Omaha daily bee., 1909-05-16

surplus: .. 25707D
$25s185o672
The total number of passengers carried by the entire ss-
tenn in 1908 was 1857, 993. Of this number H. ,947 rode
on transfers or free, the latter being comparatively few and rep
resentng tremen and policemen in uniform and the Company's
employees
In 1908 the percentage Of passengers carried on transfers
was Il per cent. In 1908 the proportion had grown to 80 per
cent and 1t is constantly increasing. This condition not only
decreases the earnings per passenger, but tends to decrease the
net earnings of the Company.
Professor Mortimer E. Cooley, Dean of the Department
Of Engineering at the University of Michigan and a foremost
street railway authority, recently, while testfying in an import
ant case, discussed the subject of universal transfers, stating
that they increased travel, but diminished earnings per pas
Senger All expenses advanced with the number of
passengers carried, he said, and therefore, universal
transfers had resulted not only in decreased net earn
1ngs per passenger, but in decreased net earnings for
the Company.
in Omaha and suburbs to 376 cents in 1908.
In the general balance sheet will be noticed al item of S687421e
reserve for depreciation" The Company is setting aside a constantly increas-
ing amount each year-$24oOOO for 19O9-as a depreciation fund. This
account is for this purpose OF replacing construction or equipment worm Out
or junked because of obsolescence. 1t does not go for additional equipment
orr for new construction, but simply to maintain the operating efficiency of
the existing plant
Hthere is no depreciation fund the expenditures for this purpose find
their way hy into int the He ca R1l 1@o This has been declared contrary to public
sion n by tn United States Supreme Court 1t EprOper therefore to make
pfq ss ro tr ds p"d nssn d tUm the the e ssgGinGs, tn order 0 preserve the integrity
Up to 1898 the local street railways did not succeed in earning enough
to establish a depreciation fund. AS result depreciation charges found their
way into the capital account There was no alternative since it wasm anifesdy
impossible to increase the rate of fare
In considering the capitalization of the Omaha & Council Bluffs Street
Railway Company it should be remembered that it reflects actual conditions
developed while Omaha and Council Bluffs wereg growing from frontier outpoSs
to large and splendid cities. The mar who put his money in real estate and
kept it there has seen his capital increased many times The nan who put
his money in r street railways received nothing in the nature of profits for
years. and today is receiving less than would be deemed remunerative in
mercantile or manufacturing lines
This particular insalment of or series marks a departure in corporate
methods sin the United States We have been presenting articles for many weeks
in the hope of making our Company and its affairs understood. Our effort is
being watched all over the country asa guide to indicate how far a large
corporation may go in dealing with the public on termso of utmost frankneSs
G. w. WATTLES, President,
Omaha & Council Bluffs Street Railway Company.
Ghe Inaallment Next Sunday will be the Concluding Chapter of this
Series, and will Recapituhte what has already been prsennd)