The Washington times., 1911-05-01
STREET RAILWAYS PILING UP
WEALTH.

If the street railway companies of
Washington were in an impoverished
condition they might be able to present
some sort of a reasonable argument
against transfers that would permit
patrons to change from the lines of one
to the lines of the other without extra
charge, and against selling tickets at
reduced rates to school children. But
they are in no such condition. The
street railways of Washington are
prosperous. They are more than pros
porous; they are rich. They are bask-
ing in abundance. They are paying big
returns to stockholders and are expert
encing no difficulty whatever in keeping
up their properties. Besides that, they
have a surplus left over every year.
Even if universal, interchangeable
transfers and school tickets would cost
them something-which is not certain
by any means-they could stand the
strain.
To start with, the street railway
companies of Washington are paying
dividends on huge volume of watered
securities-securities that don't repre-
sent money actually spent in building
up the properties. They are able to
pay dividends on this imitation because
of the big profits from operation.
Just put this little fact up on the
table in front of you and look at it
closely for a few minutes:
The Capital Traction Company is
capitalized at S559,675 per mile!
The Washington Railway and Elec-
tric Company is capitalized at 1886, ,26O
per mile!
How is that for an example in high
finance, in the Capital of the Greatest
Nation on Earth, in the Twentieth Cen
tury?
And that isn't all the story, either.
That is based on the total miles of
road, regardless of whether it is road
for an underground or overhead trolley
system. The underground system means
expensive construction, but a great
deal of the road of both companies is
for overhead operation. About one
third of the Washington Railway and
Electric lines are operated with over
head trolleys.
As a matter of fact, the cost of con-
struction for the underground system
is way below the capitalization of
either company. Including track, sub
ways, rolling stock, power houses, and
all other permanent investments, the
cost of an underground system is not
to exceed 100000 to 1925, 900 per mile
Yet one of the Washington companies
is capitalized at 1886, ,26O per mile and
the other at $559,675, while on a con-
siderable part of their roads cars are
run by current from overhead instead
of underground wires.
You, Mr.. Washingtonian and Mrs.
Washingtonian, are paying dividends
on that surplus capital, and you can't
even get the privilege of transferring
from the cars of one company to the
cars of the other without coughing up
two fares.
For fear these figures may be ques-
toned, The Times wishes to state that
they are found by dividing the total
capitalization of each company, as
given in the companies sworn state
ments to Congress for the year ending
December 81, 1909, by the total miles
of road also given in the same sworn
statement.
The Capital Traction Company's total
capitalization is $l6,OOO,OOO. Its total
miles of road is 2s.5ss. The former
figures divided by the latter give ..e
capitalization per mile, $559,675.
The total capitalization of the Wash
ington Railway and Electric Company
is $27 ,995,Ols. Its total miles of road
is 1925, which gives it capitalization
of 1896, ,260 per mile.
Both companies are paying substan-
tial dividends on their stock and meet
ing interest charges on their bonds.