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September 26, 1922
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<br /> 1. As a pzeface it is desired th state that the officials of this company have not
<br />regarded this situ~tion from a purely selfish point of view, but in their negotiations with
<br />the City and in the submitting of suggestion they have endeavored to maintain a~broad and
<br />comprehensive view of the situation, looking to the best interests of the City and the
<br />party jointly.
<br /> To this end the company has suggested remedies essential to enable public service
<br />properties to continue to exist and render efficient service at reasonable rates. Not only
<br />is this true, but the suggestions m~de by the company have been recognized and adopted by
<br />muncipalities and regulatory bddies which have ~ealized the propriety and necessity of
<br />ing their citizens efficient public service at reasonable rates. This has been accomplish-
<br />ed by removing from ~he street railway systems indirect taxes on their patrons, such as are
<br />involved in payments for the use of streets and paving obligations, and by removing other
<br />onerous burdens which have been found to militate against the ability of the public utilities
<br />to serve the purpose for which they are created, namely, to efficiently serve the public at
<br />the smallest possible expense.
<br /> 2. However, this company is very anxious to put itself in position to efficiently
<br /> serve the people of Portsmouth and is willing to make'sacrifices to do so, notwithstanding
<br /> the fact that the officials clothe company earnestly and conscientiously feel that it is a
<br /> mistake from the viewpoint of the people and the company to assume obligations not necessari-
<br /> ly involved in street~railway construction and operation. Therefore:
<br /> 3- In answer to paragraphs two and four of your letter, both referring to paving
<br /> obligations, the company will agree that "within twelve mon~hs after the completion of the
<br /> betterments and the inauguration of improved service now under consideration" it will pave
<br /> between and two feet outside of the rails on all st'rests now paved and on which the rerouting
<br /> plan~ contemplates the continuance of operationof street cars "whether such paving be
<br /> quired by existing franchises or notu and that thereafter the City shall not in any event
<br /> require the company to "put in paving costing on au average in excess of $15,OOO per year."
<br /> This meets the requirements of the resolution of the Council and of your ,letter,
<br /> but it is felt that in fairness to the Council it should be stated that this burden will en-
<br /> tail a cost to the company of approximately $60,000 per annum, of which approximately $15,O00
<br /> would be for paving and approximately $~5,000 for track reconstruction made necessary by the
<br /> paving. This is brought to your attention in orde~ that the Council and ~ourself may see
<br /> that the paving obligation which you insist upon and which we reluctantly accept may tend to
<br /> delay the time when the City and the company may realize their mutual desire of reducing the
<br /> fare to five cents.
<br /> ~. As~to~the matter of Jitney regulation referred to in the third paragraph of
<br /> your letter,- it is difficult ~o u~derStand the objection of the~City to submit to impartial
<br /> arbitration-the question of whether or not competition mctually ~xists, which seems to be
<br /> the only point of difference between theCity and the company. The company will, however,
<br /> accept the Oouncil's proposition not to permit any other system of urban transportation to
<br /> operate nearer than two blocks f~om the portion of any street on which the company operates
<br /> (subject to the exceptions contained in the resolution of July l~, 1922) provided; the Cou$-
<br /> oil will agree to reroute the $it~ey lin~s~ thereafter when and as they find that the same
<br /> substantially compete with the system of this company, so that the company may hope and ex-
<br /> pect that the Council will oa~ry out the spirit ~s well as the letter of its resolution which
<br /> states that urban transportation should be rendered by a regulated monopoly. This we under-
<br /> stand mee~s the views of the Council in this respect.
<br /> 5- With respect to the matter of regulation of rates, which is referred to in
<br /> the fifth paragraph of your letter,- in view of the decision of the-Oourt of Appeals in the
<br /> Victoria oase~ decided September El, 19~2, no vali~ contract respecting its rates of fare
<br /> cam be made between the compmny aud the City. The company will,, however, agree to start
<br /> out with a 6-cent fare and school tickets as at present, and will not ask for authority tb
<br /> increase that rate during the twelve months immediately succeeding the oompleti6~of the re-
<br /> routing and installation of imTroved service. At the end of sai~ twelve months period the
<br /> company will. confer with the Council respecting fazes, and if the Council and the company
<br /> are satisfied that economic conditions will warrant a five-cent fare and will secure to the
<br /> company a reasonable return on its investment, the company will seek the authority of the
<br /> State Corporation Commission to inaugurate said rate.
<br /> The company will agree that when either the City or the company feels that the
<br /> rates should be either increased or decreased the company will go into conference with the
<br />· City authorities and earnestly endeavor to reach an agreement as to what is a just rate of
<br /> fare at any time, and if an agreement is remched the company will apply to the State Corpora-
<br /> tion Commission for authority ~o inaugurate the r~e agreed upon. If no agreement is reached,
<br /> either party may apply to the Sta~e Corporation Commission.
<br /> 6. With respect to the right of the City to permit competition with the company
<br /> in the event the fare is increased~above seven centS, which s~bjeot is referred to in the~
<br /> and unsound. But in carrying out ~he spirit om our eIIor~s~o mee~ ~ne situation ~ ~
<br /> above, the company will agree that the City may, in the event the fare is increased beyond
<br /> seven cents, introduce oor~oetitive service. In doing this we~must rely upon the hope that
<br /> if the Council is satisfied that economic conditions do not justify a rate in e~oess of seven
<br /> cents, the Co~ncil and ~ture Counc~Tls, in the exercise of this reserved right, will take into
<br /> consideration the fact thmt the c~pany cannot sucdeed in an application for aa increased
<br /> rate unless the economic conditions warrant m't.
<br /> 7- With reference t~ maximum tim~ intervals between ~ars and trackless trolleys,
<br /> which'is referred to in the s%venth paragraph of ye.ur letter, we bee to stoats that it ~as
<br /> the intent of our letter, of ~ugcst 8th that the maxmmum time intervals indicated theremn
<br /> not be increased without the consent of the City Oouncml, but that the State Corporation Com-
<br /> mission should have full a~thority~to decrease the time intervals upon the application of
<br /> any interested party.
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