The Washington times., 1911-03-17
RAILWAY ORDERED
TO REDUCE FARES
Commerce Board Finds That
Local Line Is Grossly
Overcapitalized.
VERY BIG DECISION
IN A SMALL CASE
Would Mean Much Consistently
Applied to Railroads of
the Country.
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nish service between Alexandria an
Washington, in competition with tn
Southern railway and with ferryboat
plying on the Potomac river. AppaI
emily the road has been economical
and efficiently managed, and the serV
ice adequate and convenient. At pres
ent ii operates seYenty-three northboun
and seventy-two southbound trains pc
day.
Threefold Defense.
AS has been noted, the average dis
tance from Washington to Four Mil
Run, st. Elmo, St Asaph, Mt. Ida, ant
Del Ray is about five miles. Examina
ton of fares of other suburban line
entering Washington shows that gener
ally for similar or even greater dis
tances the single fare is 10 cents. Tha
fare would give the defendant substan
TALLY the same revenue per passenge
miles as it receives under the l5-cen
1are to Alexandria.
The defense presented by the railway
company may, in a general way, be di
Vided into three heads. First, it i.
asserted that the passenger travel from
the complaining towns is light anC
justified than would be maintained II
the trafflc were Of greater density. Sec
ond, that any reduction in fares is un-
warranted because lit is only within the
last lew years that the stock OF thi,
ralIroad has ever paid any dividends
and those paid have been very meager,
and have recently been reduced, If not
abandOnd altogether" Third 1t denies
in its answer that it is subject to the
act to regulate commerce.
An examination do g
annual reports to the Commission
1alls to Indicate that its financial con-
dltion is distressing. The total capi-
tai issued against its nineteen miles
Of line up to June 30,- 1910, is $3.95O,OO
or SZO1,694.74 per mile of line, COM
posed of $2,450.000 per cent bonds
secured by mortgage on the entire
property, of which $4,000 is held
in the treasury, and $l.5OO,OOO of capt.
tai stock. Neither the amount of
money invested in the property de-
voted to the service of the public.
nor the consideration received from
the sale of stocks and bonds is dis
closed and in the absence of eXplana-
ton, this seems plainly a case of
gross overcapitalization.
Present Fare Unjust.
In 1908 defendant paid the interest
on its bonds. l per cent dividend on its
capital stock, and carried forward q
net surplus for the year of $l7,452.2l;
in 1909 the interest charges were paid.
the dividend was increased to 2 per
cent, and the net surplus for the
year was $29,193.l9; in 1910 it again
paid, interest charges, 2 per cent
on its stock, and carried forward
a net surplus for the year of
SSS. 400. Al: IN that year it's net
income was 3,455.41, of which $50
600 was devoted to dividends and
500, 466.4l was credited to the accu-
mulated surplus. Therefore, had no
addition been made to the existing
surplus Of $2G5,5S5.39, it could have
paid per cent dividend on its
5 100000 of stock as well as the 5
per cent interest upon the bonds.
Assuming that the actual invest
lnent IN the property is $4,000 per
mile Of line, or $1,O0OOOO in ali he
in 1910 were sufficient aftar
aging aside a surplus, to return about
10 per cent upon une investment.
Again assuming that all of the 20
OOO trips between Washington and
me communities involved had been
Under lO-cent fare, and none of such
rips under round-trip or commuta-
ion fares, the net loss to the de-
tndant would have been $1,000: and
L would still have been able to meet
interest charges on its large CapitaI
pay all operating expenses, declare
ulVldend of 2 per cent on its stock
1000 'i'ai
Defendants single-ttip fare of Is
Kun, St Elmo, st. Asaph, Mount Ida.
md Del Ray is unjust and unreasonI
bile. and for the future il ought NOT |
o exceed 10 cents. An order will be |
inferred accordingly.
Merger Last Fall.
The Washington, Alexandria and MI
'ernon Railway Company and the !
Washington and Falls Church Railway
'"mpany were both taken over bv the |
Washington and Virginia Railroad Com |
amy last fall. Clarence p. King is the |
resident of the corporation and the
'ock is held in Washington and largely
y Philaaelphia and Pennsylvania capi- /
OF late there has been considerable ac-
WV In The shares of the stocks. the
hare. ~ o'4 AiOih 20
Iouav there were no transactions in
ne ne STOCK, but 3711 was asked, a higher
ore Than was bid yesterday.
ga H1s i 5eeh generally asserted in rail-
Gao Gao circles in Washington in the last
ear tnat the Gould road building nortI
rom Richmond will consolidate Hyitb /
ms ilne, which controls the only eIec-
.Ic railroao entrances into Washington
According to the last ramon. s1o,, i'll,
he Interstate Commerce Con,roiss,nrl TIIti
ne onlcers of the COMPANY in adJitior,
Q Mr.. King, are: H. H. Pearson ~
Ice president; John w PittOcLS Jt'' |
ery; w. H. Lawton, trea sH1rar.. 81 !
fU w. King, general manager. 1oSo,I
;. Hoelman, assistant general I,oop
ger; Percy Cliff. general sunerintap ta,I-
ent. All but the last three offcars 81
esidents OF Philadelphia. The snnaroi
lanager, assistant general r,snaco@
nd general superintendent are resiSants
Washington.
Company's Last Report.
The directors are Clarence P KING
H. H. Pearson, ir.. Phil.
delphia; Howard S. Graham. PbiIa-
elphta; S. Wynne Ffoulkes, PhiIa-
elphia: Edward H. Butler. Philadel-
hia; Frederick H. Treat, Wayne, Pa.
,dward H. Stokes, Melville, n J..
frederick Mertens, Cumberland, Nd:
ohm w. Pittock. Philadelphia.
Each share of stock Is entitled IN
ne vote. The last report of the com
any, made in 1910, shows that there
ere nineteen miles or roadway In the I
Alexandra ana Mt. Yer ,
on road, and twenty-three seventy-nine
ne-hundredths in the Washington. Ar 4
1gton and Falls Church road.
The total par value of the canital +
ock is s, 500, 600. A 2 per cent dividend
to $4,000, was declared dur
z the year.
In the funded debt statement II is
lown that the total par value out 2
anding is 81, $50, ,C00 The amount of in t
rest accrued during the year was r