Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-09-06

men, Oh o a, vonr request ex-
Dear Sh-We ""' ~ .....-,,.
smined the proposed ordinance conpIiS'
contract with the Philadelphia
ms r~.,si, Comnany for the mainte-
nAp'u "a oneration of unified transit ia
MAJ. IN ,be city of Philadelphia, which
ehues .,,a on,hodios an arrangement
We unoers'anu -. ,,o,o,,,,,on. h,, ,,our
resulting from recent negotiations oy your
s.rartmept and its legal advisers with
ory
that company .,o, yo,, aos,ro
1t is our un9e s.a'ns ,d s,,gssestionS concern
Ing THIS PROPOSED con.rho'' ,,h e po'l con,anvs ny
and In comparison witm io,s e mon pn,hicb
y offer OF DeceIhu usasentsd tn vo,i q memo
latter oner we prnSnr date Of March Q.
randum report u''oei '"'e VI "
1911 .- -..,,,
Z For purposes OF convenience, we WI
refer to the proposed ord,nance, oa,eu soi
August II, 1871, as the rpresent pnooo'
posal" and the offer of December 20
1915, as the lSio propose, At.
In general, we would state that IN tne
present proposal there have been secured
Tor the city three Fundamental and con-
trolling advantages which eliminate the
principal objections to the 1915 proposal
Is follows:
e,y's investment over dividends on COM
nany's stock.
pAS Sscond Avoidance of city guarantee of
slyiSends on company's stock
itxr'r at
Ihiru. Es.aoiisi.,,,, a s,o, Iasis ~ assured
ment on ilrill niidncIa. na oaS,s tho oit, honds
income; theIeoy ,itt 5 thus erahl;ng
from the debt unit ana mus erao'i"s
further transit or port development
COMPARISON OF PROPOSALS
upder tne present proTosai ,n', ,rere ,tar..t
20 paid mo une Gi.y m n,,,,,,io i've on
@ na a,.,,,s snhS Snds issmad for transit facil
sins ne hsyor. on,, diwidends are Maid to the
sN1nsnvs ues He,UIe stnynx sny nxbo,Sers arc pA
IipSeg sbs ieis nronosal there were to
paw pcant ~ 1i,ISonSa on tho nresent s3O
Sen oon NM 81 stocH before the nayment OF
s.nvs, syvv,vvy, ond s,ni.ing f,,nd charges on the
. ih.v.e na aH Iss,,n1S fnr trensit fac,iities
y ny s,,ob oSnus na ,,r,onts ~ comnanv dividends
Gnr. nr 't9h ~ ha pcnviativa and pirtyaiiv guar
r.ssS a. ~, De nrn,,ision narnitting The COM
anteed py a provision pernl.tlhE tIe oo',,s ns
eeuv,ehsH -. tbat Us So,'as,tnn ~ ,Uhatbar
.,a c,.u;s NS.d t nhor9es or the comnanv's
'Sards e ha aeu na,d ars. ,s one of v;tpI i'm.
rnrtanca u1us ss oe rn bnve estima,ed that for
yS'%f, r.. frs, Ss,o.n waars' onnration of the
.n1eaa .T ,,stere yy,th syotcant fares and
Srn. tronsSers n,;th nor cent annual
Sivdend on comnanv's stock, there will
aetT to,,I On dsaoit ~ fron, sso sss ooo 70
IA a,s ooo as ner estimates ana r. in
s,r nrevio,,s a renort Dnrinp this period
The the largest s deaeit in any one @ year ear is esti-
1,eu y shu,id a, 5oin ntsS t ~ ibis wav
rrdar tHa nrasant nronnae, The burden
~ nroot % ,s rp1oc.d on NJ con,nanv instead
Of t on the city i in % other words. the com.
nanw hos 20 nnrowa tn case hefore the
pS pnhS},c ps servce w p'oCe Comm,,ssinn what 10 a
f,ic rote ~ d,yidand nn ,ts stool. and
+ whs,her ~ ,s nnudmot;ng nNicientiv the
waSsana. transr.ti ,sine.s in phil
ppSsinhto pSSsSehhtser transportation ous'neSs III TIM
TIpTar tbe nrosan, ,roroso, tho com-
pany's dividends in the '0 series Of subtrac-
sity's fixed charges; 1t is provided that
somss efrestive s he t aate .he Gpn'fa di,dend
rats shall not excaed r,ar cant c,,m,,ia-
tioncs e, ar.hoSen curing me period OF con. on
oneration ~ tha Srst sao,ion 30 tbn RroaS
street snbwav .nS deIivsru Loon nar
cent per wear is the ma simum dividend
II shouiS he notsd that tbesa r.tes
are maYim,,r, ,,n'its ana ,hat tbera is
the possibility. due 10 Conditions of the
business thai these NJ maxim,,m dividends
city specifcaIiv concedes the fairness
Of per cent dividenI r,te ~" and arrees
to Join The comnanw in anneaiine fe the
Public Service Tnwy,niss;pp 20 o-Jsr a
just and reasonabi fara ;f Uar cant 10
NOT maid The mubIi idse s .s,,r u psr &c th;s u;
procedure before the commission that hat
divdend dsVnaoiemess or tne Gompanys
upon hv thia a,,T IN, ue JuuiSiauy pdsssu
after fhoraug, nn,d. uuoie oouy
the facts; with the o"on further Assurance r M
Mt .t.... r..
is concerned cannot xasad as as na .ne a,,, c,y
unless nrnTnoaJ h' sAeeeu PR ass, Vemt
nfty diyision betnsar n;,, anS oo,,,,,ar,,
Of further surni's az rn;yys wiy anu ,rSis ,rSipaS an
peais TO us fran, ,ha stnrdro,rt ~.
public as battar .me stanSp9lne pi, oi tne
this dividend rate tham ei, ", ~ ,,,,nis
mum rate ~ no 'au nn. nanns 'ue ne h nn,e
proposal witbort i,'J,nso1 90 d pe .n;.n,yeo
determination 'u'."' anu '''e
DIVIDEND RATE
It should he understood that tba d;v;-
dend rate of ner cent ,xed and puar-
anteed BY the 1915 nronosaI vas min
imum rate TO be dsdmcteS Sefnre the city
ing fund cb.rraa VI 10 ii,'srse. & anu ~, ns, sinh
ings were snti,c.rt anu ov wnen en,, 'ne 60 -,
the city's charsa, y pay any pa.s pa ~
deduct 10 ner csnt ~ the an,om1t earraS
In excess ~ ,ts a,'iaemd IL end n,h,nt s,,n,'Id
rive the comnany onnNnimtS .. o',nt
payable 10 tha' citv Therafnr. Whnn
the earnings became sufficient to paw he
addition to its X M auil nt ,ne ,,6 eOmipahy' h IN
ceiving one-nintb ~ tha .rno,nt os tbe
citys revenue. ana this wo,,Id nouoi an
proximately 3 per cant on The comnanY's
in the iafhs iafsr ,,a,r a .otai OF : per cent, y
increase s,ff,cisnaiv ~, "o II, snXuia St,,.
deficits in the eariisr yasys the censnsny,s
10 per cent commissiIon s,o,,Id emI rnspft -,
total dividends to the comnanv Of a.
much as . per cant nar van ani ,us,ard
In such later yee re Pc 'e"i "iuA Aup"aiu
Conseouent,y ,,nar ,.o ,o,e ,.,
when the citv earns its ava ohor iopUar ssn,,,
the transit Z. c;iitiss 's n"eu cnarses lro,i,
receive more than per cents aiiviSends