Evening star., 1924-07-12
Public Utilities Are Sound
Investment, Babs0n Asserts
Considers Group Better Off Than Trac.
tions-Po,ver and Light Issues
Facing Fine Future.

sidered, the average power and light
company has much more room for ex-
pansion than either of these other
groups We are using but a small
fraction of the potential power. New
hydro power sites can be developed
and output can be increased to- take
care of at ever expanding demand;
while the new mercury boiler presents
wonderful opportunities in connection
with steam power. The late DR..
Steinmetz, when visiting the Babson
Institute last summer, described a
relatively simple method of conStruc-
tion which would allow the average
home to be heated economically by
electricity. Within the next twenty
years we may see this done on
large scale, and, if so, the power and
light companies will be called upon
to supply heat as we'll as light and
power.
Utilities in Favored Class.
Railroads will enjoy an increase in
freight traffic as population becomes
more dense and as the volume of
have no such field for expansion as
that open to this favored class of
utilities. fractions have suffered a
decline in volume due to the advent
or the automobile. AS to the future
of the auto bus only the most daring
cares to forecast. This does not
mean, however, that our traction
properties will go out of existence
nor does it mean that the handicap
applies to all alike.
from the investment viewpoint
fractions should be divided into three
dlstinct groups. We have the strict
~ urban lines of our large cities that
Will continue to be a necessity be-
cause they offer rapid and economical
transportation in congested districts.
The volume of business allows them
70 70 carry passengers at a low rate.
Ihelr field will grow as our cities
grow and they will increase in use
iulness as congestion becomes greater
The second class of fractions en-
nraces the single-track suburban
lines. Many of these are being
operated by a receiver at this time
ana 1t is probable that practically all
OF them viii be replaced by the motor
One-Man Car Problem.
one-man cars have proven a tenn
porary relief in many cases. but the
tendency at present is to increase the
pay or the "one man." so that within
d leW years the pay roll promises to
be as large as ever and nothing of
permanent value will have been
gained. There is no reason, however,
why they should not operate their
own bus lines. They may be able to
make the motor bus show a profit
break even in the operation of cleo
trio cars.
There is, however, a third class of
fractions. which includes the double
track, high-speed suburban electric
lines and which is worthy of special
study. l have recently examined one
of these properties operating passen-
ger and freight service between two
cities forty miles apart. The figures
show that this electric line can carry
b@oth @ passengers and freight cheaper
than its steam competitor. 1t actu-
ally provides the most economical
transportation between these two
cities and no auto bus can compete
with 1T as to speed. AS long as such
a condition exists it's maintenance is
not only justified. but it should be
able to operate at a sound profit.
Thinks Future Assured.
I believe that this class of high
speed, double-track line is funda-
mentally sound and that it will gain
business rather than lose it over the
next ten years. The securities of
these double-track interurban lines,
urban transit companies, justify the
serious consideration of the investor
and should be included in broad list
of public utility holdings.
The power ana Ngnt issues race
one uncertainty, end that is the
development of adverse legislation
and unscientific rate regulation.
The soundest public service corpo-
ration in the country can be seriously
crippled by unreasonable legislation
governing it's charges for service.
The railroads and most of the trac-
ton companies have been through the
mill of this score.
Rates of Greatest Importance.
What will happen in the power
and light field no one can tell, but
the best informed specialists in this
line are considerably encouraged by
the Southwestern Bell decision. 1t is
hoped that this industry will not be
crippled by too much government,
state and municipal interference In
any event, a diversified list of pubic
utility holdings should not be affected
to any extent by scattering cases OF
unjust political rate making. More
over. the customer ownership cam
naigns now in progress should serve
as a splendid backfire or insurance
against this one danger.
X X
General business as reflected by
the Rabson chart is running at IL per
cent below normal, an Improvement
of l per cent over last Week
.EpoRT OF THE CONDITION