Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-10-24

| of the people of Philadelphia. prompt de-
| cision on their part is demanded by the
| public.
The program provides, among other things,
! that the Union Traction Company will be re-
lied upon to aid in securing only such funds
| as will be required for the normal extension
| of the existing system, which will be greatly
lessened by the establishment of the new
| hlgh-speed lines.
The par value of the Union Traction stock
Is $50 per share, of which amount only $3.50
has actually been paid in. Therefore, there
remains an obligation on each stockholder
to pay the remainder; namely, $3.50 per
share, when and as called for by the board
of directors. Each stockholder is personally
liable for and bound to make such payments
under the laws of the State of Pennsylvania.
1t has been stated that the normal require
ments for the extension of the existing SUR
face system will amount to about $1,000 per
year If this be correct then the Union Trac-
tion Company stockholders would only have
to invest or turn back into the property an
nually for the time being 100000, or an
amount equal to about one-half of their
annual rental of $1,sOO,OoO upon which money
80 invested or turned back into the property
they would be allowed interest at the rate
Of per cent. in addition to their present
dividends.
The Union Traction Stakeholder
In other words, 1t would simply mean that
each Union Traction stockholder would re-
invest at per cent. one-half the dividend
which he receives.
The city now is in shape to proceed with
its part under the terms Of the Program"
The amount of money involved in construct
ing the first mentioned lines is s45, 100000
upon which to secure this money the city's
annually increasing borrowing capacity and
the added borrowing capacity provided by
the Personal Property Tax Act in the amount
of s39,OoO OOo plus the annual increase thereof
will be available
The pending Constitutional amendment will
still further increase the citys borrowing
capacity by about $50, 100000. 1t provides for
the payment of interest accruing during the
constructive period out of loan funds, instead
Of out OF current revenue, and permits the
city to issue 50-year bonds instead of 30-year
bonds, thus cutting down the annual sink
ing fund requirements from 2h per cent. to
l per cent. Several other important features
are also included. This amendment will be
acted upon by the Legislature at the forth
coming session and finally by the people In
the general election in November 1915.
The City's Part
The citys part in the undertaking as out
lined only involves the raising of S45,5S2000
during a period of four years 0ittle of this
money will be required during the first year,
The maximum total ultimate annual charge
thereon (sinking fund payments included)
would be 6k per cent. on the cost, If the Con-
stitional amendment to fail of adop-
ton This total annual charge, however will
be reduced by the adoption of the Constitu-
tional amendment enabling the city to issue
50-year bonds instead of 30-year bonds, to
an average of per cent. of the cost. Taking
the basis of 6I4 per cent. per annum, the
total maximum possible fixed charge, includS
ing sinking fund payments, required to dis
charge the entire indebtedness representing
the total cost of the lines within the term
of the bond issue, would be s3,0335OO per
year, and 1t is practically certain that the
average fixed charge will be reduced to
s2,295,00 per year under the new sinking fund
requirements prescribed by the Constitutional
amendment. In any event this annual fixed
charge will be offset by the following items:
% The net earnings produced by the
operation of the facilities, in excess of rea-
sonable payments allowed the operator.
(2) By the increase in tax collections re-
suting from increase of taxable valuation of
real estate, produced by the construction and
ably s1,OOO,OOO per annum and upwards.
C3) BY the value of time saved the travel
ing public in Philadelphia. which, on a
basis of 10 cents per hour, would amount to
upwards of s1,s39,OOO per annum.
"a BY the elimination OF the exchange |
ticket charge, which is now imposed upon the |
public, amounting to upwards of 100000 per |
annum.
(O BY the l mill tax on personal property |
formerly collected by the State and sur |
rendered by the State under recent legisla- |
tion to the city as a practical subsidy in aid |
of transit development, nearly $57O,O 900 per |
annum.
90 By the operation OF the sinking fund in |
discharging the total cost of the lines within !
the terms OF the bond issue, to the end that |
Philadelphia will thus ultimately be In pos
session OF these lines free of debt as a great !
income producing municipal asset.
% BY the many broad advantages which !
will accrue to the city, travelling public. prop
erty owners and the people in general re-
sultant from the establishment of an ade-
quats and efficient transportation system.
Return to City
Leaving out OF consideration the income
produced and secured TO the city by the
operation of the municipal lines, we shall
thus have indirect but tangible and perma-
nent return to the city and to the citizens.
totaIlng upwards OF s4,3O9OOO per annum,
10 offset an annual fixed charge Of only
81 295, 900, which includes payment of the
total cost OF construction during the term Of
the municipal bond issue. This annual
charge will disappear with the extinsuish-