The Washington herald., 1914-10-13

low margin OF their own profits and
the state Of the investment markets. the
exhaustion Of the authorized amounts OF
most Of the older mortgages has driven
them more and more TO the expedient Of
short term notes, too frequently with
embarrassing results II
Baltimore and ohio's proposed new
mortgage belongs In the same class Of
Indefinitely expansible financing mediums
as those OF the New York Central and
the St Paul The limitation OF $500, ,0oo-
0O0 a little less than three times the
! amount OF the companys outstanding
stock, is only temporary, to be removed
by vote of the stockholders under GER
tain specified conditions making II safe
to do so. Chief OF these, aside from the
general judgment Of the directors and
stockholders as to the necessity of q
large issue and the sufiiciency Of the
net revenues at the time to assure the
payment Of Interest, is the condition that
at no time shall the bonds outstanding
under the new mortgage, plus the out
standing prior debt, exceed three times
the capital stock outstanding.
In other words, the new mortgage pro-
vides margin Of approximately S26l ,OOo.-
900 for additions and improvements. but
when these have been used up the stock
issue must have been increased beyond
the S2lo.0OO,o0O now outstanding before
more bonds may be issued.
Need OF stock Market.
]. S. Bache & Co. say: As long as the
Stock Exchange OF a country is closed
capital issues are held up and the whole
country feels the damaging effect.
Because the exchange 10 closed and
securities cannot be sold, cities, counties
and States have ben forced to drop i'm
provements and thousands of manufac-
turers have, reduced their production and
cut their payrolls.
The barrier to reopening the exchange
is the menace of a great mass Of foreign !
sales threatening to engulf IL, and this |
situation Is aggravated because q very /
large part of American securities is dis |
credited by the disastrous situation of |
the railroads. II the railroads OF the
country were making liberal earnings our |
securities would be the most attractive in
the world, because they would be the
highly profitable issues Of the only great
country in the world at peace Holders
abroad then, would keep back hundreds,
and perhaps thousands. OF millions OF
these securities, because they would be
eager TO hold them. believing in their
stability and liability to advance. Or
this new basis these securities would
be the last hIngs they would part with,
as they would be far safer than the Sc
money in hand with Europe at war.
Gas and Electric RcdaetiOns.
The annual report of the Consolidated
Gas, Electric Light and Power Company,
Df Baltimore. for the year ending June
10. 1914, shows the results of the first
years operations under the reduced rates
which were ordered in effect by the Pub
lie Service Commission of Baltimore.
The new schedule of rates is probably
he lowest on the Atlantic Seaboard at
he present time, the maximum rate for
gas having been scaled down from 80 TO
% per cent net per thousand cubic feet,
md the maximum rate for electricity
rom 10 to s1-2 cents per kilowatt hour.
Despite the drastic cuts in rates, gross
income Of the company during the past
'esr amounted 10 Ss,4e0,S96, as compared G
With s6Ili,9TS for the previous year when ]
higher rates We're being charged. This {
> an increase of $2s5, s22 or 476 per cent. 1
operating expenses and taxes, however,
howed a heavy increase over the pre-
ious year. and resulted in net earnings ,
( S,O5T,G4, a decrease OF $Si,7lS or 81 {
er cent. This falling on in net from 1913 6
largely attributed to increased cost of
as oil. taxes and rate reductions. !
Because Of sharp declines in receipts
he Southern Railway Company appealed
o the North Carolina Corporation Com
asking that II be permitted to
lold up improvements, which had been
'rdered until business RECEIVERS from war
fleets. The commission was also asked
o approve the discontinuance Of sixteen
passenger trains for the time being. d
The commission granted the request for f
hold-up in improvement expenditures o
nd issued an order allowing the tenn
lorary discOntinuanCe OF eight passenger =
rains.
Revenue of the Southern during three a
weeks of September declined S294, 1874
ross. 1t is stated that the 81, 900, 900 b
borrowed for double tracking part of the v
'Outhern's lines from Atlanta to WASH p
ngton and for widening. tunnels would
lot be diverted TO other purposes. 2
The head of a large equipment con- n
ern says that his company has not Il
educed salaries OF its executive force
s yet and does not intend to unless the p
resent depression continues for a long n
me. He says: ~
Il have spent about five years in per-
ecting the present organization and / p
ave il at a high state of efficiency. 1t Il
-ould be folly and a short-sighted policy
l disrupted the organization now. The :.
len would not only suffer but would r
cater, and l would have my work all D
yer again. They helped me out in good b
mes, and it is only just and economical b
)r me to use sane methods at present | y
Ie are not making anything at present, :
ut things are going to boom some day, h
nd 1 want TO be prepared p
Brokers say that money is coming in oil
'om their customers steadily, and that q
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