New-York tribune., 1902-02-13
BIG BOND ISSUE A GAMBLE.
B. R. T. SPEcULATING on THEfFUTURE
OF BROOKLYN
GETTING READY FOR IMPROVEMENTS
WHICH THE GROWTH OF THE
BOROUGH MAY DEMAND.

WHICH THE GROWTH OF THE
BOROUGH MAY DEMAND.
1t may be fortunate for the speculative hold
Of Brooklyn Rapid Transit stock that the
announcement Of the projected bond issue of
s150.000l000 was ruade late on Tuesday, and on
the of a Stock Exchange holiday, time be-
ing thus afforded foT consideration of the situa-
tion. The proposed issue is vast in amount
that the first impression is necessarily entirely
unfavorable. Against this view. however these
considerations are presented by Brooklyn Rapid
Transit interests: With the rapid growth Of
Brooklyn the needs Of the company for better
ments and new equipment are increasing so
largely that they cannot be adequately met out
OF the earnings. The company urgently needs
additional power houses, the construction and
equipment Of which would involve outlay OF
millions With those power houses in opera
ton all the elevated lines could be operated by
electricity. the persistent and well grounded
complaint of cold cars would be stilled new
lines could be built, satisfying a public demand
in various parts of the borough and power for
moving the new traffic would be available Net
earnings have been declining in consequence Of
the continually larger proportion of GROSS earn
ings which has had to be applied to better
'ments and equipment in the Intellectual en-
oeaVor TO keep pace with the systems neces-
-sities; and, as noted, many improvements which
1T was believed would increase materially the
company's earning capacity have had TO be de-
1erred.
For the year ended June so, 1901, the net
earnings were S4.164,925. The fixed charges
were S3,5SI, I'D, the years operation thus show
Ing surplus of S577. .S03. For the six months
from July L to December 81, 1901, the gross
earnings increased $417, 900 and the net earn
'ings decreased $217,OOO. AS expressed by Presi-
dent Greatsinger. the bond issue, although
sought to be authorized now in its entirety, may
not be fioated TO its full limit for a century to
come. The $61,OOO.OO0 bonds at present out
standing TO be retired, some of them prob
ably not for many years to come. Assuming
mat none are retired before maturity and con-
'sequently that no premium will have to be paid
on them, there Will remain of the projected new
Issue applicable for improvements and the pur-
chase Of competing lines about 500 600 900. The
intention of the management is said to be to
Issue soon S5,000.O00 of the bonds the proceeds
ito be used for improvements. The interest on
'So,OOoOOO would increase the annual fixed
charges by 100000. an additional expense
which judging from the last reports OF earn
ings, the company will readily be BILE to meet.
With betterments no longer betrayed out of
gross earnings, the net earnings, out of which
liked charges must be met, will obviously in
crease. and a means Will be provided for meet
issues
Whether or not a result of the great sums
10 be put into the property by the large increase
of its funded debt. the earning power of the
company Will be increased so largely as TO make
possible the payment of dividends on the
S45.ooOOo0 stock and the gradual extinguish-
ment OF the tremendous bonded obligation now
being entered upon, time must tell
The object OF the enormous bond issue Of the
Brooklyn Rapid Transit Company is believed
-
road property in that borough not now owned
by the company. Although no negotiations have
thus far been made for the purchase of the
Coney Island and Brooklyn Railroad. II is be-
leved that this road will be acquired II the
price is not exorbitant. The Brooklyn Rapid
Transit Company viii undoubtedly use the fran
chises which it now holds in Queens County.
and purchase the Jamaica Bay Railroad. which
extends from the terminus of the Kings County
Elevated Railroad to Far Rockaway, Queens
and other points in Quens County. If Living
iston-st is widened planned line will be
laid through that thoroughfare which will re-
.lleVe the congestion in Fulton-st. President
GreatSinger said yesterday:
Our S150oO00G0 bond issue is a gamble on
the future of Brooklyn. We believe the city
IS rapidly growing in population and that this
increase viii neceSSitate a constant outlay for
power, equipment improvements and extensions
The bonds will be issued to provide for the
requirements of this growth The idea of ac-
quiring any Of the other roads in Brooklyn or
queens has not yet been discussed by the board
OF directors. There has, OF course, been more
or less talk Of such a thing for time. but
deter
mined. The Coney Island and BROOKLYN Rail-
road property would be of immense value to US.
because 1t covers territory that do not touch,
but l can see no reason why should buy the
road unless 1t can be obtained at a reasonable
cost.
''The $50 600 issue has been considered for
six months. The magnitude OF the issue is
rather impressive, but IL is fully justified by
what we believe will be required. The popula-
tion is increasing rapidly. and the people have to
ride. New lines will have to be built, old ones
extended, and the property generally improved
all which w a oT1fot
TO extend lines in Greenpoint from which
section We are receiving numerous demands for
better service We will put in the Saratoga
ave line, the SiXteeth-st. line extend the Union
st. line and make number Of other extensions
into the outlying territory which is rapidly
growing up. We building a power
house in Third-ave., but expect that
this is completed the demand for increased
service will make II necessary TO erect another.
Heretofore have used earnings TO make
all improvements, but the bonds will now be
used