The Washington herald., 1921-07-22
Samuel Russell Declares
Lines Can Meet Record
OF Normal Times.
CONSIDERS MERGER
OF STOCK ABSURD
Claims Finance Juggling
Never Can Solve Trac-
ton Problem.


money on a-sk cent fare as it ever
made in normal times. according to
Samuel Russell. a Western utilities
expert, who has made a survey of
the local street car situation.
The gross revenues of the W.
r. & E. Company for 1919 were s4,-
s7o.142.2s. which includes $780,
s34s3 derived from the sale of
power and which cannot be properly
regarded as railroad earnings"
Russell declared, thus reducing the
proper railroad revenues of the
company to $4.44s.So7.35. Its total
expenses and charges were officially
reported at S4.5o1,669.42. which in
cludes s7Ss,2s1.54 paid out as in
terest on capital. which in any
proper view comes within the cate
CORY of profits and not expendi
lures. Reducing reported expendi-
lures by this amount we have
proper railroad expenditures OF S3,-
715,3s7.ss which, deducted from the
proper railroad revenues of the COM
pany. produce earnings of s734.-
41s.47 to meet stated interest
charges OF s7S6.2S1.54.
Cannot Earn Interest.
The plain fact" Russell ex-
planned. lis that the W. r. & e. is
not earning interest on its bonds.
and by no legal contrivance Of the
Public Utilities Commission can it
be made going and paying con-
cern.
The fair value Of the W. r &
been sIs.5o0.00o. The outstanding
bonds against the company amount
to s17,5eo.o0o.
1T 10 absurd to talk about a mer-
ger OF the stock OF the Capital
Traction Company with the stock
of the W. r. & f. Company when
the latter railroad Is utterly unable
to earn a dollar Of dividends to give
any value to its SIS 100000 OF stock.
It is an impossible thing.
The Capital Traction COMPANY,
whose stock on the market Is worth
sIo320.eO0 at present quotations.
can not merge its stock with that
of the company. which Is worth
nothing except as that value may
be made bv other than railroad in
vestments," Russell pointed out.
This merger talk will get nowhere
as far as the merger Of the street
car companies is concerned. 1t
simply cannot be done. The merger
that the W. r. & f wants is a stock
merger with the Potomac Electric
Power Company whereby the sl5.-
600 900 of stock of the street car
company will be perpetuated and
the six millions of stock of the Po-
tomac Electric Power Company,
which Is worth little or nothing
above par on the market, will be
inflated by fifteen millions of the
common and preferred watered
stock of the street car company.
Bonds of Concern.
The outstanding bonds Of the
rev concern would be $2s.S5O,OOO,
to which 1t is proposed to add Slo'-
0o0. 900 more. bringing the total OF
bond obligations to s3S.S50.OO0, and
to this is to be added $2l.ooo.ooo OF
merged capital stock obligations.
initiating the total to approximately
sixty millions of capital obligations,
all to be borne by concern. the
capital stock of which can be pur-
chased in the market at present
for ss.6S2,5o0.
4g c n c
lieye that the unification and i'm
provement of the street car service
in the District Of Columbia can be
nromoted by any such stock jobbery
as this, is being grievously imposed
unon." Russell insisted. THE men
who advocate this scheme know bet
ter. They are not interested In the
Improvement of the street car SER
vice or the unification Of the street
car properties.
Few More Stunts.
They are only interested in pull
ing of few more stunts in high
finance. Neither Congress nor the
Public Utilities Commission nor the
people of Washington should permit
thems elves to be deceived as to the
purpose and Inevitable result of this
scheme. 1t will not contribute
thing toward the unification of the
street car service or to the reduction
of street car fares to a reasonable
level" Russell emphasized. The
extension of the service of the Capt.
tai Traction Company throughout
the District. by legal direction and
by legal means. is the only solution
of the problem and the sooner this
is undertaken. the sooner will the
people have relief. Any other pro-
ject is just bungling the situation.
Increase of Fares.
.The increase of street car fares
from is cents, the legal rate pro-
scribed in the franchise to 6H cents,
is an increase of precisely 50-per
cent of the rate at which the street
car companies are obligated to carry
passengers within the District.
Russell showed.
The actual increase is 2I1 cents
per passenger. This Is about double
the increase in the operating costs
per passenger of the Capital Trac-
tion Company for the year 1919 over
the year 1914. as disclosed in the
company's reports. In 1914 the
Washington Railway and Electric
Company carried 64,617.206 passen-
gers. at an aggregate operating cost
of 81 .355, ,es5,6s, or at cost per pas
senger of 81 cents. In 1913, the
w. r. & E. Co, carried 6,35S, sos
at an aggregate operat-
ing cost OF s3,47s.efes7o, or at a cost
-