Grenville S. MacFarland to Woodrow Wilson
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Hon. Woodrow Wilson,
President of the United States,
Washington, DC
My dear President Wilson
Just a line on the subject of public utilities, especially the traction companies, which we have recently discussed. The Buffalo situation is acute. I am in touch with it and believe confidently that there is nothing there which ought to make me change my view of the general situation,- a view which you were good enough to tell me you approved. Some of the representatives of the financial interests in these traction companies have discussed the situation with me recently, and I have told them that I could not see any justification for any Federal interference which would imply an assumption by the National Government of any of the financial obligations, or would tend to postpone or make more difficult the assumption by the cities of the operation of their street railways.
There seems to me to be only one method by which the Federal Government could prudently interfere: You might appoint a Commission with definite instructions to place themselves at the service of any local authority which wanted advice and assistance for the purpose of putting into effect the plan first adopted in Boston and applied recently to local conditions by the City Council in Chicago. This plan is, in effect, a method by which the companies surrender the possession of their property to the city for operation by the city, the city making certain financial undertakings concerning the debts of the company, including dividends, where the stock represents honest and prudent investment. By this plan the cities can take over the property and get all the benefits of public ownership and operation without assuming the great burden of purchase,- a thing quite impossible under present war conditions with the National Government demanding the exclusive use of the borrowing power of the country. The agitation for public ownership has always been because, in this country, private management and operation were always an incident of private ownership; but the evils which the advocates of public ownership sought to eradicate flowed from the operation of the public utilities rather than from their ownership.
If we can get, as a result of the war, permanent public operation of the street railways and railroads, we shall almost have completed the circle of political benefits which can be expected from the war,- and thus this war will be in sharp contrast with the Civil War.
I think that a statement from you accompanying the appointment of such a Commission would inspire the communities where the street railways are in difficulties to assume their burdens in this way. The people are not unwilling to pay increased rates if they are sure that all the benefits of the increased rates are coming to the public. Under private management they are not sure of this. In Boston the Public Trustees raised the fare 40% as soon as the public took possession, and there was not the slightest opposition. The old private management freely admit that there would have been almost a civil war if they had undertaken any such raise.
To recapitulate: If you should appoint a Commission with power only to aid in the promotion of this public-operation plan when requested so to do or in the rare cases when the National Government's war interests are directly in jeopardy, I imagine that the situation will then take care of itself.
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In searching for a man to fill Mr. Anderson's place on the Interstate Commerce Commission I think you will find that the intelligent and disinterested opinion of New England almost unanimously favors Mr. Joseph B. Eastman of our Massachusetts Public Service Commission.
G. S. MacFarland
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