Omaha daily bee., 1909-04-03
ERIE WANTS THIRTY MILLIONS
Commissioned Decker Offers Reasons
why They should BE
Issued.

The opinion of the New York Public Serv-
ice Commission of the Second district, in
the matter of the application of the Erie
Railroad for permission to issue $SO.OOO,O0
in bonds, has been made public. Commits
sioner Decker, who wrote the opinion, says
I'm part:
1T is entirely possible that the company
might continue to get along perhaps fairly
well for a considerable period without re-
lief of the character here shown. The
volume Of traffic and revenue may be so
great thai it's net income would be sur
prisingly large. The board of directors
may be able to meet pressing debt pay
ments or secure extensions, and gain foot
holds of financial advantage through UNI
renting economies and constant compost
ton of debt obligations which would enable
the railroad operations to continue without
putting in force the arrangement here con-
templated. The Erie is a great property;
a large revenue producer. It's ability to
secure and handle very large traffic under
adverse conditions has been astonishingly
great, and with such a property in the
hands OF its present competent manage
ment, successful operating and financial re-
suits. Notwithstanding IL large and varied
debt burdens, would not be surprising
The showing of the company's operations
upon the whole system for the six months
ending December 81. 1908, indicates con.
siderable improvement OF revenue condi-
lions. For that period the gross operating
revenue was S26, POS, 3S2. IS, the operating ex-
penses and taxes were $40, 23S, 693. 90. the
operating income was $685., $50. A. After
adding income from all other sources, and
deducting all interest. rentals, etc, tho
net corporate income was 81 .9O2, 51s.19. The
ratio OF operating expenses TO income from
"ailroad operation was $3.50 per cent as
against 7s.0e per cent for the year ending
June 80, 1908 on this basis the gross rev
enue from operation for the year ending
June 30, 1893, would be So, 416, Ie5. 32, and the
net income after al deductions for that
year would be $3.50. O36.3 IS. 49,
This whole situation OF the Erie can be
well stated In a short paragraph. Possess
ing large earning capacity. in normal bust
ness years its condition is prosperous. it's
large net income from operation. coal min
ing and other sources enables u to nav its
large fixed charges, and project and pay
the cost OF large additions 10 the railway
property, and in view Of its debt burdens
its financial credit is good. But because
Of its large funded debt and annual in
%terest charges it shows quickly the effects
Of great business depression in it's finan-
eial statements and the condition OF its
credit; and in the absence Of any large
available surplus at such times the COM
pany faces conditions which prevent the
carrying on OF new or partially completed
necessary improvements, and which may
render IT incapable Of meeting all OF its
annual charges and maturing T-iScellsneous
obligations, thus creating a -ssity for
permanent or temporary exteI Of Ger
tain classes of debt.
TT is very evident that the remedy for
such a situation lies in a financial read
JustmeIJ that will enable the company IN