The Bridgeport evening farmer., 1909-01-08

stance. An example where the bond issue ap- pears to be disproportionate to the
 value of the property upon which the bonds are secured is The Shore Line
 Electric Railway Company. It has common stock of $700 00O and preferred stock of $3CO,0o0 and S2 GOO, 900 of bonds; 1 its total property represented by the | above securities Is valued by the com pany at $232, ,504.O3. (See companys sworn return to the tax commissioner, dated November 19, 1908) .tt-- It is self-evident that over-capitali-
 zation must result either in increased rates to the public, poorer service, or decreased dividends. The extent to which it has been permitted in the past is indefensible and should be prevent eli.
 Ir the past over-capitalization has been attempted to be justified under the claim that unless street railway companies were allowed to issue capi- tai stock and bonds far in excess of the actual necessary cost of their plant and equipment, street railway lines would not be constructed in this State. The experience in Massachusetts would seem to disprove this. In that State, for many years, the laws relating to capitalization have been more strin- gent than those recommended by this commission. The Massachusetts stat utes have not only forbidden stock to be issued at less than par, but ire quently it has been required to be is7 sued at more than par; yet in that State there are now 2,22S miles of street railway (39th Annual Report of the Mass R. R. Commissioners, 1908 re-
 port, page 375), or an average of nearly
 27 miles of street railways per square mile of area in the State.
 In Connecticut there are 637 miles Of street railway Goth Annual Report Of the R. R. Commissioners, 1907 report, star-page 149), or an average of .13 miles of road per square mile or area in the State. Although Massachusetts street railway companies have forssey- eral years been subject to stringent
 commission supervision regarding then capitalization yet in that State there has been constructed more than dou- bic the street railway mileage per square mile of area which has been constructed in this State, where there has been no efficient supervision over or prevent ton of apitalizat1on
 The mileage of street railway lines
 Der capita of population is also larger
 in Massachusetts than in this State.
 The total funded debt and capitol
 stock of Massachusetts street railway
 companies, excluding ten miles of sun-
 way and elevated road in Boston (with which we have nothing to com
 nore in this State) is $110 ,655s SS9tn
 U9o8) Annual Report of Mass. R. S
 Commissioners. pages 336-339) Tha total mileage of road owned, eEEcludsnG
 the Boston Elevated as above stateo
 is 2.222 miles (39th Annual Repoft-:of
 Mass R. R. Commissioners. pages 5f2- 375) The average capita 'ization in that
 state Is. therefore, slghtly less thaH $50 000 per mile.
 The total apital stock and funded debt of all Connecticut lines ot street railway prior to the merger or theCon-
 solidated Railway Company with the New York, New Haven & HartforG
 Railroad Company was SIT 359 0s2.Ss
 (54th Annual Report of Conn. Railroad
 Commissioners, 1906 report pages 1Cs ana 112D The total street railway mile age in Connecticut was 625 miles a4th Annual Report of Conn. Ra1troad CoHl- missioners. 1906 report, page 109.3 The average capitalization of such rallWavS in Connecticut, therefore, was sfZS,fsf per mile.
 These figures show that the Massa- chusetts capitalization per mile or street railway in about two-hfthss that in Connecticut. This is not due to bet ter construction or to a larger. propor- tion of double track lines in this State as the percentage of double track street { railway mileage in Massachusetts, is slightly larger than in this fSfaJes ana it is believed that the construef1on or the street railways in Massachusetts compares favorably with that in this State.
 These figures demonstrate that super vision over capitalization has been roth successful and beneficial. It has re- suItAd in a reasonable capitalization, and has not prevented the construction of all lines reasonably required for public service. There is no apparent reason why a similar supervision in this state should not effect similar re-
 (Continued on page twelye.l