The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-02-01
BRIT. EARNS S1.99
ASHARE ON STOCK
Report Says Lack of Working
Capital Was Chief Cause
of Rcceivcrship.
WAR COSTS ALSO BLAMED
City's Delay in Traction Work
Given as Reason for Part
Of Difficulty.

As result OF the heavy costs OF the
war, which have fallen upon all public
utilities. the earnings of the Brooklyn,
Rapid Transit Company for 1918 were
az the rate of only s1.99 a share, agains,
$3.50 share earned In 1917 The gross
revenue for the year was more than
s5o'ooo.oo0 and the net revenue aggre-
gated about s11.OoO.o0O. After all
'harges' taxes, SC. were allowed for
the surplus available for the capital
stock was but sl.4s3.S16. against more
than sS,000.000 for the preceding year.
Much discussion. some OF II extremely
acrimonious. developed at the annual
meeting OF the Company's stockholders
yesterday when the report was presented
IL was the first occasion that the share
owners OF the company had got together
vince the receivership became efrectit.
md the facts and features surrounding
me bankruptcy we're gone into with
great thoroughness There wns n very
apparent antagonism TO the manage
ment IT. section OF the stockholders
present which resulted in the non,ina-
lion OF an Independent" candidate for
membership In the board of directors.
ih"N WAS WltnuTdWn AFTER IL
mad been ruled out OF order by Chairman
Nicholas r. Brady.
In presenting the report to the stock
FOLDERS Chairman Brady pointed out that
we chief cause for the receivership was
the lack OF working capital, not only for
meeting construction and equipment OBJ
cations hut for continuing Improvement
plans. Heavy war costs. he said, were
responsible TO large degree for the
IN a., xr-tE at. =,
Capital Was Insumcieut.
The possibility Of this situation" the
report says, was foreseen a wear ago
ana In seeking the assistance OF the War
FINANCE Corporation in financing our
issue OF s5I,735,00o OF secured gold
notes. which were to mature on July /
last. we requested In our original appli-
cation OF April so, 1918, an additional
loan of s16.250.o00 to provide for
further requirements. The War Finance
Corporation preferred at that time to
consider only the maturing note issue
and at its suggestion we eliminated the
request for the additional loan from our
application. =
THE fundamental cause for the re-
ownership was our lack OF capital for
meeting outstanding construction and
equipment obligations and continuing
improvements This condition was more
aggravated, because for ten years (and
then only small amounD the company
has sold no securities for capital pur-
poses except $50. 900, 900 OF six year 5
per cent. notes for carrying out provi-
sions Of the subway contracts.
1T has made expenditures for other
capital purposes aggregating in the
ueighborhood OF s2o,000,0oo for which
i
This caused a continuous drain upon the
receipts from operation and necessitated
large borrowing on current notes from
NanES and trust companies and from the
constituent companies Of the system.
50 long as the system WAS earning
Substantial profits such temporary fnanc-
ing presented no serious embarrassment.
and in the judgment OF your directors
was preferable to selling long term Sc
curities at sacrifice but when war
conditions overlook US and net earnings
were largely reduced there was no avail
able source of capital except from the
United States Government and relief
from this source failing our cash be-
came so depleted that even moneys
armed for fixed charges had to be used
temporarily for capital purposes.
Must Provide for Floating Debts.
THE important problem now before
the company is provision for the present
floating Indebtedness and for completing
the programme Of improvements which
We have been working out during the past
elk years. and which we believe are es-
sential to adequate transportation for
me community and will be source Of
profit 10 our companies.
"In carrying out this programme we.
OF course. did not foresee the frightful
conditions produced by war, Nor could
We have expected so much delay on the
part Of the city In construction OF rail-
roads which we, under our contracts.
'rere 10 equip, when constructed. and op-
crate.
Under the terms OF the city contracts
'hesA railroads were to have been sub
s'antiaily completed two years ago. but
out Of a total of 115 miles of track to he
instructed by the city, ~ miles remain
>t!ll uncompleted Uncludlng some OF the
most important lines and connectlons),
and even with reasonable energy these
vii, not all be ready for operation for at
least TWO years. The city's work there
,0re Is rot less than four years behind
Tine.
In the meantime we have expended
inward OF s60.o0o,oo0 In performing
our part Of the contracts, and OF this
'eo!.!ties not In operation. and is, there
fore unproduct!ve capital.
We think we are warranted in saying
''a' had the city proceeded promptly
With It's construction work. and properly
'vnchroniZed II, most of the essential new
nee might have beer in operation during
he past year, many OF our difficulties
would have been avoided and in spite OF
war the puhlic's transportation would
have been fairly well taken care Of
Your directors believe that It would
Ne calamity 70 the public. and disas-
'-ous to those who have invested In the
""m1any's securities. II the construction
N-ogramme which we have planned, in
'0njunction with the city, should not be
'ompleted. In order 20 attract new cap
'al there must be credit. and credit can
o7Iv come with ample earnings
The essential features Of the income
a''oint follow:
1915 Change