Ratflv.

Switchboard, $24 OO

Trunk lines (both ways), each, 24 OO

Stations, each, 6 OO

Operators' or answering sets, each, 6 OO

Messages.

Minimum, 4,000, 120 00

Additional messages, in excess of minimum, used within the con-
tract year, 3 cents each.

The telephone company furnishes all the apparatus and wiring,
while the hotel supplies whatever operators may be necessary.

Until recently the "corridor service" has been furnished directly
by .the telephone company upon the public pay station basis.
Space has been leased from the hotel and the station has either
been operated upon the coin box plan or through an operator
supplied by the telephone company. Under this arrangement no



Online LibraryMassachusetts. Board of Railroad Commissioners Massachusetts. Public Service CommissionAnnual report of the Public Service Commission, and the ... annual ..., Part 1 → online text (page 34 of 64)