The Washington herald., 1921-06-10

Cenpantes' Conditions In 1914
Here are some Advertisements Of
brokers. picked at random from
some newspapers in 1914, that
vividly describe the conditions Of
the two street car companies ar
that time. and indicate the uni
yersal benefit to be derived from a
merger of the two car lines that
simultspeously divorces the Po-
tomac Electric Power Co. from m.
Washington Railway and Electric
Co."
These are some of the advertise
ments to which reference was
made:
To the Investing Public.
have recently recommended the
purchase of Capital Traction stock.
1 now urge it 1t was a great bar
gain then at higher prices; IL is a
greater bargain now II, through
manipulative tactics, the price Of
this stock Is reduced below it's true
value. we ought TO accommodate
ourselves to the opportunity TO well
come its purchase. In local finan-
cial circles IL is commonly recog-
nized that the denunciation of this
magnificent railway property comes
directly or Indirectly from one
source-snd that source is perhaps
omtially connected with the wash
ington Railway and Electric Com
pany and the Washington Stock
Exchange
The purpose Of this continued
pressure on Capital Traction Stock
is not clearly apparent. IL il is for
the purpose of reducing the price
Of the stock to a parity with the
stocks of the Washington Railway
and Electric Company. in order TO
effect basis for the merger of the
two properties. the motive is a
complete failure. The Capital Trac-
tion Company will not merge with
the Washington Railway and EIec-
trio Company upon basis Of
Washington Stock Exchange QUO
tations. OF that I am confident.
So Capital Traction stockholders
should not be deceived by prices
seeming TO indicate public supply
and demand.
For the public good and con-
venience IT may be wholesome to
consolidate these properties. That
accomplishment would assure uniyer-
1
more direct and effective car service
by rerouting; and perhaps ulti.
Inately work a public economy. But
such plan would have to be con-
summated upon q business basis,
and not upon Washington Stock
Exchange quotations The intrinsic
value of each property. the earning
value OF each property, the prospec-
tive value Of each property without
merger, and the prospective value
Of each property with merger, are
the essential elements for consider
alton in effecting this scheme of
unifcation.
Arriving at the relative values
upon such bases. the Capital Trac-
tion stockholders have no occasion
for apprehension. In fact. the Capi-
tai Traction Company alone shows
earnings. available for distribution,
strictly from its operation as a
common carrier.
In the Washington Railway and
Electric Company's sworn pub
tshed statement to Congress for
the year 1914. there appear the fol-
lowing items of credit:
Sale of POWER in Dis
ulct .........-.. Se5,s4l.i2
Sale of POWER outside
District ............. I7s.sO5..5
Interest and dividends on
securities owned. $685.
$3.50, The company's
sworn statement to the
Public Utilities Com
mission shows that this
amount includes the
dividends paid by the
Potomac Electric Power
Company to the WASH
ington Railway and
Electric Company for
1914 of ........... 500, 900. 90
Total from sale of Elec-
tricity and Electric
Power dividend. .ss4aS4e.s7
Net income for the year. S32.ss2ss
1t is, therefore, apparent that the
total amount received from the sale
of electricity exceeds the Com
pany's net income for the year
by practically $4,000, and without
these credits from the sale of cleo
trio power there appears not to be
one cent earned, as a common car
rier. available for DIVIDENDS ON
ether the preferred or common
stock of the Washington Railway
and Electric Company.
Even including the Potomac
Electric Power Compsny's earnings
the Washington Railway and EIec-
trio Company showed a DEFICIT
Of s47,l47o1 for tM year 1914 after
the payment of dividends.
From Railway operation the Cap
ital Traction Company paid 5h q
In dividends for the year 1914. and
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