New Britain herald., 1920-11-22
Only Immediate Financial Relief
 Can Save Situation INTERSTATE COM. TOLD
Connecticut Public Utilities Puts Forth Plan to Change Freight Rates-Ncw Haven Road Has I'aid No Dividends Since October 1915.

Washington, Nov. 22.-Unless irs- mediate financial relief is afforded the New England railroads, "all or most of them will very shortly be driven into receiverships' the inter state commerce commission was told today by Charles F. Choate, Jr. and Wilbur La Roe, Jr., counsel for the lines.
 The commission was told that the actual returns to the roads in Sep tember and the estimated returns for October under the increased rates granted under the transportation confirmed that the income received by the roads was not sufficient to meet their requirements.
 Would Change Rates.
 As one means Of relief the roads asked Tor a readjustment of the division of freight rates on through traffic between roads west of the Hudson river and those east of that river. In this request the roads were supported by R. T. Higgins, chair man of the Connecticut public utili- ties commission and Henry c. Atwell of the Massachusetts public utilities commission.
 Counsel for the roads said that for the eight months ending last August 31 the actual deficit in the net rail- way operating income of the roads. excluding the Boston and Albany a part of the New York Sentral sys- tenn was $23,s74.s76' and that esti- mates for next year showed net railway operating income if about sIo,0O0.0O0 or s40,000,O00 less than the net railway operating income re- quired by the transportation act to show six per cent. on the fair value of the property.
 $22, 100000 Less Than Needed.
 It was stated that. this would be s22,o00.ooo less than the amount re- quired to meet fixed charges. The book cost of the lines, was placed at more than ss3s,247,769 and it was pointed out that an annual return of 5 per cent. on this amount would be $5O.29S,4s5. .-t
 "The fixed charges of the New England roads as of August, 1920" said counsel for the lines, "are s37.- 64l,465 against which there is avail able non-operating income of s5,S53.- 4oA leaving what may be called net fixed charges of s31,7ss,o61 or nearly s22.o0O,oo0 in excess of their net railway operating income.
 Fixed charges must be met or re- ceiverships will inevitably follow. And receiverships would be disastrous from every point of view, for out standing bonds and debentures now bearing interest from 1-2 per cent to 5 per cent would have to be re- funded at much higher rates. New capital < would be unobtainable from private sources. The government is vitally interested for it has already loaned the New England roads s1O0,- 000,000."
 New Haven Road Losses.
 Counsel said the New Haven road had paid no dividends since October. 1915, loss to stockholders of $60,- 100000.
 'The Boston and AIaine," counsel continued, has paid nc dividends on its own stock since 1913. loss to stock holders of $14,O0O, 900. By it's re- effected December l, 1919, the Boston and Maine converted about $2,50O.000 annual leased line returns from fixed charges to pre- ferred dividends and the holders agreed to a 20 per cent reduction in dividends for five years. If these dividends are not met, the bonds of the Boston and Maine will cease to be legal investments for Massachu- sett's savings banks"
 Special Attention Called
 The attention of the commission was directed to the commission state ment in the recent general freight rate increase that the evidence as to the disproportionate- needs of the New England lines make it desirable that the carriers give careful consid- arafinn Tn fha divisions nf joint accuring to the lines. Argument then was offered in favor of a more equita- ble allotment of the division of rates
 (Continued on Eleventh Page).