The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-10-03
PLACARDSNOT
INCONSISTENT,
DENMAN SAYS
Tr-Ei1 Railway Company Head
Explains Per Cent Dividend
Guarantee.

6uaFantee.
Fl am quite sure that those
people who charge the Tri-City
Railway company with inconsist-
ency in advertising by means of
| placards on its cars and otherwise
the attractiveness of the United
Light & Railway company's per
| cent prior preferred stock. while at
the same time requesting permits
sion to install one-man cars as a
part Of the policy of enforced re-
trenchment 10 make running eS-
penses, do not fully comprehend
the situation" said President B.
]. Denman, of the Tri-City Railway
& Light company. this morning.
THE fact of the matter is that
IN order that the United Light &
Railways company may fulfill the
pledge by which it is bound to pay
per cent on its prior preferred
stock, it must see that its subsidi-
airy corporations are on a paying
basis. This it would seem is one
very good reason for the economies
We are seeking to install. The Tri-
CITY Railway com pany, therefore,
is filling its obligations to its hold
ing company in doing its part in
taking care of the interests of the
several thousand holders of United
Light prior preferred stock in the
Tri-Cities.
If it cannot do its part under the
conditions that prevail in holding
up the hands of the United Light &
Railways company, the problem
that confronts it has but one of
three solutions: Either it must in
crease rates, or reduce expenses,
and in the event that neither of
these is possible, the last alteraa-
tive. to suspend service. Obvious
ly, the most desirable proposition,
at alb events so far as the public
is concerned, is to reduce expenses.
particularly when this can be done
in way which will not impair the
quality of the service, but on the
other hand will insure a greater
degree of safety to the company's
patrons.
Garry Tri-City Company.
Frankly stated. the United Light
& Railways company has been car
rying the Tri-City Railway com
pany for a long while, and in the
face of its obligation and its guar
antee to make good on its Z per
cent prior preferred stock The
holding company is bound to go on.
but it canrot continue to carry a
load. for it will be appreciated that
dividends cannot be continued even
on the higher grade securities if
1 he &c
most economical way, and il would
be manifestly unfair to require
some companies to support others
which are not making even operat-
ing expenses. as is the case of the
Tri-City Railway company.
I'VE are endeavoring TO attract
and enlist local capital not only on
the score of profitable investment
so far as United Light & Railways
prior preferred stock is concerned.
but with the aim to have the tri-
cities as largely represented as pos
sible in the actual control of the
property. We are succeeding in this
to most gratifying degree. our list
of local stockholders having in
crea sed at the rate of !. 900 annual
ly 1t is to insure their contentment
that we are seeking to restore the
Tri-City Railway company 10 a pro-
fitable basis. The more local
people who become interested in
our property, the more rapidly the
development of the>- partnership
feeling between the company and
the community it serves. This is an
essential to- our mutual progress
for it insures cooperative effort
which is sure TO afford a happy is
sue out of all our misunderstand-
ings.
Require Heavy Investment
Zone OF the chief things which
distinguishes the public utility
business from a mercantile or man
ufacturing business is the fact that
public utilities require an invest
ment OF approximately IS for every
dollar of annual revenue, where
manufacturers and merchants re-
quire on the average probably only
81 of Investment for 81 of annual
revenue. In addition to this. the
demand for the extension of gas
and electric service is insistent and
it is absolutely essential that pub
lie utility service be provided if
communities are to grow. 1t is
impossible to conceive a modern
community without these services
The public utility business cannot
make extensions and Improvements
out of earnings, as is the case in
private undertakings, because there
is really no such thing as profit
in public utility service, the re-
turns being limited to TX per cent
or s per cent. which is necessary
to attract capital There is absolute
ly nothing left for extensions and
these must be provided by securing
additional capital through the sale
of stock or bonds
ut will thus be seen that the
company is not inconsistent in ad-
vertising its prior preferred stock
for sale and at the same time asking
for the operation of one-manS cars
on its railway lines. which will very
! substantially reduce costs and we
feel quite sure that when these
facts are understood and particu-
larry how vital it is to every per
son in the community that people
invest their savings in our securi-
| ties. the people will be fair with
u.s.