Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-08-20

CRY MAY GET NOTHING For GUAR
ANTEE1NG DIVIDENDS
The way Is thus opened for an indefinite
postponement of the construction or the sub
way delivery loop Broad street subway
2 and OF all of the other high-speed lines EN-
bodied In the TAYLOR plan except the Frank
ford elevated. without preiudicinC the com
peny stability to pay per cent cash dtv
bends, In addition to the per cent divident
which accumulates. and without preiud Gins
the company's exchange ticket revenue
which Is made certain under the terms o.
the Smith lease until the delivery loop and
the first section of tho Broad street sub
way are placed In operation.
The Smith lease provides that after the
delivery loop and a section OF the Broad
street subway are placed IN operation the
fare requirements shall then be determined
by the commission.
The fare requirements under the Smith
lease are the company's per cent cuuu-
latire dividend and certain other specified
Items which have TO be paid. and which can.
not be paid until after the company's cumu-
ative dividend is paid.
FIRST LEASE GAVE PER CENT
The Taylor lease guaranteed to the COM
pany only per cent cumulative divi-
dend upon its 100000. 900 Of capital stock
and provided that the remaining net income
divided--10 per cent TO the company and
% per cent to the city.
Under the Smith"lease the profits Of the
combined system are tc be divided $3.50 be-
tween city and company.
Thus the company gains through the
Smith lease definite guarantee for It's
stock OF an additional per cent per annum
cumulative). at least 100000 year. for n
period OF forty yenrs, or $4,000, 900 more
IN tfx.lt 49,, a.
10 accept as just under the terms of the
Taylor lease; also 40 per cent OF the ulti-
mate profits.
GAINS ANOTHER s4.300O 600 .
Tho Smith lease authorizes the r. T. r,
Company to distribute to its stockholders,
after Ave years, the then remaining surplus
of the company accumulated before the
date upon which the Smith lease becomes
effective, in consideration of its canceling
the back dividends accumulated under tho
terms of the 1907 contract up to the date
when the Smith lease becomes effective.
The amqupta OF that surplus which the
company ~ thus authorized to distribute to
It's stockholders was on June 30. 1917,
e4;345.9OO.
Under the Taylor lease that surplus was
to be retained as working capital and to ul-
timately become the property of the city,
and the company agreed to waive the afore-
contract without any such payment being
made to IT,
100000 YEARLY FOR TRANSFERS
The Smith lease stlpu!ates that the r. T.
r. Company shall be authorized to continue
the exchange-ticlet charge until after the
delivery loop and the first SECTION of the
Broad street subway are placed In opera
tion, after which time the commission NAV
abolish or modify the exchange tickets or
increase the fares charged By the COM
pany to the extent necessary to meet the
fare requirements under the Smith lease
Assuming that the delivery looI and the
first section OF the Broad street subway are
not placed in operation for four years, the
penalty thus put upon the car riders during
that short period will be $3.GOO,OoO
Under the Taylor lease the company
agreed to abolish the exchange tickets m-
mediately and TO substitute free transfers
for the same.
EARIIER VIEWS CITED
The provisions OF the Smith lease require
that upon the initial operation of the dc.
livery loop under Locust, Eighth and Arch
streets. and portion of the Broad street
subway the carfares shall be sufficient to
provide for the payment Of per cent divi-
dends on the Z. T. Y. Companys stock. and
after the first year Of operation. IN addition
thereto. such amounts as are required to
charges Iother than those charged TO capl.
tai during the constructive ncT.odl on al
bonds then issued by the city for transit
development.
have stated to the public time ana
again that a fiye-cent fare with free trans
fers. viii not yield sufficient revenue to
psy a reasonable return on the T. H. II.
Companys capital, plus the flIl amount
of the cItys interest and sinking fund
charges
have made this statement at scores OF
mass meetings held throughout the citv
the newspapers. through the an
nual reports of the Department of CITY
Transit. through special reports made to
City Councils from time to time. also In a
letter addressed to the citizens under date
pf April lG and in an address made before
} committee OF City Councils on May 49,
both Of which describe the terms, effect
Ind advantages of the Taylor lease L haya
eoples Of these. printed In pamphlet form
which are available To citizens who ARE
Iufacientiy interested to ask me for them
HOW 1T WOULD HAVE WORKED
1 have clearly pointed out that. under
Donditions and prospects prevalent early
IN 1917 the city's yearly deficits would
nave ranged as follows in the carrying out
n the Taylor plans under the Taylor lea Sc
In 1892, s1,699,7 ,750, Increasing until 1924
when the amount thereof viii be $s,23475O'
hen decreasing gradually until 1884. when
he corner would be turned and thu cItv
would begin to earn an increasing annual
,roht in excess OF its full annual intorest
Ind sinking fund charges on bonds issusd
or transit development.
Tho table which published showed that
hose annual deficits would. during the
,eriod 1S1S-Is33. fourteen years amount 10
17,72s.250. or an average of sI,266.sO4 a
ear. f,'i- 50 r-A
CITY TO CARRY BURDEN
1t was the dehnite understanding Of tbs
ltixens Of Philadelphia when they voted
Or the construction of the. high-speed lines
In the Taylor plan OF transit de-
for the city that these ineyitable
puntetpai dencits during the early years OF
pegetien Of the eity's high-speed system
&ould not Be saddlsd upon the car riders. |
NJ nat they should be assumed BY the city |
|nd - o9Det by the increase In tax returns |
r11fant from. not an Increased tax rate.
~ from the abnormal Increases In as |
@9 <olQ4pons Of such taxable property
~ 20ptlx hazpA0ted by the constsuc. |
nnrHona1 nr4nSrfs4