Thompson Plan 
 
 FOR 
 
 People’s Ownership 
 and Operation 
 
 OF 
 
 Street Railway Systems 
 
 at a 
 
 Ct Fare 
 
 • • 
 
 SUBMITTED TO THE 
 
 CHICAGO CITY COUNCIL 
 
 IN SPECIAL SESSION 
 SEPTEMBER 9, 1919 
 
 GF ILira 
 
 J:EJB 3 1 
 
 By 
 
 MAYOR WM. HALE THOMPSON 
 
f 
 
38 8 
 
 C43\\t 
 
 WM. HALE THOMPSON 
 
 MAYOR 
 
 CITY OPCHI€ASO 
 ©FFijQE QF THE MAYOR 
 
 August 23, 1919 
 
 Eon. James T. Igoe, 
 
 City Clerk, 
 
 Dear Sir: 
 
 By virtue of the authority conferred upon me, 
 
 I, William Hale Thompson, Mayor of the City of Chicago, 
 do hereby call a special meeting of the City Council 
 of the City of Chicago, to be held on Tuesday,.September 
 9, 1919, at 2:30 P. M., and request that notice of such 
 meeting be sent to the members at least ten days in advance 
 thereof. 
 
 The purpose of the proposed special meeting is to 
 receive, consider and act upon-a message from me, as Mayor, 
 concerning the local traction situation, and a proposed 
 solution of the traction problems confronting us contained 
 therein. 
 
MAYOR’S OFFICE 
 
 Chicago, September 9, 1919. 
 
 To the Honorable, the City Council of the City of Chicago. 
 
 Gentlemen: Pursuant to the call issued by me, August 
 23, 1919, for this special meeting, and in accordance with 
 the purpose announced therein, I submit for your con¬ 
 sideration this message. 
 
 In numerous previous messages I have discussed the 
 local transportation situation and from time to time have 
 made various suggestions with a view to aiding improve¬ 
 ment in service for the benefit of the people of Chicago 
 whose business and pleasure is dependent upon the effi¬ 
 ciency of our traction lines. 
 
 From my experience with this matter and from my 
 observation of the workings of traction interests I am of 
 the opinion that the people of Chicago will never have 
 satisfactory traction service while the principal end aimed 
 at in that service is private gain. So long as high finance, 
 returns on watered stock and excessive profiteering are 
 the impulses which sway traction management, just so 
 long will the car-riding public continue the victims until 
 conditions finally become unendurable. 
 
 Traction Employes’ Wage Controversy 
 
 In the early part of July of this year, employes of 
 the Surface and Elevated Lines demanded increases in 
 wages and different working conditions, threatening a 
 strike unless such demands were granted. On July 14th 
 the City Council* adopted a resolution providing for the 
 appointment of a committee consisting of four Aldermen, 
 a representative of the Surface Lines, a representative of 
 the Elevated Lines, a representative of each of the unions 
 to which the Surface and Elevated Lines’ employes be¬ 
 longed and the Mayor. On this committee I appointed 
 Alderman Thomas F. Byrne, Sheldon W. Govier, Scott M. 
 Hogan and Edward R. Armitage, President Leonard A. 
 Busby of the Surface Lines, President Britton I. Budd of 
 the Elevated Lines, President William Quinlan of the Sur- 
 
 
4 
 
 face Lines Employes’ Union and President William Mylan 
 of the Elevated Lines Employes’ Union. On July 21st I 
 called a meeting of this committee to discuss the possi¬ 
 bility of averting the threatened strike. The meeting was 
 held with all representatives present and what took place 
 appears in detail in my report submitted to the Council 
 on July 31st, pages 1064 to 1070 of your printed proceed¬ 
 ings. 
 
 < . ■ 1 • ' 
 
 Utilities Commission Negotiates for Settlement , 
 
 Previous to this meeting, however, the representatives 
 of the Surface and Elevated Lines and of the Unions had 
 taken up the settlement of the pending controversy with 
 the State Public Utilities Commission. No representatives 
 of the City government, or of the people, or of the public 
 press were admitted to the conferences which took place 
 between the members of the State Public Utilities Com¬ 
 mission and the representatives of the Surface and Ele¬ 
 vated Lines and the Unions, nor were any notified or in¬ 
 vited, consequently no authentic information is available 
 as to what took place. Your committee, however, tendered 
 its good offices to avert a strike and offered to meet at any 
 hour its services were needed, but no member asked for 
 another meeting, and the State Public Utilities Commis- 
 / sion was understood to be in control of negotiations. 
 
 The Public Utilities Commission claimed authority to 
 intervene by virtue of a sentence in Section 8 of the Pub¬ 
 lic Utilities Act, reading as follows: 
 
 “The Commission shall at such times as the Gover¬ 
 nor shall direct, examine any particular subject con¬ 
 nected with the condition and management of public 
 utilities and report to him in writing its opinion 
 thereon with its reasons therefor.” 
 
 I am informed that the conferences referred to were 
 held at the direction of the Governor. 
 
 i • 
 
 Utilities Commission Increases Fares 
 
 The threatened strike took place and lasted from July 
 29th until August 2nd, when all employes returned to work 
 under a reported agreement arrived at with the co-opera- 
 
5 
 
 tion and approval of the Public Utilities Commission. In 
 the middle of the forenoon of Saturday, August 2nd, the 
 Surface Lines notified the City that at 10 a. m. on Monday, 
 August 4th, they would apply to the Public Utilities Com¬ 
 mission for a temporary order allowing them to charge 
 increased rates of fare pending a hearing to be held later 
 on. The Public Utilities Commission on Monday, August 
 4th, over the objections and protests of the City proceeded 
 to consider the application of the Surface Lines for a tem¬ 
 porary increase in rates of carfare, and on Wednesday, 
 August 6th, entered an order allowing the companies to 
 charge seven-cent carfares instead of five cents, as pre¬ 
 scribed by the 1907 contract ordinances. 
 
 Companies Profit—People Ignored 
 
 In my opinion this speedy proceeding offered no op¬ 
 portunity for a hearing sufficient to warrant the Commis¬ 
 sion in entering an order which for the time being, at 
 least, enables the Traction interests to take from the pock¬ 
 ets of the people of Chicago from $30,000 to $38,000 a day 
 and place it in their treasury, with only a very remote 
 chance of its ever being refunded in case the rates they 
 are now charging are ultimately found to be unreasonable 
 and unjust. This is a new style of government, one step 
 removed from the people, by means of which financial 
 burdens are first levied, collected and spent and the peo¬ 
 ple’s claims for justice adjudicated afterward. This kind 
 of a deal would never take place under a Commission con¬ 
 trolled by the people and elected by a constituency com¬ 
 prised of the people directly interested. 
 
 Outcome of Proceedings Planned 
 
 The members of the State Public Utilities Commission 
 and the representatives of the Surface Lines denied, dur¬ 
 ing the brief proceeding, that there was any previous 
 agreement that carfares would be increased if wages were 
 raised, nevertheless Mr. Busby, the President of the Sur¬ 
 face Lines, testified that he had plainly informed the mem¬ 
 bers of the Commission that if wages were increased, rates 
 
6 
 
 of fare must be increased also, and the Commission in 
 turn promised the Surface Lines a “speedy” hearing on 
 their “emergency” application for an increase in carfares 
 if they would consent to an increase in wages. It seems 
 obvious, therefore, that while there may have existed no 
 agreement, in fact, there must have been an understand¬ 
 ing in substance, borne out by the evident preparedness 
 and speed with whioh the Commission concluded that car¬ 
 fares should be increased. 
 
 Proceedings Arbitrary—Mayor’s Comment Thereon 
 
 I doubt whether the State Public Utilities Commission 
 is authorized by law to do what it has done under the cir¬ 
 cumstances or in the manner in which it has done it. Its 
 proceedings appeared to me to be autocratic and dictator¬ 
 ial toward the public interest from beginning to end, but 
 if it is upheld by law then the Public Utility law itself is 
 vicious and tyrannical and should be repealed. After the 
 order of the Commission had been entered and put in force 
 I issued a public statement bearing upon same which was 
 published in the newspapers of Sunday, August 10th, and 
 my reason for repeating it here is that it bears directly 
 upon the purpose of this meeting and what I am about to 
 present. The said statement was as follows: 
 
 Decision Unfair—No Justice from Traction Owners 
 
 “The decision'of the State Public Utilities Commis¬ 
 sion of Illinois, as it appears to me, is neither fair nor 
 just to the people of Chicago. The imposition of in¬ 
 creased street car fares upon the people without a 
 full and complete hearing of the people’s side of the 
 case, and without a physical valuation of the com¬ 
 panies’ properties upon which to compute its earn¬ 
 ings and base rates of fare to the public, is unfair 
 and unjust. 
 
 “The decision serves as a standing reminder to the 
 people of Chicago that they never have and never will 
 receive justice or equity or the benefits of square¬ 
 dealing from the crew of conscienceless plunderers 
 now owning and operating our local transportation 
 lines. A square deal for the people is farthest from 
 any thoughts controlling their profiteering designs. 
 
7 
 
 Their action in securing a raise of fares in the manner 
 in which it has been done should wipe out any vestige 
 that might remain of public confidence in the present 
 traction management. They obtained the valuable 
 franchises which they hold in the streets of Chicago 
 from the people under a contract to maintain a five- 
 cent fare with universal transfers during the life of 
 these franchises, which still have eight years to run. 
 In the hearing just completed they have wilfully ig¬ 
 nored the rights of the people who are the owners of 
 the streets—the most valuable asset to the companies’ 
 business. This fullv convinces me, and I believe con- 
 vinces the people of Chicago, that the present trac¬ 
 tion management is entitled to no future considera¬ 
 tion, because it recognizes responsibility only to the 
 companies and none to the people. 
 
 People Voted for Five-cent Fares 
 
 “In my second inaugural message submitted to the 
 City Council on April 28th of this year, I called atten¬ 
 tion to the fact that the people by their votes in the 
 mayoralty election favored the maintenance of the 
 five-cent fare with universal transfers upon our local 
 transportation lines, and insisted that the terms of the 
 1907 contract-ordinances be complied with until a new 
 traction policy is approved through a referendum 
 vote. Yet, in the face of this mandate, a long contem¬ 
 plated and adroitly executed plan of the traction 
 bosses is consummated to thwart the will of the 
 people. 
 
 “The increase in car fares awarded the companies 
 is a vicious public hold-up by the brazen and un¬ 
 scrupulous crowd representing the ownership and 
 operation of our street railway systems, who have 
 apparently perfected all the preliminary arrange¬ 
 ments for an interminable scheme of wholesale and 
 retail plunder. 
 
 “What do the people of Chicago think when they 
 pay their added fares and realize that they are con¬ 
 tributing to dividends on over seventy-five millions 
 of dollars in watered stock, and to the upkeep of trac¬ 
 tion officials, drawing salaries of from forty thousand 
 dollars to sixty thousand dollars a year, and who hold 
 utter disregard for the public welfare? 
 
8 
 
 Fight Will Go On—Hope in New Policy 
 
 “The fight for the five-cent fare will go on by 
 and with the aid of the people. The fight for bet¬ 
 ter service will go on. The fight for honest traction 
 management will go on. The City government will 
 contest, with every resource at its command, the in¬ 
 fliction of this added oppression upon an already over¬ 
 burdened constituency. We will fight the traction 
 magnates now clutching at the public throat until 
 their greed is conquered and their plans of extortion 
 defeated, and until government irresponsive to the 
 people becomes answerable and obedient to the people. 
 
 “There is hope for the future. The ultimate result 
 of the present decision will be that the arrogant and 
 autocratic traction policy with which Chicago is af¬ 
 flicted must give way to a management in the hands 
 of men responsible to the people, who can be directed 
 by the people and who will be concerned in the peo¬ 
 ple’s interest. 
 
 “I shall in the near future present a plan whereby 
 such a situation can be brought about and whereby 
 either the ownership or operation of our traction lines, 
 or both, may be in accord with the reasonable desires 
 of the public, and give Chicago a transportation sys¬ 
 tem which will be a model for the world.” 
 
 Traction History 
 
 Before proceeding to discussion of the plan suggested, a 
 summary of traction affairs as related to the City of Chi¬ 
 cago may be of interest to some of the members of the 
 Council in considering an adjustment or determination of 
 the question. 
 
 Prior to April 2, 1906, the Surface Lines claimed 99-year 
 rights in the streets of Chicago, which practically put them 
 above and beyond control of the City government; but the 
 Supreme Court of the United States decided that such 
 claims were without foundation except in some minor and 
 unimportant particulars. Following this decision the Sur¬ 
 face Lines were compelled to enter into negotiations with 
 the City to procure the right to continue to operate. These 
 negotiations resulted in the so-called settlement ordi¬ 
 nances passed by the City Council February 4,1907, vetoed 
 by the Mayor and passed over his veto February 11, 1907, 
 
9 
 
 and approved by the people on a referendum vote April 
 2, 1907. These ordinances were accepted by the companies 
 and grant them the right to operate their system of street 
 railways in the streets of Chicago for twenty years, or 
 until February 1, 1927. These ordinances, no matter how 
 vicious or one-sided they may be, are unquestionably 
 solemn contracts between the people of the City of Chi¬ 
 cago and the Surface Lines, and are comprehensive in 
 every detail. 
 
 Provisions of 1907 Contract Ordinances 
 
 They provide for maintenance of the street railways in 
 first-class condition and for furnishing first-class trans¬ 
 portation to the people. They specifically provide that 
 carfares for adult passengers shall be five cents for a con¬ 
 tinuous trip in one general direction within the present or 
 future city limits, and that transfers shall be given at all 
 connecting points. And in the Unification ordinance 
 passed November 13, 1913, and accepted by the companies 
 the permanence of the five-cent fare is re-insured. And 
 it will be remembered that in the campaign for ratifica¬ 
 tion of these ordinances by the people, the leading induce¬ 
 ment. and rallying cry to secure votes was: “One City, one 
 fare, five cents with universal transfers.” 
 
 These ordinances also contain provisions giving the City 
 the right to purchase the properties of the systems during 
 the terms for which they run, upon six months’ notice, 
 and at the end of the terms, upon specified valuations. 
 Under these ordinances the so-called capital account has 
 been built up, which now amounts to more than $157,000,- 
 000 and is the price which the City would have to pay the 
 companies for their properties in case it desired to pur¬ 
 chase. On this capital account, or cash purchase price 
 to the City, the companies draw five per cent annual in¬ 
 terest and deduct same from gross receipts before any 
 division of net receipts is made between the Companies 
 and the City. 
 
10 
 
 Operation of “Capital Account” 
 
 According to the Companies 7 claims this $157,000,000 
 represents the cost of their properties, but it includes five 
 per cent for brokerage and ten per cent for contractor’s 
 profit, which fifteen per cent never went into the prop¬ 
 erty at all and on which the Companies ha\4e earned five 
 per cent or more during the last twelve years. In other 
 words, every time the Companies spent $850 for property 
 or equipment or additions thereto they added $100 for 
 contractor’s profit and $50 for commission, thereby creat¬ 
 ing $1,000 worth of value and the $1,000 so created was 
 added to the Companies’ selling price of the property, 
 thereafter bringing them an annual interest return of five 
 per cent. 
 
 Companies Plead for Tax Reductions 
 
 This capital account is strictly a one-sided affair, be¬ 
 cause the cost of all construction and equipment of old 
 street railway lines and new is added to it from time to 
 time while nothing is ever deducted on account of prop-" 
 erty depreciated or worn out or removed from service. 
 In 1917, Mr. William W. Gurley and Col. E. R. Bliss, 
 lawyers, representing the traction interests, appeared be¬ 
 fore the Cook County Board of Review and stated that of 
 this capital account, which then amounted to approxi¬ 
 mately $150,000,000, $55,775,000 was gone and there was 
 nothing left to represent it, and that $11,000,000 had been 
 invested in pavements and $2,000,000 in sewers which be¬ 
 longed to the City of Chicago and that the balance was 
 only worth one-half on account of depreciation. How do 
 you think the citizens of Chicago in case of a desire to 
 purchase the traction lines would relish paying $13,000,000 
 for streets and sewers which they already own, and $55,- 
 775,000 for property which it is admitted by the owners 
 went to the scrap heap several years ago? And where 
 is the benefit to the public in the privilege exercised by the 
 Surface Lines Companies of drawing five per cent annual 
 interest on the cost of pavements and sewers which belong 
 
11 
 
 to the people and which were installed only in considera¬ 
 tion of the people awarding the Companies the most valu¬ 
 able of all their possessions, the use of the public streets? 
 
 Utilities Commission Admits Inflation 
 
 In the latter part of April of this year, at the hearing 
 then pending before the State Public Utilities Commission 
 on the application of the Surface Lines for an increase 
 in rates of fare, where I appeared as a witness and testi¬ 
 fied, I called to the attention of the Commission the state¬ 
 ment of the representatives of the traction companies be¬ 
 fore the Board of Review and the Commission in denying 
 the application for increased carfares at that time found 
 that the capital account of the Surface Lines embodied 
 items aggregating at least $44,000,000, which represented 
 no property at all and could not be considered for rate¬ 
 making purposes. 
 
 Companies’ Receipts for Last Twelve Years 
 
 The Surface Lines Companies have received, under the 
 ordinances, for the twelve-year period ending January 31, 
 1919, six per cent each year of the gross receipts for main¬ 
 tenance and repairs and eight per cent for renewals and 
 depreciation. Approximately two-thirds of the amount 
 collected for renewals and depreciation has been spent for 
 the purposes intended. Consequently the Companies now 
 have on hand a cash balance in this fund amounting to 
 $9,686,052,20 upon which they are drawing interest. They 
 have also received during the past twelve years 5% each 
 year on the capital account as hereinbefore mentioned, and 
 this includes 5% upon the $44,000,000 which the Public 
 Utilities Commission found to be the minimum inflation, 
 and runs concurrently with 5% upon the $55,775,000, $11,- 
 000,000, $2,000,000, and other items which the representa¬ 
 tives of the Companies before the Board of Review stated 
 meant nothing to them and ought not to be taxed, not 
 even the interest already collected by them. They have 
 also received forty-five per cent of the net divisible re¬ 
 ceipts remaining after deducting the foregoing items. In 
 all they have received, excluding the amounts for main- 
 
12 
 
 
 tenance and repairs and renewals and depreciation, and 
 adding the allowance for contractor’s profits and broker¬ 
 age, a grand total of $104,159,526.63 during the twelve 
 years ending January 31, 1919. 
 
 Returns on Investments Profitable 
 
 President Leonard A. Busby of the Surface Lines, be¬ 
 fore the Public Utilities Commission last month, testified 
 that for the twelve-year period above mentioned the aver¬ 
 age return to them on the capital account, or purchase 
 price, had been 6.273%. Obviously this means that with 
 the water squeezed out and honest financial values substi¬ 
 tuted for fictitious ones the companies have earned extra¬ 
 ordinary large returns on their actual investments. In 
 fact, if they had conducted the business of their companies 
 in an honest manner, under straightforward systems of 
 management and accounting, they could have paid ade¬ 
 quate wages to their employes at all times, maintained the 
 five-cent fare and rendered efficient traction service to the 
 people. 
 
 Companies’ Indebtedness Questioned 
 
 The Companies plead that they should be permitted to 
 earn enough to pay the interest on their outstanding in¬ 
 debtedness, which exceeds $140,000,000. I believe that a 
 large part of this indebtedness is made up of items of old 
 indebtedness carried forward from 1906 and 1907. when 
 a re-organization of the Companies took place and when 
 the old creditors and stockholders in the various Com¬ 
 panies were taken care of in devious ways. The old stock¬ 
 holders were given stock, or participating shares, at the 
 time of re-organization on which the Surface Lines have 
 been paying dividends during the twelve years just closed. 
 Obviously these stockholders, or holders of participating 
 shares, have no actual equity in the properties now, and 
 have not had for many years, as the capital of the Com¬ 
 panies is grossly inflated and they are mortgaged for mil¬ 
 lions of dollars more than they are really worth. The 
 whole financial fabric of the Surface Lines, with their 
 
13 
 
 capital account and indebtedness, is a conspiracy against 
 the public interest and the people who ride on the cars 
 and pay the fares carry the entire burden. » 
 
 Companies Can Break Contracts—People Cannot 
 
 The hearing before the Public Utilities Commission on 
 the application of the Surface Lines as to what permanent 
 rates they may charge commenced yesterday. It is well 
 understood that at this hearing the Companies will contend, 
 in short, that the City is bound by the contract ordinances, 
 but the Companies are not. They will even contend that 
 they are at liberty to break the contract ordinances rela¬ 
 tive to their capital account and have their properties re¬ 
 valued on the basis of war-time prices for labor and ma¬ 
 terial, so that they can pay themselves more brokerage, 
 greater contractor’s profits and larger interest returns. 
 I anticipate that the Public Utilities Commission may sus¬ 
 tain them in all their contentions, but I sincerely hope and 
 believe that the courts will not confirm any such high¬ 
 handed and arbitrary proceedings, but, unfortunately, the 
 Companies will in the meantime be pocketing the revenues 
 from increased fares and there may be no immediate 
 method of obtaining relief for the people who are com¬ 
 pelled to pay. Whether or not we can ever recover for 
 the people the excess carfares collected is a legal problem 
 which I will not at this time discuus any further than to 
 say that I have in^ructed the Corporation Counsel to ask 
 the courts to make some order by means of which repara¬ 
 tion for injustice may be ultimately secured. 
 
 Change in Traction Management Imperative 
 
 I think from the foregoing, and from public knowledge, 
 that something must be done to change conditions. The 
 City cannot deal with the Surface Lines Companies any 
 longer, as at present constituted, because they are con¬ 
 tract-breakers. They are not only contract-breakers with 
 the City government, but with the people who were in¬ 
 veigled into voting for, and approving the ordinances, 
 which provide for “One City, one fare” for a term of 
 twenty years; and that fare five cents with universal trans- 
 
14 
 
 fer privileges. The ordinances solemnly obligate the Com¬ 
 panies to charge only five-cent carfares, yet they trample 
 their obligations under their feet when it serves their 
 greed to do so. They repudiate the provisions of the law 
 which protect the community’s rights and seek refuge in 
 the. provisions which protect their own. This is a mani¬ 
 festation of multi-millionaire anarchy, which will prove 
 fatal to popular government unless permanently checked. 
 The streets of Chicago belong to the people and street car 
 transportation, under just and reasonable conditions of 
 service, is the right of the people. Therefore, I submit to 
 the City Council, and to the people of Chicago, that a plan 
 
 must be devised which will result in the street car svstem 
 
 •/ 
 
 of Chicago being taken out of the hands of the present 
 management and vested in an authority directly respon¬ 
 sible to the people whereby the car-riding public may have 
 adequate service at a five-cent fare, and that the employes 
 who operate the system may he paid wages commensurate 
 with their service. 
 
 New Governing Agency—“Transportation District of 
 
 Chicago’’ 
 
 It is futile for the people to expect representative gov¬ 
 ernment that represents them only through a so-called 
 Public Utility Commission appointed by a power, itself 
 distant from the people immediately concerned. I would 
 suggest that a new local government be formed, to be 
 known as “The Transportation District of Chicago 7 ' or by 
 some other descriptive title. It may be argued that we 
 have too many local governing agencies now. That is 
 true and consolidations should be effected. But this is 
 one agency that should be separate and distinct from all 
 others, bear no relation to political conditions which sur¬ 
 round others, and be so organized and constituted as to he 
 directly responsible to the people who comprise it. 
 
 This proposed government should have the power to 
 levy taxes and issue bonds in order to raise a sufficient 
 revenue to purchase or build and equip street railway 
 
15 
 
 properties sufficiently extensive to serve the City of Chi¬ 
 cago, and its environs in the most modern and efficient 
 manner. 
 
 To Be Managed by Trustees Elected by the People 
 
 “The Transportation District of Chicago” should include 
 in its territorial limits the metropolitan district of Chicago 
 whatever length or breadth of territory that may be deter¬ 
 mined to be. The governing body of this proposed “Trans¬ 
 portation District” should be a hoard of five trustees 
 elected by the people. These trustees should be elected 
 at the outset, one for one year, one for two years, one for 
 three years, one for four years, and one for five years, and 
 thereafter one each year for a five-year term. The elec¬ 
 tion each year for trustees to take place at the time of 
 th aldermanic elections, thereby involving no extra ex¬ 
 pense. By this system the people would exercise close 
 control over the general policies of the district and could 
 effect changes or alterations in management each year if . 
 they desired. Through a government such as this, the 
 traction situation would at all times be in the hands of 
 officials directly responsible to the people and local trans¬ 
 portation would be operated, not with a view to fianancial 
 profits and returns on unearned increment, or for creating 
 wealth through the swindling processes of maintaining 
 artificial values on worthless or non-existent properties, 
 but for the single purpose of giving the people useful 
 commodious and accommodating transportation at a five- 
 cent fare. 
 
 Companies Rights Should Be Forfeited 
 
 I hope there is a reasonable ground to believe that the 
 City may soon rescind and cancel the rights of the present 
 Surface Lines Companies in the street of Chicago under 
 the contract ordinances for the reason and upon the 
 ground that the companies have refused to be bound by 
 said ordinances and have renounced their contracts with 
 the City and with the people, and for other good and 
 sufficient reasons, some of which I have called to your 
 attention. 
 
16 
 
 
 The contract ordinances are very plain as to forfeiture 
 of rights and privileges in the streets through failure to 
 comply with all of the terms and conditions of the ordi¬ 
 nances upon the part of the Companies. One of the most 
 important terms and conditions of these ordinances is the 
 maintenance of the five-cent fare throughout the period of 
 time covered by the ordinances. 
 
 # 
 
 Future Financial Arrangements 
 
 It should be borne in mind that under the contract or¬ 
 dinances of 1907, the City has some twenty-five million 
 dollars in the traction fund and other monies available 
 when the rights of the present traction companies are 
 ended, to start the building of subways and such lines of 
 transportation as may be required to create a superior sys¬ 
 tem under direct control of the people who use it. Long¬ 
 term bonds can he issued to procure money necessary to 
 acquire existing properties or build a new system and 
 thereafter the properties will be self-sustaining and the 
 income from them sufficient, not only for their operation, 
 but to pay interest on bonds and provide a sinking fund 
 to meet the principal when due. Such bonds will be desir¬ 
 able security and there will be no difficulty in marketing 
 them at a comparatively low rate of interest. 
 
 I am advised that there is no constitutional objection 
 to the plan herein proposed. Enabling legislation will be 
 necessary, but I am confident that the Governor and the 
 Legislature will give the City such aid if the people de¬ 
 mand it. Governor Lowden in the platform on which he 
 was elected, and in his campaign speeches, pledged him¬ 
 self to home rule for Chicago. In his first message to 
 the Legislature in 1917, he declared as follows: 
 
 Governor Lowden’s Position and Legislation 
 
 “We have declared for the control by Chicago of 
 its own local public utilities. Just how this control 
 should be worked out is a problem peculiarly resting 
 upon the people of Chicago. The great metropolises 
 of the world become in a large measure political units. 
 The public utilities of such cities relate themselves to 
 the business of the people, to their well being at home, 
 
17 
 
 to their recreation, and, in fact, are closely woven 
 with their daily life. The question, therefore, of the 
 control of the public utilities of Chicago principally 
 affects the people of Chicago, and they should have 
 the right of control of such utilities. The form that 
 such control shall take will not answer the needs 
 unless it shall be satisfactory to the people of 
 Chicago.” 
 
 In view of the record of the Governor on local public 
 utility control and his attitude toward home rule for Chi¬ 
 cago, and in the light of the foregoing declaration, all that 
 it is necessary for the City Council to do is to pass the 
 ordinance which I will submit and Governor Lowden is 
 in honor bound to call a special session of the Legislature 
 to enact the legislation which will enabe Chicago to con¬ 
 trol its public utiities in manner and form satisfactory to 
 its people. 
 
 Change in Car Routing Desirable 
 
 I also believe that a practical change should be made 
 in the routing of transportation lines through the City 
 which will eliminate curves and switching in the down¬ 
 town district. All lines should run through congested dis¬ 
 tricts in the interest of the whole people, rather than for 
 the benefit of special interests. I cannot conceive of a 
 competent engineer who, if unhampered in his operations, 
 would lay out a plan for the operation of a street rail¬ 
 way system in a city like Chicago and provide for a ter¬ 
 minal or switchyard at the point of greatest congestion. 
 
 Commission Needed to Plan Steps 
 
 Having set forth my general suggestions for a plan of 
 acquiring and operating a street railway system by 
 trustees or managers elected by the people and who by 
 the terms of their election must operate the system solely 
 in the interest of the people, I request that you authorize 
 me to appoint a commission to work out the problems in¬ 
 volved in detail, draft the necessary legislation, and take 
 such other preliminary steps as may be expedient to bring 
 the plan to an issue before the people in definite form, 
 and that you provide such funds as may be necessary for 
 the purpose either from the traction fund or from other 
 sources. 
 
18 
 
 Last Commission Turned Out Defeated Ordinance 
 
 In this connection I call your attention to the fact that 
 numerous commissions, committees and individuals have 
 been appointed in the past to investigate, study and report 
 on local transportation conditions and the City has on 
 hand a wealth of data upon which thousands of dollars 
 have been spent to no avail. The last commission con¬ 
 sisting of William Barclay Parsons and Robert Ridgway 
 of New York and Bion J. Arnold of Chicago spent $295,- 
 467.17 upon its work and the work of the local transporta¬ 
 tion committee embodying its recommendations. This re¬ 
 sulted in the passage of the ill-fated ordinance vetoed by 
 me, passed over my veto, and defeated by the people on 
 referendum vote last November. This was a trustee or¬ 
 dinance with trustees selected in advance, all for nine- 
 vear terms, and all of whom were connected with the 
 present traction management or financial institutions 
 closely related to the traction interests and not one of 
 whom could be said to represent the interest of the car¬ 
 riding public. 
 
 Past Procedure Differs from Proposed 
 
 Past proceedings differ radically from what I herein 
 propose. Previously the Council named the commissions 
 and became responsible for the results of their efforts. 
 In this instance I anticipate appointing the commission and 
 will assume the responsibility that its work will result 
 to the advantage of the people. Previously, valuations 
 have been put upon the Surface Lines which included 
 every fictitious and inflated value known to tricky and 
 ingenious manipulators. In this case I propose that what¬ 
 ever properties are assimilated shall be bought or built 
 at their actual cost. Previously the ordinances have con¬ 
 templated, directly or indirectly, increases in rates of car¬ 
 fare. Here I contend that the people shall have trans¬ 
 portation at five-cent fares and that transfers shall be 
 universal for travel in a general direction. Previously the 
 lines have been located to suit the traction companies and 
 favor special interests. Here I propose that the lines be 
 located solely for the purpose of serving the public and 
 
19 
 
 of being maintained and operated under direct respon¬ 
 sibility to the people and in their interests alone. 
 
 Ordinance Submitted—End Private Ownership, Give Peo¬ 
 ple Ownership and Five-cent Fare 
 
 I submit herewith a form of ordinance and urge im¬ 
 mediate consideration thereof to the end that action may 
 be initiated on our traction problems without undue de¬ 
 lay. Prompt passage of this ordinance means that work 
 on preliminary details can be started at once and that at a 
 comparatively early date legislative, financial and engin¬ 
 eering plans may be reported that will mean a lasting end 
 to private ownership and operation of local transportation 
 service, which has at all times been the servant of organ¬ 
 ized wealth and greed. In place thereof we will have 
 transportation under a representative ownership and op¬ 
 eration directly controlled by the people for all time to 
 come, and such control in my judgment will prove effi¬ 
 cient, economical and responsive to public opinion which 
 private ownership and operation never has. Instead of 
 trustees selected by traction magnates and related finan¬ 
 cial interests for long terms, whose concern for the people 
 is measured only in money and profits, we will have 
 trustees elected for five-year terms by the people whom 
 the transportation serves and whose whole solicitude will 
 be for the public welfare. 
 
 I am convinced that this form of ownership and opera¬ 
 tion is the safest and best policy to provide proper and 
 adequate transportation at a five-cent fare. It will mean 
 a people’s ownership and operation in which the people 
 directly affected, and who pays the costs, become entitled 
 to full voice, under a well ordered system, in the man¬ 
 agement and direction of their own service. 
 
 Respectfully submitted, 
 
 Mayor. 
 
20 
 
 AN ORDINANCE 
 
 Authorizing the Appointment of a Commission on Local 
 Transportation to Investigate, Study and Formulate 
 Plans for the Solution of Local Transportation Prob¬ 
 lems. 
 
 Whereas, The Mayor of the City of Chicago, on September 
 9, 1919, sent a message to the City Council of said City, in which 
 he outlined a plan for the solution of the local transportation 
 problems confronting the people of the City of Chicago and 
 surrounding territory by the creation of a local transportation 
 district administered by trustees elected by the peopie thereof 
 which should own, control and operate a comprehensive system 
 of street railways with transportation at a five-cent fare; and 
 
 Whereas, It is necessary, in order to bring said plan before 
 the people in concrete form, to secure enabling legislation and 
 to work out the legal, engineering and financial problems con¬ 
 nected therewith, and such details can only be arrived at through 
 the employment of engineers, accountants, attorneys and others 
 who have expert knowledge on the subject of local transporta¬ 
 tion ; therefore 
 
 Be It Ordained by the City Council of the City of Chicago: 
 
 Section 1. That the Mayor be and he is hereby authorized 
 and empowered to make and execute a contract or contracts for 
 and on behalf of the City of Chicago with persons qualified to 
 perform the duties herein prescribed for them, who shall form 
 a commission for the investigation and study of local transporta¬ 
 tion conditions and who shall formulate plans for the acquisition, 
 extension, control and operation of street railways serving the 
 public in the City of Chicago and surrounding territory. The 
 Mayor shall proceed in such manner and use such means as he 
 deems proper in order to secure for this purpose engineers, 
 attorneys and accountants of the highest standing in their pro¬ 
 fession who have had the best possible experience in the line of 
 transportation work tending to fit them for solving the ques¬ 
 tions connected with the local transportation situation and the 
 presentation of plans for creating a local transportation district 
 administered by trustees elected by th,e people. Separate con- 
 
21 
 
 tracts may be entered into with the persons named for such 
 commission, the periods for which such contracts shall run may 
 begin at different times, and the compensation to be paid to such 
 persons forming said commission may vary and shall be deter¬ 
 mined by the Mayor. 
 
 Section 2. It shall be the duty of the said Commission to 
 make a complete and thorough investigation of the whole subject 
 of local transportation and the problem of obtaining improved 
 transportation facilities for the City of Chicago and surround¬ 
 ing territory by means of street railways, and to formulate plans 
 for the creation of a public body for the purpose of owning, 
 controlling and operating a system of local transportation in a 
 district which shall embrace the area of the entire City of Chi¬ 
 cago, and such other portions of the areas of adjoining cities, 
 villages and towns as logically form a part of the metropolitan 
 district of Chicago. Said Commission shall also cause to be 
 drafted such legislative bills as may be necessary or expedient, 
 for presentation to the General Assembly, whereby the manner 
 of forming such district and the delegation of powers thereto 
 are fully defined and set forth, such proposed legislation to pro¬ 
 vide for the formation of such local transportation district 
 through a referendum vote of the people in the territory affected. 
 
 It shall further be the duty of such Commission to prepare 
 a series of plans with such detail as may be necessary by which 
 a complete system of street railways, including all necessary 
 subways, structures and appurtenances, adequate for the present 
 and future needs of such transportation district, may be provided 
 either bv the construction of new lines or by purchase, con¬ 
 demnation or otherwise. 
 
 The said Commission shall complete its work within nine 
 months from the time the City Council shall have made the nec¬ 
 essary appropriation therefor, or shall otherwise have provided 
 the means of proceeding with said work, and the said Commis¬ 
 sion shall within such time submit to the Mayor for transmis¬ 
 sion to the City Council a full report thereof, together with the 
 plans worked out and recommended by it, the proposed enabling 
 legislation, and all other matters prepared in pursuance of the 
 powers and duties herein prescribed. 
 
 Said Commission shall also make reports to the Mayor on 
 any phase of its work when the same is called for by the Mayor 
 
22 
 
 and at such other times as the Commission may deem proper. 
 
 Section 3. To the end that a comprehensive plan for a 
 complete system of street railways as provided for herein may be 
 designed and presented in concrete form for approval and rati¬ 
 fication, said Commission shall have power to employ a secretary 
 and such attorneys, engineers, accountants, clerks, stenographers 
 and other employes as may be needed, to rent suitable quarters 
 and to incur other necessary expenses as the same may be 
 required. The City Council shall fix the salaries of all employes. 
 The compensation of the members of said Commission and the 
 appropriate expenses for same and for any report or reports 
 made by same, including the printing and circulation of such 
 reports, shall be paid out of appropriations now made or here¬ 
 after to be made for purposes of street railway construction and 
 drawn from the deposits made by the traction companies under 
 the terms of their respective ordinances, commonly known as 
 the traction fund, or from such other fund or funds as the City 
 Council shall deem proper. The total amount to be expended 
 for all purposes named herein shall not exceed the sum of 
 $250,000. 
 
 Section 4. This ordinance shall take effect and be in force 
 from and after its passage and due publication. 
 
 

 
 
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