If the net earnings, after making this allowance for depreciation, and after providing all expenses of operation including ordinary repairs, amount to as much as twice the interest charges upon the bonds outstanding, it is probable that the bonds may be taken with safety. Before finally determining the question, however, certain political factors must be taken into consideration. The relations of the company to the leaders of the dominant political party must be investigated. The likelihood of agitation looking toward a reduction of fares must be considered and the possibility of increase in taxes (if below the legal limit) must be weighed. The probable attitude of the legislature on the question of renewing the franchises when they expire must be considered. In general, it must be learned whether any real ground of contention exists between the company on the one hand and the public and its representatives on the other, because it is inevitable that the company will weaken its independence of position by too close a connection with politics, and that the physical property will suffer if there is any lack of uninterrupted attention to it. Finally one other thing should be investigated--the amount of the accident account and its proportion to the net earnings of the company. On small lines a single case of heavy damages will sometimes make serious inroads upon the earnings. The foregoing is a summary, necessarily brief and imperfect, but true in its essential outlines, of the main points which should be considered in judging the safety of street-railway bonds. The question remains, how far does the average street-railway company satisfy these requirements? Broadly speaking, street-railway bonds are not yet to be classed in the first rank of investment securities. The troubles which have come to a head in the financial operations of the traction systems in New York and Chicago are typical of troubles which are likely to occur elsewhere from the same general causes--overcapitalization in the first place and insufficient allowance for depreciation in the second place. In both New York and Chicago the crisis was hastened by open and obvious overcapitalization, which is almost inevitable when many independent lines are merged into one system. The same trouble, however, is apt to occur in other traction systems where this evil appeared less flagrant at the outset.