The Washington herald., 1921-05-24
There is in the worst of fortunes the best of
chances for a change-Eurpides.
Washington Street Railways.
XIV. SHOULD REAP AS THEY SOW

THE census of 1900 gave Washington a popu-
/ I-lation of 278yooo 1t now has $4,000. When
= the railway exploters came here in 1896 to
gather all the street railways under hat the city
had around 100000 population The fare then
cents or six tickets for IS cents. The roads
were merged under those conditions of that time
It was then with that population and low fares the
Washington Traction and Electric company was
granrsd its charter under Virginia law holding
company. 1t under these conditions the Wash
ington Railway and Electric company got its charter
under the wing of the Washington Great Falls and
Electric, a holding and operating company. 1t
was with things they were, that it boosted the
W. T. & E. capitalization from S22,ooo,ooo to $32
soo,oss. 1t was from 1909 to 1919 that it managed
to psS dividend its S6,5ooyooo common stock
These dividends starting per cent went, for two
years, to per cent, then and GA, to per cent
for two years, then dropped to ga and to just be-
fore this country entered the
These dividends paid a six-for-2 scent
fare, but not actually earned by the w. R. &
E as a street railway. They were the product of
very large earnings of the Potomac Electric Power
company and by economies of management which
caused strike of the employees and account for the
present condition Of the line Every dollar of these
dividends should have gone to the maintenance.
They were needed there, and the low average con-
dition of the properties is a consequence of this
stzlwart effort to boost the common stock which
went from S. and So to 500.
The Herald would repeat that the investments
mad. to form the w. T. & E. and the w. R. & E.
were good only from the promoters point of view
1t Wallngford project. The tendency of
courts in these days is distinctly against allowing
corporations to capitalize their bankruptcies. Ac-
cording to the statement of the w. T. & E. and the
re9ords, the Washington Railway and Electric cap
itslized not only failure, but nine distinct and
separate failures 1t only included the full czP
tai of those companies but their unearned returns
OF the eleven street railway corporations it took
over, not one has earned fair dividend, above its
fixed charges, for the preceding year.
Only by owning the Potomac Electric Power
company has it been able maintain itself in any
year AS railway proposition it is and always
has been a poor investment. 1t has never kept up
IFS service. Even when it was able to do so, it
preferred to pay dividends its common stock
Right here is the reason and not prejudice that it
loses patronage whenever there is traffic choice
between it and the Capital Traction. The old hos
tiits--~hich came from the strike is not the con-
trolling factor in this, but service.
1t was this sort of financing, the cold booded
indifference not alone to labor, but to the public
which led to the strike and to property deterora-
ton. Everything else sacrificed that dividends
might be paid the common stock There seems
to be other conclusion to be gained from the
testimony at the several hearings. 1t is this policy
for which it is demanded the people of this
District shall take responsibility in constantly in
creasing fares
1t is this they expected to consent to have
eternally saddled upon them through a merger
which will perpetuate gross overcapitazation, with
fares high enough to support it. They are ex-
pected to make good investment of bad one and
pay in blood money for the kind of financing which
made them victims. We have more faith in con-
gress than to believe that this will be permitted