The Birmingham age-herald., 1920-11-30

september 4, 1919, these departments op- erated with five-cent fare. On that date six-cent fare became effective.
 On September 1, 1919. a very large in- crease in the wage scale of trainmen and shopmen became effective by virtue Of contract between your receiver and the Amalgamated Association of Street and Electric Railway Employees of America, Division No. 725. The term of said contract is three years and the wage scale is uniform throughout the term.
 The increase in wages to trainmen and shopmen. as shown above, was inn mediately followed by an increase In the wages of practically all other employees to the extent that your receiver was ad- vised was necessary to the maintenance of the organization and fair in view cf the increased cost of living. These in creases are still in effect, and, in the opinion of your receiver, must remain in effect for considerable time. These wage increases more than absorbed the increased revenue resulting from the six cent fare.
 FIGURES ON RAILWAY
 For the period of one year, beginning November l, 1919, and ending October 3l. 1920 the operation of the railway de- partment of the Birmingham Railway, Light and Power company resulted as follows:
 Gross revenue. ..... $3,012, 263. .U5 Operating expenses. .$2, ,27S, ,105.84
 Taxes and license
 (50 per cent of
 totaD ............... 1M,247.67
 Renewal and re-
 placement reserve
 (50 per cent of
 totaD ...... 2a0,l571s
 sTidewater rental. 75,000.00
 ~Tidewater operat-
 ing deficit for the
 period ............. 7,555 32-s2, ,776, ,O6S. s Net operating in-
 come Z3b ,lS6.U> "'Note-The Birmingham Railway. Light and Power company is liable as guarantor for the principal and interest of the bonds of the Tidewater company. l and your receiver has, pursuant to your honor's orders, borne the net deficit of the operations and paid the interest on the Tidewater bonds out of the estate of | the Birmingham Railway, Light and Power company. The interest on the Tidewater bonds is therefore in its prac- tical effect rental. and it is so treated in the operating statement shown. Only 50 per cent of the total taxes license and renewal and replacement re. serve is allocated to the railway depart ment. although both the book value and the state tax assessment show a some. what higher percentage of the entire property in the public service invested in the railway department. INCOME ON VALUATION
 ''The net operating income of the entire property for the year was $So7,- l iC1x ;~o rate of per cent on total value o1 only s1l.535,20o.
 1 "The book value of the entire prop erty of the Birmingham Railway Light and Power company is $24,090,- 42124 The total net operating in come for the year yielded return or the total book value of only 3.3 pc, cent. ? 1 "rhe average tax assessment for the past four years by state authoritie. against the property of the Birm.ng. ham Railway, Light and Power com. 1 pany is based on a value of $14,202, ,240 l The total net operating income yielded a return of only 5.6 per cent on thi. amount. Assuming the railway to rep resent one-half of the total invest ment, the net operating income from the railway department yielded a re | turn of only 1.9 per cent on its bool value and of only 3.S per cent on it. | taxable value.
 Although the only relief in the wa. of rates which your receiver has real ized has been the increase of i cent il the street railway fare, producing al
 increase in total gross revenue of ap
 proximately 7h per cent (and conse quently the same percentage of tota increase in cost to the public for tn, several services supplied. material i'm provements have been made in tho serv ice and in the physical condition of tn property
 in the service and in the physical con dition of the property.
 Immediate relief by increase of in come is imperative. It is obvious tha this relief should come through th' railway department. It is not, howeves the purpose of the receiver at this tim, to present the question of a permanen valuation or fair return thereon.
 "Your receiver is advised that tn, Alabama public service commission i' now clothed with plenary power to fiji rates and fares."
 TM0 LEI m lM TRAIM