The Richmond Virginian. (Richmond, Va.) 1910-1920, 1917-08-08
SAYS Scent
ROADS CAN'T
FLOAT LOANS
Joseph X. Choate Points TO Exorbi.
tant Rates Demanded for Money
for Maintenance.
NOTES SELLING AT e1.2 Per Cent.
Most Prosperous Declared to be Cn-
able to Finance Needs at Present
Rate of Fare.

. Hearings on the application OF a
large number of street railway COM
panies of New York state for higher
fares will begin tomorrow before the
public service commission OF the Sec
ond district, at Albany. Poseph K.
Choate. chairman of the committee
on ways and means Of obtaining add
ditional revenue for the electric rail-
ways Of New York state. issued a
statement yesterday in which he said
It was imperative that the transit lines
get more revenue. because with pres
ent prospects they were unable to OBJ
tain money for maintenance and ex-
tension OF service Mr. Choate indi-
Gated that the electric railways OF
other states had their eyes on the
outcome of the movement by the New
York state companies
Hearings on the most important
electric railway rate case ever brought
up in America Will begin in Albany on
Tuesday" he said. and on the result
depends in great measure the future
of that business in the United States.
Street railway financing is booming an
Increasingly difficult problem Indeed,
the situation is so serious that the
ability OF many companies In this state
TO keep going is threatened
The Consolidated Power company
Of Baltimore is now advertising an is
sue of short-term guaranteed gold
notes to be sold at ~ IL and inter
est. This means that they have TO paw
more than Ia per cent for this
money The International Traction
company of Buffalo has 'ust issued
some three-year secured gold notes.
the money thus obtained costing more
than Ia per cent. Now these are big
responsible companies.
way companies upstate in New York
that could get money at even y per
cent, so long as the present rate Of
operating expense and fixed fve-cert
fare go on. Continuance OF such con-
ditions would be disastrous And II IL
the same elsewhere. I have Just re-
cetved the details OF the ursuccessfuI
EFFORT the other day by the West End
Street Railway company. which owns
all the surface lines in Greater Boston
except a few extensions Of other
npanies--to sell 81 55i 900 OF their
bonds AZ per cent. TheS were roIccd
TO get the authority OF the Massa-
chusetts commission 70 paw per cent.
The West End company's securities
have always stood very high. but now
its bonds, despite its guaranteed in
come under the lease to the Boston
investors AZ per cen-
The lessons OF this ona.nous fact
are important in New York state. The
credit Of electric transportation COM
panies on fve-cent fares is waning in
face of rising costs The ive-cent fare.
which has been a fetch OF transpor-
tation and regarded almost as con-
stttutional right. has been a Axed unit
In days OF pioneer street railway de-
velopment, with light cars. cheap
roadbed, inexpensive power plants,
etc. it served But i. no longer meets
~ al
fares to pay the supply bills as it did
only three years ago. and dividends
are dwindling or disappearing or are
already gone That means less and
less margin or safety for the bonds.
and investors are shy Of even lending
money except at excessive rates. and
the industry is threatened
Twelve Massachusetts, ompanies
have succeeded in getting increased
fares and several more applications
are now pending One company after
another is being forced to ask sx-cent
fares or more, One company, the Holy
oke Street Railway company, came be-
fore the commission only last week
and frankly gave up the Whole prob
lem. leaving it for the commission to
decide
Several six-cent fares. authorized
as an experiment. have proved made
quate, and now it has been suggest
ed that New England turn to the zone
system, so common in Europe
'One thing is certain-the anti
uusted fixed fve-cent fare system will
no longer serve, When investors will
take no further part in business the
service must suffer. Despite the growth
OF the cities in both New York and
New England and the need for new
lines. street railway building has
virtually ceased"