Evening star., 1922-12-30
VIOLENT MOVES IN 1923
BOND LEVELS UNLIKELY
Libertys Made One of Years Features
by Reaching Par-Marked Changes in
Investment FashiOns-The Trend.

ton Of the fractions, all the u::ilt4e.
| shared the improvement. but the
gains were greater IN the electric
| light and power and the telephone ;s-
| sues.
Hit By Wage Increases.
Ta.ans UP the case Of tie tractin1,s
first. the street car companies were
especially hard hit by the rapid.
mounting labor costs. Corresponding
increases IN fares were very di:hcul.
! to obtain. For sorae reason or o:he-
public service commissions were more
companies than to any other OF tie
| utilities: The scent fare had becoE-:e
tradition. In the public mind &. had
merit not possessed by cents or s
cents.
When rates were finally raised. ?.
. they were in most cases outside tie
larger cities. great .nroads hal al-
! ready been made into surpluseo AID
! sor1e of the weaker companies had
gone into bankruptcy. Practically ~
| OF them had suspended dirideads or
| their stock.
Investors Fought Shy.
1t became impossible for street-cAr
companies to do any new financing ea-
cept In cases such as that of lfon-
treal Tranways. where there is con-
tract with the city which .nsures TIE
payment of .nteres. on the company's
nonos. Investors even fought shy o.
| the bonds OF holding companies. any
! large part OF the income OF which was
derived from street-raiiroad earnings.
Aside from the political factors, the
growing competition Of the private pas
| senger car and the public motor bus
| f.ishtened capital away from fractions.
Even the very recent influx Of taxicabs
kcharging lower rates than ever before
| was not without its effect.
| The street railroads made a good fight
against ali these obstacles. They intro
duced the one-rlan car and econor,,zed
| In operation in every possible way.
! They also adopted the motor BUS as
a FEEDER and. in consequence. II Is prob
ably true that their credit at the end
Of the year was better than at the be
| to give high yields compared with other
utilities.
Favor shown Gas Issuea.
Gas companies Jared much better
| than the fractions. Increasing tavo-
was shown toward their securities
all through the year, although they,
! too. suffered from the attitude Of the
| public authorities IN insisting that
! rates be reduced fully as fast as, &
rot faster than. costs
Electric light and power and te!e-
phone issues have been eagerly
bought at advancing prices. Expar-
sion IN both these fields has beer
STEADY. The electric light companies
find difficulty In keeping up with the
| demand for additional service. There
seems to be no limit to the increase
In the number Of telephones. The re-
| suit Is that good first mortgage bonds
Of either of these utilities cannot be
secured 10 give much better than a
per cent return. Even the preferred
stock of these companies finds a ready
narke: among investors and in one
notable instance, that Of the American
Telephone and Telegraph Company
financing was done by the sale of
ton of stock 70 the amount of s1i5.-
O9o:o 900 by this company withou. any
underwriting was one OF the most
significant investment developments
! OF the year. American Telephone AID
Telegraph has now the largest num-
Der OF stockholders OF any American
corporation.
Among the electric light companies
the Brooklyn Edison successfully
financed Its needs by the sale of ad-
d,toaal stock to its shareholders.
There are many other instances i'll
the case OF smaller corporations scat
tered all over the country. All thu
had very favorable ef5ec, on the
| mar ct price OF telephone and electric
light bonds.
Customer Ownership Popular.
Along the same line was the devei-
opiAent OF the customer ownership
plan. Many utilities. especially in the
middle west. utilized this method OF
financing to a great extent during
1922. The idea is to sell small lots of
, preferred stock to the people the util-
ity serves. thus making them partners
and securing their moral. as well as
their financial. support for the cor
poration.
The story is told OF a western u.il-
tty which had a case pending inv,lv-
ing rates before the local municipal
authorities AT the public hearing the
representatives Of the company were
| astonished when q prominent attor-
ney who had never been connected with
the utility in any way made an elo-
Quent plea for fair treatment. spea;s-
Ing simply as citizen.
After the hearing was over the az
torney for the corporation expressed
his gratitude and asked why this gen
tlenan had come to their assistance.
The answer was that the speakers
daughter had bought one share OF the
company's preferred stock. TO pro
tect that 800 investment this utto--
ney made plea for which he would
| have charged any client at leas- $500
Copyright 1927