The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1919-05-30
v. R. &E. MAY
SOON ASKFOR
MORE MONEY
Two-Cent Transfer Charge Alb
SOIuteIy Inadequate, Wall Of
ficiaS of Railway Company.
By BILL PRICE.

BY BILL PRICE.
President Ham and Milton E. Allies
chairman Of the board of directors OF
the Washington Railway and Electric
Company, both declared today that
the 2-cent transfer charge ordered by
the Public Utilities Commission will
be wholly inadequate to give the nec-
essaFy relief to the company. and will
Immensely retard its efforts to i'm
prove service and do the maintenance
work deferred from war days.
The decision is very discourasinR, IS
declared Mr.. Ham, and ii is not i'm
probable that we will soon have to go
before the commission again and urge
further relief. / have no hesitation
In predicting that the use of transfers
VIII tall on so greatly that the total
increase in revenues to the company
viii not amount to $150,0O0 yearly.
whereas the commission estimates
that we will get about 100000 The
worst feature is that the commission
absolutely fails to allow US sufficient
money for a depreciation fund, which
the public utilities law especially de-
clares shall be provided for. We are
allowed nothing for maintenance, and
we are far behind in this work The
whole truth is that the commission
mas not given US enough to live on
Mr.. Allies was OF the same opinion
and did not see how the company
viii avoid another plea to the COM
mission for relief. "Of course we will
try out the 2-cent transfer order and
note the results" said Mr.. Allies, but
ali the authorities of the road were
-
this amount would yield so little
money that the road will be contin-
uously hampered in its efforts to i'm
prove service, roadbed and rolling
stock. The matter will have to be
given serious consideration"
Fight On Valuation.
The tentative valution of $4,000
600 on the properties of the company.
found by the commission, will mean
a huge legal fight in the courts. In
granting the 2-cent charge the COM
mission estimated that this would
give the company net revenue above
its operating expenses OF 100000 a
year. or s per cent return on a val
uation OF SIS, 900 900. The bonded
debt OF the company is alone about
$4,000. 600. or $4,000, 0e0 above the
valuation. which may be increased
when the formal decision is rendered.
The bulk OF it bears 4 per cent. but
a good part pays 5 per cent. Interest
on the bonded debt alone will amount
to something like $775,00O a year.
leaving S125.O0o for distribution
among stockholders. II the com
p3ny had no other revenues than its
own receipts this would mean that
very little would be paid in dividends
even on preferred stock. Through
its ownership of the Potomac Elec-
trio Power Company the company
will get snug dividends each year
which it will, in turn, distribute to
Washington Railway and Electric
stockholders.
The amount OF the p. Z. p dividend
each year will depend upon the final
valuation that is reached as to that
company. The electric light company
is the financial bulwark upon which
the W. r. and Z. must lean in the
future IL preferred stock dividends
are to be paid right along.
Company Own Valuation.
The vast difference between the w.
r and e. claims OF fits own valuation
and the tentative figures reached by
the commission will have to be passed
upon by the courts. Experts Of the
company testified before the commits
sion that the reproduction value OF
the properties July ]. 1916, was
about $4,000 900. They now claim
that the values have hugely increased
since that time. and If the properties
had to be reproduced today the cost
would be $50, OO0, 900. The whole diff |
ference is a matter OF viewpoint and |
IF the basis upon which each side /
proceeds to get its valuation.
The higher the valuation finally /
coached through the courts or other |
wise the larger the total returns the /
public must pay for the service it 4
gets, and consequently greater in 4
crease in money available for divi- /
bends, with better credits for borrow
ing money and financial transactions |
generally.
The Utilities Commission will make 4
a formal decision on valuations in the /
aeXt few weeks. II concluded. how
cver. TO tentatively agree now as a
warning TO the company that il must /
use every possible effort to reduce
expenses and live within the 5000 900
a year net revenue, to be allowed.
Cannot Shed Weak Lines.
The decision OF the commission on
Ehe fare question is significant in
- NOSS hON recognize the con-
tention OF the w. r. and T.. that the
city and Suburban, Georgetown. and
Tenleytown and BIsdensburg lienes
Fare separate and distinct The COM
omission declares them part Of the
whole system and serves notice that
hereafter they will be so regarded
even TO the point, il necessary. of le-
gal action. These alleged unproft-
ssble lines must be carried by the
company just the same as any Of the
Zines that have been merged with the
organization.