Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-08-08
SAYS SCENT ROADS
CAN'T FLOAT LOANS
Joseph X. Choate Points to Ex-
orbitant Rates Demanded for
Money for Maintenance.
NOTES SELLING AT 61h%
Host Prosperous Declared to De Unabis
to Finance Needs ut Present
Rate of Ears.

Hearings on the application OF a large
number of street railway companies OF
New York State for higher fares will
begin tomorrow before the Public Ser
vice Commission of the Second District.
ut Albany. Joseph K Choate. Chairman
OF the Committee On Ways and Means
Of Obtaining Additional Revenue for
the Electric Railways OF New York
State. issued q statement yesterday in
which no said II was imperative that
tho transit lines get more revenue, be-
cause with present prospects they were
unable to obtain money for mainte-
name and extension of service. Mr..
Choate indicated that the electric rail-
ways Of other States had their eyes on
tho outcome Of tho 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. land on tho result
that business in the United Statos.
Street railway financing is becoming an
increasingly dificult problem. Indeed.
the situation Ia 50 serious that tho
ability OF many companies In this State
to keep going is threatened.
The Consolidated Power Company
OF Baltimore is now advertising an
issue OF short-term guaranteed gold
notes to be sold at 97h and interest
This means that they have to pay moro
than 81 per cent for this money. The
international Traction Company Of
Buffalo has Just issued some three-year
secured gold notes, the money thus OBJ
tained costing moro than 6h per cent
Now. these arc bis. responsible COM
panies.
There arc very few electric railway
companies upstate in New York that
could get money at even IL per cent 60
ong as the present rate OF operating
expense and a fiTed five-cent fare 60 on.
Continuance OF such conditions would
he disastrous. And It is the sam mt eine-
where. I have just received the details
OF the unsuccessful effort the other day
by the West End Street Railway Com
pany. which owns all the surface. lines
IN Greater Boston-escept a few extern
sions OF other compantes-to sell
$1.6sl.ooo OF their bonds at 6 per cent
They were forced to get tho authority
OF tho Massachusetts, Commission to
pay 7 per cent. The West End Conn
pany's securities have always stood
very high. but now It's bonds. despite
guaranteed income under tho lease to
the Boston Elevated are no longer at
tractive TO investors at s per cent.
The lessons Of this oninous fact
are important in New York State. Tho
credit OF electric transportation COM
panies on fve-cent fares is waning In
face of rising costs. The fve-cent faro,
which has been a fetch OF transporta-
ton and regarded almost as a consti-
tutional right. has been a nxed unit.
In days OF pioneer street railway de-
velopr,ent. with light cars. cheap road
bed. inexpensive power plants. etc, IL
served. But 1t no longer meets tho
bills. 1t takes nearly twice as many
fares to pay the supply bills as 1t did
only three years ago, and dividends
are dwindlinE or disappearing or are
already gone. That means less and less
margin OF safety for the bonds, and in
OaafnrH nrn chxr - @r>
except Mt excessive rates. and the in
dustry Is threatened.
Twelve Massachusetts, companies
have succeeded In getting Increased
faros. and several moro Implications arc
now pending. One company after an
other Is being forced to ask six-csnt
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 problem.
leaving 1t for tho commission to decide.
Several six-cent fares. authorized as
an eSperimnt. have proved Inadequate.
and now 1t has been suggested that
New England turn to the zone system.
80 common in Europe.
ono thing is certain-the a~ntiouated
nxed hve-cent fare system viii no
longer serve. When investors will take
no further part In a business the SCR
vice must suffer. Despite the growth Of
the cities In both New York and New
England. and tho need for new lines.
street railway building has virtually
ceased"