davidaulloa/AmericanStories huggingface dataset:
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
ELEVEN DEATHS AT MONT ALTO

n. Russell, registrar of vital sta
tistics for this district, has issued
his regular monthly statement show
ing there were total of twenty
Ave deaths in the January period.
and eleven at the Mont Alto sapa-
torium. Registrar Russell reported
that the average death rate in the
district during the past year was
about seventeen a month. The rate
during the last three months of the
year was increased on account Of
influenza
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
VICTORY ENTERTAINMENT

BlaIn, Pa, Feb. 6.--On Saturday
evening the Victory boys and girls of
the Blain vocational school, will give
an entertainment in the town hall.
Beside vocal music two dialogues
will be presented, entitled Taking
Fathers Place" and Booster Club,
of Blackville."
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
GRANGE ENTERTAINMENT

MCChNnlCsHUTg, Fd,, FtU' w
morrow evening f,So o'clock the
following program will be given by
the Middle Spring Grange: Music,
business session, music, recitation by
a Junior member, hymn, How Firm
a Foundations; talk, Theodore
Roosevelt, American" Mrs, j. X.
Stewart; reading. THE Grange
Speaks For Agriculture From 1874
to 1915" Mrs. Walter Lindsay; vo-
cal solo, Miss Eva Wylie; humorous
reading, Mrs. w. 9. Plasterer; open
discussion. Where VIII the Farmer
Be in the Agricultural Reconstruc-
tion?" Fifteen minutes of fun, COM
mittee; closing song.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
MARRIED AT NEW BI,ooMFTETD

Newport, Pa, Feb. 6.-Miss Ethel
NJ. Lowe, of Newport, and John E.
Bupp, son of Mr.. and Mrs E. Dl
Bupp, of Mannsville, were married
at the New Bloomfield Methodist
Episcopal Church parsonage by the
pastor the Rev. Homer C. Knox. Mr..
Bupp is a private in the Medical
Corps OF the United States Army and
is located at Garden City, l. 1.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
GUARANTORs ELECT

New Bloomfield, Pa, Feb. 6-The
guarantors for the 1920 New Bloom
field Chautauqua have reorganized
for the year. Luke Baker was
elected president and II. W. Robin
son, secretary treasurer.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
POPULARITY PsRTx-,.

New Cumberland. Pa, Feb. G.
Inc Inc Girls, Service Corps will hold
popularity party" Friday evening
IN the social room of Trinity United
Brethren Church.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
rALL CAUSES pEArH

Lykens, Pa. Feb. 6.-Henry Smith
son of Mr.. and Mrs. II. Z. Smith. died
yesterday from the effects of a fall
he had some time ago. which affected
his nervous system. He was twenty
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
200 Wounded Soldiers
at Carlisle Army Hospital

Carlisle. Pa, Feb. s.-The United
States Army General Hospital here
is rapidly being filled to capacity by
the arrival of new contingents of
ovrseas wounded. On Tuesday even
ing sixty arrived and yesterday thirty
came in, making close to 200 since
the first of the year. More are eX-
pected soon. Some of the men sent
here have been granted ten-day fur
loughs to visit their homes before
taking up their course of training.
In addition 10 the other changes, the
Red Cross has placed a secretary
here and plans for a building at the
institution.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
PROGRAM FOR LINCOLN DAY

New Cumberland, Pa, Feb. e.
The Senior class of the High School
is arranging a program for Lincoln's
Birthday.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
SOLDIER AGAIN ARRESTED

ChamDerSDurg, Pa, Feb. 3. -
Harry Davis, a former soldier at
Camp Lee. Va, who was arrested
here a few days ago on suspicion of
being a deserter from the army and
who produced his discharge just as
the police were about to place him
in Jail, is again in the tolls of the
law. He is now charged with lar
ceny. Davis is alleged to have
stolen a slicker, shirt, overalls and
some socks from Private Proctor,
another soldier who has been stay
ing at the local soldiers canteen
since his truck was damaged sew
eral weeks ago on its way through
here with a truck train. The stolen
articles were recovered and although
Davis fed the town he was caught
near Greencastle by Chief of Po-
lice Baumgardner, of Greencastle,
and turned over to the local police.
Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-02-06
sUB-LoCAL INSTITUTE

McchanicsDurg, Pa, Feb. b.-PIans
are made for an interesting sub-local
Institute of the public school teach
ers of Upper and Lower Miffiin town
ships to be held in the Heberlig
school house tomorrow, with after
noon and evening session. Among
the speakers are: Grace +. Hem
minger. Mary c. 10y, Frank Smoke,
class drill; Mamie Drawbaugh, Cath
arine Clouse, +. NJ. Oiler. r. W.
Swartz. J. f. Hoover. BERTHE E. Oiler.
Florence Zeigler, Myrl Hoover. Mary
T.. Oiler, Professor w. G.. Rice and
county superintedent, j. Kelso
Green
Evening star., 1919-09-05

Potomac Electric Power Company.
A fair. allowance for legitimate
expenses prior to construction is
proper when cost OF reproduction is
being ascertained and the commits
sion has made such allowances.
while it is necessary, in connec-
ton with estimating cost of repro
duction to conceive of the physical
property of a utility as non-existent
except for the purpose of inventory,
take into consideration the history of
the development of the company when
costs such as these defined in the
above items are to be considered.
"All of the properties of these COM
panies were of slow and gradual de-
velopment. and at the beginning it
was impossible to have conceived the
properties as they exist today. They
have been continuously expanded
from inconsiderable beginnings by
successive boards of directors. and
successive administrative and enEi-
neerinS staffs, and equivalent costs
are allowed for in the reproduction
estimate.
1T is impossible to imagine a con-
dltion existing wherein the District
OF Columbia was utterly without its
present street railway transportation
OF their value elsewhere that the pub
lie would have paid the above-m en-
toned amounts or any other amounts
to some individual or individuals for
conceiving that such system of
transportation was necessary to the
public welfare and the development
OF the District of Columbia. Upon no
other hypothesis could the allowance
or such claims be justified, and any
such assumption is too imaginary and
nimsy TO sustain the proposition that
the public should be chargeable with
paving "A return upon such cost
Inc commission is of the opinion
tfat no allowance should be made for
brokerage and commission beyond
mat already made in connection with
negot1atlng for bond issue, costs of
Investigations, trust deed, printing.
engraving, etc. in connection there
with, as hereinbefore discussed under
the heading REORGANIZATION Ex-
pense.
THE following is quoted from the
Evening star., 1919-09-05

viduals, others to accounts for the
purchase Of designated companies or
properties commissions exhibits So
to 1929.
"a formal proposal that the securi-
ties of these several companies oe
transferred to a holding company
upon the issuance by the latter OF
it's stocks and bonds in payment there:
for was made by Stevens. Crosby and
Lieb to the United States Mortgage
and Trust Company on April 20, 1893
Nelson testimony. page 361O. BY
the terms Of this offer. which was
accepted bykthe trust company ttesti-
mony page $3.50. the latter was to re-
ceive s12.000.0o0 of Az per cent bonds OF
the new company and s2,500,oo0 Of
it's $10.000,o00 of capital stock for
the total amount advanced by the
trust company. viz: $10.695.000 in
cash. The proposal states that If the
offer of Stevens. Crosby and Lieb is
accepted :he trust company will pro-
cure to be advanced to them cash to
the amount required from time to
time to enable them to exercise their
existing options which had been sub
mitted to the trust company for the
purchase of the securities of the sew
eral companies which were to be
transferred to the new traction COM
pany,
Evening star., 1919-09-05

commissions opinion in the case OF
the Potomac Electric Power Company,
where this same subject is discussed:
Without discussing the equity OF
the amount of this claim the commis-
son is of the opinion that bond dis
count constituting payment LOT tne
use of money is in the nature OF an
interest payment; that it is not a
proper capital charge, but rather an
adjustment of the interest rate to the
existing market conditions ana
chargeable to interest account and
not capital" The commission is of
the opinion that brokerage and BOND
discount are matters to be considered
in connection with and to te refte :tet
in, the rate of return allowed, hat
such costs should be made up or
income by the creation of sir e
fund or reserve sufficient to cove g
cost during the lif" of the bonds Il
that therefore such costs should
in equity be considered u part %
cost of reproduction or OF the
value" to be taken as base fon !. {
fixing of rates. The commission 50
decides in this case.
There should be no allowance for
an item of this character in valuations
made for rate-making purposes.
There can apparently be no claim for
it whatever on the historical cost
theory since there is no evidence thdt
anything was paid for these So called
easements. On the reproduction the
ory it would be necessary to estab-
lish that it would cost the respective
sums claimed to secure such rights.
No evidence of that kind has been ad-
duced.
The right to occupy the streets and
highways of the District with their
tracks and other equipment and op-
crate cars thereon is a license or
franchise which the companies pos
sess. They claim that actual occupa-
tion and use of the streets gives them
an easement and gives to this ease
ment a separate and distinct value.
The right to this occupation was
granted by Congress without cost
The exercise of this right cost what
ever may have been paid for the labor
and material expended in the occupa-
ton, together with such other ele-
Evening star., 1919-09-05

ments of cost as attach to it proper
tionately in the process of the general
construction of the property. 1t is
I evident that this right to occupy the
streets and its exercise is one of the
bases upon which the property Of a
utility can be considered in it's en-
tirety as a going concern. 1t sus-
tains the integrity of the investment
and enables the commission to give
a value TO the property as an operat-
ing and going concern.
THE courts and comissions have
almost universally held that ease
ments should be regarded merely as
franchises not to be capitalized for
ratc-making purposes on two
grounds; First. that ii would he un-
Just 10 require the public to pay a
/ return upon property II had given the
utility without cost to use in the
public service, and which derived its
! only value from that use. and, second,
that the value of the easement must
depend IN its final analysis upon its
/ :, Venue producing capacity. TnasmuCh
As he object of a rate-making pro-
cedinG is to determine the amount the
company Is entitled to receive rom
{ the public, and reduce that amount If
unreasonable, the amount could never
be reduced il the revenue producing
power of the easement were to be
capitalized.
1T cannot be urged with any de-
gree OF justice that When the pup
lie has granted a franchise to a utility
for the purpose of rendering service
to the public the utility should have
the right to Immediately turn around
and capitalize the public's generosity.
1t must be remembered that all fran
chises granted to such utilities are
granted subject to the right of The
public to insist that it shall be Serv-
ed at rates which are just and rea-
sonable What there is, either in JUS
tice or reason, which should authorize
Il utility to capitalize against the pub
lice the very means which the public
has granted that II may be justly
, and reasonably served, 1t is Impossible
to understand.
The commission sums up its find
ings in the Washington Railway and
Electric case as follows:
After full consideration of all the
evidence in this case the commission
finds the fair value of the property of
Evening star., 1919-09-05
Records Are Withheld.

The history of the transactions in
rolved in securing the control OF these
several companies and the records of
the holding company the Washing
ton Traction and Electric Company
were withheld from the commissions
accountants during the progress OF
their Investigations into the historical
cost of the property of the respond
ents. The existence of these RECORDS
was not disclosed until the cross-ex-
amina ton of Witness Nelson. account :
ant for the company. on February 70.
N1919, nearly four years after the COM
mission began its Investigations look
ing to the valuation Of his company
property. and practically at the close
of this case.
Upon demand of counsel. the COM
pany submitted to the commission
on February 2S. 1919 testimony, page
3661), certain books and papers re-
lating to the Washington Traction
and Electric Company, which were all
it claimed it could find. These records
consist of d journal and ledger COW
ering the period from July II. 1899
tthree days after the execution of the
mortgage on the Company'S Securl-
tiesl, to June 26, 1902. and two file
cases of letters. deeds, accounts. can
Celled notes for money advanced 10
purchase securities. and other miscel-
laneous papers, which throw consider
able light upon the financial opera
tions of the individuals who secured
control of the above vementioned rail-
way and lighting companies. These
papers revealed the numerous loans
made to these individuals by the
United States Mortgage and Trust
Company of New York upon their
several joint and individual accounts,
and led to requests upon that COM
pany for a copy of all the accounts
on their books relating to the WASH
ington Traction and Electric Com
pany and to these individuals. The IN
formation contained in commissions s
exhibits Sc to 103 was furnished by
the United States Mortgage and Trust
Company.
Evening star., 1919-09-05
organization of the latter company
listed as follows:

IF the above securities. taken at
par. be added to those in schedule
b. which have been stated at cost
or at the highest market price in lieu
of cost, a total of $13,562, Ss2.31 is OBJ
tanned.
Through the operation of plan and
agreement of reorganization or the
Washington Traction and Electric
Company these securities were de-
livered to the new Washington Rail-
way and Electric Company: exceptions
being made whereby the physical
properties represented by the stocks
OF the Metropolitan and Columbia
roads, respectively. were delivered in
lieu of said stocks. In return the
Washington Railway and Electric
Company issued it's own securities to
the amount of s22.999,600. as shown
by Nelson exhibits 1O2 and 103, as fol-
lows:
Nelson Exhibit 102.
Page Common stock .... sSS 500. .O0
Preferred stock ...... S.5ou. .o00.W 90
Common stock ....... G,4l3 100. 90
Nelson Exhibit 1O3.
Page 2-COnsoidated mortgage
bonds ............... 1885,. $50. 90
Page 2-Consoidated mortgage
bonds ............. 400 600. 90
s2s,ss2.s5o. 90
Nelson Exhibit 103.
Page 2-Consolidated mortgage
bonds, part of 81 1892
$4,000 returned by re-
organization commit
"c. 33G, iVO.Ou
Evening star., 1919-09-05

through change in name. and second,
of the Washington Traction and Elec-
trio Company through the acquisition
of the property of the latter by an
exchange of securities. The Washing
ton Traction and Electric Company
was organized for the purpose of &C
quiring and operating the various
properties described in the preceding
historical sketch, the control of which
through stock ownership was ac-
quired prior to 1900 by a group of in
dividualS.
Evening star., 1919-09-05
Result of Failure.

'The foreclosure suit SO often re-
ferred to in the case Of the Washing
ton Traction and Electric Company
was the result of it's failure to pay the
semi-annual interest on it's bonds, due
June 1. 1901. The company met the
first years interest tfrom June J..
1899. to June eod I, 1900, on the first is
ssnr Of o ss of ossss 1s eSTds ca1 s
received from the United States
Mortgage and Trust Company at the
time of the issuance to that company
of that amount of bonds and $780,
900 Of stock. That is. cash to pay
the first years interest on its orig,i-
nal issue of $12, 900, 600 of bonds was OBJ
tanned as part of the proceeds of the sale
of the bonds and stocks themselves.
THE condition of the Washington
Traction and Electric Company for
first year of it's existence) is shown
in the statement of it's controller,
Mr.. William F. Ham, submitted to the
New York Stock Exchange with the
company's application for listing it's
bonds on that exchange tsee commits
sion's exhibit 1O9). From this state
ment Reproduced in table 81 it ap-
pears that after paying all operating
expenses and fixed charges of the sew
eral subordinate companies and al
lowing for income from the securities
owned by il the Washington Traction
and Electric Company was earning
only about s270,000 per year, out Of
which to pay Az per cent interest on
it's outstanding bonds of a par value
Of 13,442, 900. The following table
is quoted from the application to the
New York Stock Exchange tcommis-
sion's exhibit No. 109):
EARNINGS sUBoRDISATE COMPANIES.
Washington Traction sand Electric Company,
year ending August 3D. 1900.
Gross earnings from opera ton :. 81 99f OPT Al
Operating expenses 1.2s1, ,333. "a
Net earnings from operation..... s7O9, ,s94 II
other income. ............... 81. .4s3 81
Cross income. ..................... s771, III 4s
Fixed charges. ................ 5ss. 1876 %
Net income applicable TO Traction
Company S1s3. .O41 2s
Ada interest on securities owned. 90
ep-n M
Evening star., 1919-09-05
Lack of Funds.

"An insight into one of the reasons
for the lack of funds and for failure
to realize on the anticipated large
surplus that was set out in the com :
panys prospectus in the form of a
statement to Bankers fcommis-
sion's exhibit No. 11O) is found in a
study of the statements of the rev
enues, expenses, depreciation charges
and dividends paid by the United
States Electric Lighting Company and
the Potomac Electric Power Com
pany. given in schedules Co and .D'
below: These are taken from the
commissions accounting report in
evidence in the valuation case of the
Potomac Electric Power Company
ttormal case No. 40. Schedule c.
shows that the annual dividends paid
oy the United States Electric Lighting
Company averaged 500 900 from 1890
to 1898 For the fourteen months
81. 1899 during which period the
Washington Traction and Electric
Company gained control of the COM
pany) the dividend was only s16.-
S23 and no further dividends were
PAID During the remaining three
1901 there was charged as deprecia-
! tion for that year $308, ,90s. .26, as
against an average annual deprecia-
tion of $4,000 for the preceding seven
years. In 1902. after the foreclosure
sale Of the Washington Traction and
Electric Company and the formation
OF the present Washington Railway
and Electric Company, the deprecia :
, tion charge dropped to $58,O0O, and,
after being joined by purchase to the
depreciation was charged until 1909
Referring to schedule d. it will be
observed that, beginning with s515. 900
In dividends in 1904, the Potomac
Electric Power Company, which pur-
chased the United States Electric
paid large dividends every year
Treats Lines Separately.
commission treats separately the
Washington Railway and Electric and
the subsidiary companies compos-
ing that system. 1t finds that the total
cost of the property of the parent
body. located in the District, and used
and useful for street railway opera
tions as of June 80. 1914. was $1O,3s5,-
596.27.
The historical cost of the City and
Suburban railway. one of the units of
the system as Of the same date, was
$2.066.543.23.
For she Georgetown and Tenley-
historical cost as of June 80. 1914, was
$220, 0,50762.
For the entire system the commits
sion finds a total value as Of June 80.
1914, of $12.746,256.97, this figure rep
resenting the value of land, right of
way, structures. power plant and sub
station equipment, transmission and
distribution systems, rolling stock,
general equipment and general costs.
Development Costs.
The company's claim for develop
ment of costs. preliminary organiza-
tion expenses and cost of financing
are sharply cut by the commission.
Dealing with these various claims the
report sets forth:
"Respondents claim development
costs as estimated by Almert. as fol-
lows: Washington Railway and Elec-
trio Company. $3,830.920.00; City and
Suburban Railway of Washington,
$242,711.00, and Georgetown and Ten
nallytown Railway Company. $18,-
069.00. These amounts are not derived
by Almert from any actual costs or
deficits of the past, but are derived
on the comparative basis purely. by
Evening star., 1919-09-05

the three responsible companies (ex--
elusive of materials and supplies and
working capitaD. used and useful for
electric railway operations within the
District of Columbia as of uly l, 1914,
to be as follows: ,s
Washington Rwy. and Elee Co. $li .306. .O0O 90
City and Suburban Ewy. of Wash 2,755. 600 90
Georgetown & Tenleytown Ry. Co. 470. 1000 90
Evening star., 1919-09-05
Extracts From Records.

"On February %. 1919. and April /. 1919
counsel for the commissioners stipu-
lated into the record certain extracts
from these and other records, as we'll as
, a complete transcript of the records OF
the United States circuit court OF the
eastern district of Virginia in the case
of the United States Mortgage and
Trust Company VS.. the Washington
Traction and Electric Company. relating
10 the foreclosure of the mortgage of
the latter company and the public sale
Of all its property. These are comprised
in commissions exhibits numbered 1
to Ill.
From the Information contained in
these records it is now possible to give
a fairly complete sketch of the early
financial history of the Washington
Traction and Electric Company and the
values represented by the existing and
outstanding stocks and bonds of its sue
cessor, the Washington Railway and
Electric Company.
'fThe events leading up to the incor-
poration of the Washington Traction
and Electric Company in June, 1899. are
concerned with the operations of Oscar
T. Crosby and Charles A. Lieb. who
first appeared in connection with the
formation of the Potomac Light and
Power Company of Virginia in January,
1896. and its sale later in that year to
also incorporated by Crosby and Lieb in
conjunction with Frederick c. Stevens.
The early transactions of these two
companies are discussed in the commits
sions opinion in formal case No A. in
the matter of the valuation of the Poto-
mac Electric Power Company, decided
May 2, 1917.
Evening star., 1919-09-05
$4,000, 10000

ut thus appears that the Washing
ton Railway and Electric Company is
sued it's securities to the par value
of $22.s9s 900, and received there
fore. property which, by the most
liberal estimate, did not have a mar
ket value exceeding s13,562,SS2
Evening star., 1919-09-05

How Conclusions Reached.
the commission has valued the prop
Continued on Twelfth Page.)