The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1915-11-03
BANKERS BLAME
| UTILITIES BOARD
Cause for Business Stagnation,
Charge Of District
Financiers.
MENACE TO CITY GROWTH
Washington Financial Leader in State
ment to Herald Outlines Local
Situation.
MENACE TO CITY GROWTH
By JOSEPH p. AMIN.


Information in domestic financial
Public Utilities Commission is hostile
to District public service corporations
has resulted In a condition approach
Ing stagnation because OF the in
creased rates resulting from this in
formation.
This is the situation which is being
generally discussed in local financial
circles. Representatives OF local
street railway companies declare that
necessary extensions of lines and other
construction work cannot be project
ed until the hostile attitude of the
Public Utilities Commission has been
changed. New York fnanciers, they
declare, will not lend money at ordi-
nary rates on properties in danger of
constant attack from official sources.
A continuation Of this policy. II is
pointed out, will restrict the utility
systems OF the District and impede the
development of the city.
In connection with the attitude of
the commission. a local financial lead
er. identified with the Districts de-
velopment for many years. yesterday
made the following statement TO The
Herald:
THE Public Utilities Commission has
taken the position that until the COM
tons additional capitalization should he
confined TO the lowest amount possible.
without embarrassing the utilities in the
proper performance Of their functions.
I'm accordance with this policy. they
approved the issue OF x353,ooo Washington
Railway and Electric Company per
cent debenture bonds and rejected the
issue OF s34l, 600. They also authorized
the issue of 1880 similar debenture
bonds OF the Potomac Electric Power
Company and rejected S4l5.Soo.
The commission did not raise any
question that the amounts asked for
were to provide funds for construction
work. but simply took the position that
until the valuation and Investigations
they were conducting were completed
the issues asked for could not be made.
Under such conditions II Is natural
that the utilities have confined their eN-
penditures for extensions and better
unents to the lowest possible amount.
where's II the commission had adopted
a more liberal policy no doubt construc-
ton work would have progressed much
more rapidly. Such 4 policy. If continued
by the commission, will mean that the
TRANSFORMATION and other utility systems
In Washington will be restricted IN their
efforts toward expansion and the devel-
opment Of the city will be held back.
The constant attacks OF the commits
sion against the public utilities, including
their demand for municipal ownership
and for the separation OF the POTOMAC
Electric Power Company from the WASH
Ington Railway and Electric Company.
has been given wide publicity throughout
the country and makes 1t all the harder
for the local utilities to secure the imam
ciaI backing necessary to 30 forward and
the companies are thereby compelled to
nav higher prices for their borrowed cap |
ital than would otherwise be necessary. |
The public eventually pays the BILL and II
would. therefore seem wise that instead
of exertIng themselves to injure the imam |
cial standing and credit Of the local
utilities their efforts might better be de- |
voted to Il constructive policy that would |
make II possible for these companies to |
go forward in a way commensurate with !
the demands of Washington as grow |
ing city. Regulation should not mean |
The following summary Of the financial
growth of the Washington Railway and
Electric Company indicates the stability
which a local public utility has attained
and which has failed to impress the
Public Utilities Commission sufficiently
to cause il to permit the further extern
sion which the growth OF the city de-
mands:
Inc funded debt of the Washington
Railway and Electric Company on De-
cember 81. 1914, was IS, On, $50; December
81, 1908. was salt ,5S.
Increase In six years, S2,1A.s0I.
During this period OF time the COM
pany has set aside for maintenance and
nearly double this amount,
or, to be exact, s3,s45. +Os.
The gross earnings from operations
from 1908 to 1914 increased S.S2T.s62. Net
income increased only $4,000, showing
of s1.OlO.s62, representing ex-
penditures on the public service, while
only s317. 900 could accrue to the benefit
of the IS, 900 bonds and sl5,0oocoo Of
stock.
The SIS 600 increase in gross receipts
also increased the company's tax to the
District $1,000. on the basis of 4 per cent
on gross earnings.
In the face of such A showing, with an
Increase of per cent in the interest pay
ments on common stock in the past
three years. Just the haunting specter Of
an inexpert utilities body obstructs de-
veIopment both OF the utility and the
community 1t serves.