The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-12-16
KAHN TO WRITE
TRACTION REPORT
Vital Questions Of New York
Utilities Corporations VIII
Be Discussed.
MARKET VALUES DECLINE
Municipal Ownership Taken
Up as Alternative of Private
Difficulties.


Sisson, vice-president Of the Guaranty
Trust Company. 1t was learned yester-
day, have been selected to write the
report on the vital questions confront
ing public utility corporations which
is to be made by the special commit
tee appointed by the Merchants As
ISOLATION.
The news OF this action by the com
mittee, which is composed OF private
and investment bankers scientific pub
lie utility engineers and merchants, in
the broad sense of the term. coupled
with the recent statement by Travis
II. Whitney, member of the Public
Service Commission, to the effect that
mono Of the local traction companies,
with conditions unchanged, could earn
their fixed charges in the coming year,
drew the attention Of investment
bankers to an analysis Of the local
traction situation.
Their attention was stimulated by
the decline in market value Of the
stocks OF the two important COM
panies listed on the New York stock
Exchange TO n point where the pre-
ferred stock Of the Interborough Con-
solidatcd Corporation was approx
mately so per cent. below the high of
the year and where Brooklyn Rapid
Transit and marlborough Consolidated
common were approximately 33 Ia per
cent, below the high of the year. In
terest was not lessened by the cir
cular issued on December by C. H.
Nenncr & Co. in which IT. was as
s.ff
ton OF the Interborough Rapid Tran
sit Company Is disclosed by careful
analysis of the annual report" and by
tho reply thereto issued at tho close
Of last week by Theodore Shonts, pres
idont Of the lnterborough company
Municipal Ownership Discussed.
The members of the committee APP
pointed by the Merchants Association
feel that the local companies are con-
fronted by grave situation and they
are considering the proposition
whether or not municipal ownership
would not be better than the alterna-
tive which might befall the companies
concerned with the dual operation of
New York city subways
Statisticians are at work on an an
alysis of the latest earnings issued by
tho marlborough and il is understood
that the committee will not report I'M
til this ANALYSIS has been compile ted.
So far as the analysis has gone IL
reveals this situation. 1t takes divi-
bends Of 9 per cent a year on Inter
borough Rapid Transit Company stock
to meet the interest on s67,s25, 900 In
tcrborouEh-Metro Az per cent.
bonds, and tho surplus after charges
Of the operating company for the first
quarter OF the fiscal year, which will
end June 30, 1919, was at the annual
rate of 81 30 a share. In other words
the earnings werI considerably be-
low tho interest requirements on In
terborough- Metropolitan bonds.
"The Tape Never Lies"
Nevertheless the semi-annual inter
est payment on these bonds was made
on October and half the required
amount to be paid on April has been
placed already in the marlborough
Consolidated treasury through the reg
ular quarterly dividend OF pa per
cent. recently declared by the oper-
ating company. The next marlborough
Rapid Transit dividend is due in
March. Whether it will be declared at
the fun rate through a further di-
minution OF the company's surplus is
n question OF uncertainty in the opin-
ion OF statistcians, who are unwilling
TO make a forecast at this time.
The earnings OF the PETERBOROUGH
Rapid Transit Company, statistlcians
figure from the latest statement. were
approximately 80 cents a share In the
first quarter of the current fiscal year
and the dividend declaration was $3.50
a share. To pay this dividend the d.
reCtors, II is declared, drew on surplus
20 the extent Of S2.17 q share, or q
gross amount OF more than 100000
The surplus at the beginning OF the
fiscal year was $lS.662, or, and now il
must be, statisticians say. somewhat
below the S1S,OO000O mark.
It is not possible for accountants
outside of the company's offices. TO de-
termine how much OF this surplus is a
| liquid amount, available for distribu-
ton in the form Of dividends. but II is
admitted that further inroads on sur
plus must be made in order TO provide
the funds necessary to meet the In
terborough Metropolitan interest.
THE tape" a we'll known Wall
Street aphorism says. never lies" The
tape gives market value OF around
Sc u share for Interborough Consoh-
dated Corporation common. around $95
a share for the preferred and approx
imately S460 n $1,000 bond for the In
terborough Metropolitan AIS. These
compare with a high in 1918 OF 9h,
| 47l2 and S5sG25 rcspoc' i"ely.
d.. ,nE Into Surplus.
The directors OF the Interborough
Rapid Transit Company, in adopting
! the policy OF dipping into surplus in
order TO pay sufficient dividends tC
meet bond interest, acted on the rec.
| ommendation OF the Companys OH,
Gals, who expressed the opinion thai
the peak Of operating costs had beer
passed and that November and Decem.
her would show relatively better
surplus after operatiu. company
charges than the s2OO,14I shown II
the four months ended October 81.
Barring q turn for the worse II
! traffic operation the directors express
the hope that the 10 per cent. dividend
on the operating company's stock car
be maintained in view Of the fact TIM
current deficits in the amount earneC
for tho company's preferential mus
be paid back. with interest, under tn,
terms of the dual subway contrac
with the city.