Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-04-09
CAR CD.
FILES ANSWER
TO CITY BRIEF
Contends Earnings Put Into
Dividends and Improve
ments on Boards Order.
MAY RULE NEXT WEEK

The public service commission
should not be deferred in granting
the indianapolis Street Railway
Company an increase in fares by
the contention of the city that the
company has paid dividends and
made capital improvements out Of its
earning, because these expenditures
we're made in carrying out order
of the commission, Ferdinand Win
ter, attorney for the car company,
declared today In a reply brief filed
with the commission.
THE street railway company does not
claim that there Is anything in any or
der of the commission that obllgates the
commission to provide rates Of fare that
viii enable it to pay dividends upon its
preferred stock" the brief states. ut
does claim, however, that the public has
no right to the use of its property ex-
cept by the payment Of rates which Will
afford a reasonable return upon the value
of such property, and that, as the com
mercial rate Of interest ranges from Z
to per cent, such reasonable return
should be at least per cent after pay
ment Of all operating expenses. includ
ing the sum set apart by the commits
sion for maintenance and repairs, and
all taxes"
POINTS OUT ! PER CENT
SET AS FAIR RETURN.
The brief continues by pointing out
that the company understands the com
mission has set I per cent as n fair re-
turn, but that the company Is asking for
much less than this amount. 1t points
out that the value OF the property as
fixed by the State tax board is $4,000, 900
and that the value Of the property as
tentatively fixed by the commission, in
Guiding recent IMPROVEMENTS and addt-
lions. is approximately $4,000 900. 1t
also shows that per cent Of this sum
is S1,120,000 and that the proposed net
earnings Of the ompany would be only
1891, 2374I, which would be further re
duced by $50 796.02, representing the DIFF
ference bet9yeen an overestimate Of esti-
mates Of receipts from cash fares and
an underestimate Of expected receipts
from transfers.
but while tho company would have
no right to complain If its existing rates
Of fare we're sufficient 10 yield a return
Of per centum upon the value OF its
property used and useful FOR pubic
service" says the brief land Is not now
complaining, although such rates return
only ga per centum on valuation OF
Sl6.000000 and ~ per centum or a
valuation OF tJ,OO0o coo, Il has the right
to moist and does now most strenuous
~ insist that II should not he required
to deny dividends to its stockholders
and appropriate all Of Its net earnings
TO the making Of capital improvements.
and that It is the paramount object 10
secure such action by the commission
IN the emergency which the commission
has found to exist ~ & result Of in
creased labor. commodities and interest
costs as viii prevent injury to the bust
ness or interests Of the people which
will result IN financial inability OF the
company to give proper service, and that
the statute does not contemplate that
this shall be done at the expense OF the
company. as is in effect the contention
of the city authorities"
WAGES. IMPROVEMENTS
ABSORB NEW REVENUES.
The brief declares that all that has been
realized In increased rates has been con
sumed In increased wages and improve
ments. which have amounted TO $400000
since July /, 1919. The company states
II no dividends had been paid there stu
would have been the necessity for Dor
rowing to make improvements The cap
ital expenditures are the cause OF the
companys present situation, the brief
states
IF the company is deprived Of credit,
as it inevitably VIII be n the rates OF
fare are not sufficient to dcfray It's oper-
ating expenses. fixed charges, including
interest upon temporary loans taxes and
dividends the result Is bound to be in
jury Of the most serious character to the
business and interests Of the people of
indianapolis" the brief declares.
ORDER EXPECTED
EARLY NEXT WEEK
Further on the brief states
"If it Is now necessary, as we sub
nit is clearly shown by the evidence to
further increase fares in order to main
tain and increase the conditions for the
beueft Of the public already secured as
the result of the wise action Of the com
mission, It is not to be doubted that the
commission Will not be deferred from
taking such action by the insistence Of
the city authorities that expenditures
have been made out of earnings for cap
ital improvements and the payment of
dividends, or because their estimate of
future conditions is more hopeful than
that Of the company"
The order Of the commission on the
company's petitions for 6-cent cash fares
and 2-cent transfers Is expected to be
made early next week The order has
been held up pending the fiIing OF briefg. |