The times., 1901-06-09
IN THE BANKERS CIRCLE
Local Investment and Speculative
Gossip Of Interest.

Gossip Of Interest.
Bonds of the Washington Traction
and Electric Company i'm Surpris-
inGIy Good Dcmand-in Effort TO
he Made to Reduce the Expenses
The affairs of the Washington Traction
aud Electric Company have continued to
hold the attention of the business com
r,unitv during the past week. The ap-
rointu1ent of a receiver for the company
so soon after the default on the interest
uayment was a surprise TO + street gen
eraIly. As a matter of fact, 1t is beleEed
nv some not to have been contemplated
nv the insiders themselves until the day
before the receiver was actually appoint
ed Various theories have been advanced
TO explain the new move. The simplest
is the one most worthy OF crede1ce 1t
was probably discovered that some bond
holder. large or small, was ois'2sed to
question the wisdom of the committee
annotated. Such an opposition to the con
trolling interest can always create much
trouble and especially in such plan as
~ one proposed. The receiver was
therefore asked for by the controlling IN
terest itself to avoid all complications OF
an authority that the large majority OF
the boudholderS have signiiied their will
ingneSs to abide 10y any plan thdt may oe
adopted ny the bonGholdeIS commltlSe.
This would seem to make the Work OF the
committee fairly pleasant 1t IS under
stood too. that the stockholders OF the
crrnpany are in accord with the bond
holders and that they VIII consent 10 tile
assessment proposed. In case any stock
holders object to paying the assessment
they Will lose their stock apparently anu
a larger proportion OF the FePuiIvu @ @CS7i
will have TO be paid il by those that come
forward.
The present bonds Of the company have
been in good and surprising demand all the
mast week. When the receiver was ap-
pointed early in the week there was gen
eral desire among local holders to sell out
their bonds. Contrary to their expecta-
tions they were able to do SO, at the
prices prevailing. without any trou-
ble The supply became scaTcer and
the demand greater apparently as the
week progressed. The price advanced
steadily and yesterday. although no
sales were made, the lid was 6s24 and
the best offer 70 The buying all came
from New York. There is the best of rea-
son for SuppoSIng that il emanated from
the present controlling interest. What
the object Of this interest was in buying
the bonds must, OF course, remain in
NouBl- Inc people ludL btltNt sEt pan
of the reorganization committee win be a
success naturally suppose that the con-
trolling interest wishes to buy simply as
good Investment. 1t is also suggested
that good demand for the bonds and n
higher price than before the default in
the intergsf is the best possible way TO
keep outside bondholders contented and
prevent friction. The receiver was ap-
pointed to prevent friction. The avoid
ance OF friction IS a thing much 10 be de-
sired.
The Washington Traction and Electric
system Is considered by railway men to
be one OF the best in the country. Peoile
usually well informed do not consider
the outlook for the system by any means
hopeless, despite its bad beginning, from
financial standpoint Equipment and con-
struction have been purchased and in
stalled during the past two years that will
make further important expenditures in
this direction needless for some time to
come. But one problem viii remain in the
operation Of the system. the reduction of
operating expenses. The gross earnings of
the system are very large already and
they are growing steadily. Operating ex-
penses on other important traction sys-
tens are as low as and even lower than 80
per cent. On the Washington Traction
last year they Were not much below 20 per
cent. This year they viii be somewhat
smaller. ii IS said Later they need not
be so very far above 50 per cent perhaps
although probably they Will never reach
quite so low rate, as the percentage Of
Euburban lines is large The running OF
one big power house instead Of seven. as
at present, viii go q long way toward
making the required reduction 1t is es-
timated that il will save S100 600 a year
This sum alone is ) per cent of the gross
earnings.
The fixed charges of the Washington
Haa eea g4a
current gossip regarding the plan of the
Reorganization committee is to be credited
this amount win be cut to 800. 600 by the
scaling Of the bonds and the reduction of
the interest rate from ~ TO per cent 1t Is
said by people that have been intimately
identified with the affairs Of the company
that IL IS now earning 100000 year and
something more In the course of a year
or two. with the economies alluded TO,
there should be quite a surplus over for
the new preferred stock.
The proposition 20 form a bankers as
sociation in the District meets with gen
eral favor among the various financial
Institutions and it is probable that the
plan viii be adopted una nimousIy in the
near future. The different banks viii hold
their monthly meetings this week, and
will all vote on the question then Later
q meeting for organization will be held.
Inc nuuBtT OF AAle lIduCldl
Review" says Of the plan:
Bankers In these days Of keen compe-
tItion and immense business enterprises
must be wide awake to every change IN
the financial world. Business conditions
have so changed during the last few years
that a closer study of questions relating
70 finance in general must be pursued II
our nnanciers wish to be posted on the
current economic questions Of the day.
in no better way can such questions BE-
thoroughly studied and understood than
by q discussion Of them in some public
way. as, for instance, in a bankers con-
vention
That such associations are needed is
acknowledged by bankers everywhere. In
fact. such conventions are as much Of a
necessity FOR the banker in order to eX-
change his views on great economic ques-
tions as are clearing houses for the hand
interest and matters of local legislation
could be very prOlitably discussed in so
far as they would affect local banking
interests. Such an organization, repre-
sentinR nearly $50, ,000.0 go in assets. would
exert a powerful influence in the com
munity-
while the advantages from closer ac-
Quaintanceship would not be as great as
in State organizations still many officers
and directors would find Il profitable to
enjoy more Intimate acquaintanceship
with some Of car bankers than they do at
present
THE many problems engaging the atten-
tion Of our great financiers certainly de-
serve more than mere hasty news sum
mary OF such events. The questions re-
lating to these great interests In the
financial world must be car,.rtlIy studied
and discussed at length II W Ger hope to
have broad and comprehensive grasp Of