Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-07-15
General Manager
A. & K. Gives Reasons
for Fare Increase

for Fare Increase
In connection with the petition Of
the Androscoggin & Kennebec Rail-
way CO., to the Public Utilities
Commission for a modification Of it's
fare schedule from the present seven
cent fare to a ten cent fare and the
sale Of II tickets for one dollar, Gen.
Man. Alfred Sweeney, makes the fol-
lowing statement for the company
for the enlightenment of its patrons
upon whom the burden of increased
fares, if granted, will fall.
The officers Of the company who,
with two exceptions are Maine men,
appreciate fully the gravity of their
step in asking higher rate Of fare,
and it was with great reluctance that
this step was taken and only after
conditions became so acute that the
necessary improvements and in
fact, the service itself must be cur
tailed unless additional revenue is
provided.
The directors Of the company feel
that their position with a public SER
vice corporation of this character,
so necessary to the welfare and
which it operates, places them more
in situation as trustees for the
public than as officers in a private
corporation, and it was only upon
their firm conviction that the pub
lies interest was being jeopardized
that the petition for increased fares
! was filed.
For a great number Of years the
company has maintained service I'M
der very adverse conditions, the
revenue never having been enough to
| adequately maintain the property
and pay it's fixed charges. This stu
alton, Of course, was reflected in the
financial standing of the company for
a long time, money for capital re-
credit of the Cumberland County
Power & Light Co.
In December, 1918 the company
passed into a receivership and was
reorganized Oct. l, 1919 as The An
droscoggin and Kennebec Railway
Company. The principal result Of
the receivership was to wipe out all
of the l.. A. e. w. ST Ry capital
stock, consisting of 100000 preferred
stock and s2,4O0,000 common stock.
1t eliminated also $614,000 three year
gold-notes of the L. A. & w. ST. Ry.
and something over 100000 of bank
and other loans.
In the above schedule the notes
and loans represented full value dol
lar for dollar put into property. The
preferred stock was obtained
through the conversion Of common
stock payment Of $40 per share.
Therefore it represented $4,000
plus whatever value there was in the
common stock. The value Of the
common stock was problematical,
but it certainly had value, as 1t
was sold with the bonds, and in that
way the bonds brought a much high
err price than bonds upon a property
Of this character brought in the
open market at the time they were
sold.
1t is therefore evident that the re-
ownership reduced the capitalization
of the company and eliminated over
$1.0O0,0OO in actual cash investment
which had accrued to the present
owners. The present owners Of the
property are the original L. A. & w.
Co. bondholders whose holdings
have been converted into stock Of
the A. & K. Co. The issue Of these
bonds was SO safeguarded by the
terms of the trust mortgage that the
majority of them were certified by
the trustee upon the basis Of IS per
cent. of the actual cash cost Of bet
terments and extensions. It is an.
parent therefore that the present
capitalization Of the company repre-.
sents not only dollar for dollar act
ually invested, but also over $1,000
600 cash investment extinguished
through the receivership. and to
these investors there have been no
interest payments since Oct. /, 1913.
To return to the present and
pressing situation which confronts
the company. For the first five
months of 1920, ended May 81. the
company shows an operating loss OF
$15,738 In addition to this there
has accrued in that period taxes
and interest upon the L. B & B. and
the Augusta division underlying
bonds, $46944:S9. This results in q
deficit Of $62, 6S2.S0 without any pro-