Evening star., 1925-11-15

for it's stocks. after all charges, but
before depreciation. has increased in
the same period from SS14,8 ,845 in 1919
to S2,272,6 ,694. The Improvement Is be-
ing continued this year as shown by
the fact that gross for the first six
months aggregated $3,524,793. COM
pared with s3.15S,412. and the net
stood at S1.267.477. against $7S6,6l9
the same period last year.
Valuation and rates had been a
constant source of trouble to the COM
pany for some years, but an agree
ment was reached with the Public
Utilities Commission at the close Of
1924, which settled such disputes and
served as a basis for the, establish
ment of rates in the future. Under
the agreement the value of its prop
critics was fixed as of January l, 1925,
at $50, 500, 900. and the allowable re-
turn on this valuation after deprecia-
ton was fixed at ~ per cent. Rates
have been adjusted on that basis. Fur
ther lowering of rates is provided for
If return in any year exceeds that
amount, and it is also provided that if
return falls below that figure rates
shall be adjusted accordingly.
Washington Rwy. & Electric's Equity.
LAS there are but $1,000 shares of
Potomac Electric common stock out
standing, the holder of 100 shares of
Washington Railway & Electric has
an equity interest in So shares of that
stock. Dividends are being paid at
the rate of S12 a year, but if the par
ent company's equity in undistributed
earnings is taken into consideration.
its earnings were equivalent before
depreciation last year to s34.76 a share
on the controlling company's shares.
Earnings this year, as indicated
above, show substantial improvement
over those of year ago, and if the
gain continues should amount to
around S55 a share on the Potomac
stock and the equivalent of about
$48.50 on the parent company's shares
after all charges but before deprecia-
ton.
THE Washington Railway and
Electric has a capitalization consist
Ing Of $19,115,350 in funded debt,
which is followed by $500, 900 in pre-
ferred stock and s6,5OO,O0 in COM
mon stock, both of 500 par value.
Last years balance sheet showed
strong current position with total
quick assets of S4.912, 900, against
current liabilities of but 1851 900 In
addition, the company had an equity
of some 100000 in the special re-
serve fund in the treasury of the Po-
tomac Electric, bringing the total of
net quick assets to $7,360.O0O. or
more than $110 a share on it's com
mon stock.
With its excellent management,
growing territory and with valuation
and rate matters satisfactorily set
tied, the future of this company looks
promising. and the high ratio of earn
in0C L.
it attractive as an investment"
Another Factor Involved.
The fact that the North American
Co. owns a substantial interest in the
carrier carries considerable weight
with recent buyers of the stock.
While this company has repeatedly
stated that it Is a public utility hold
ing company, and not interested in
active management of their affairs,
nevertheless these customers appear
to accept these statements with a
grain of salt" holding to the idea that
the Potomac Electric Power plant
would fit in very logically in the
"tying-up" program which is develop
ing SO rapidly throughout the East.
AS a part Of the great North Amer
lean system, the local lighting COM
pany would De assured OIL q very
favorable position with regard to this
development, they say.
There is. generally, a mistaken i'm
preston, particularly in New England,
that North American Co. owns rs per
cent Of Washington Railway and Elec-
trio stock. This impression Is accent
uated by certain circulars describing
the issue which, unwittingly, sheared
the preferred stock of the company,
amounting to $4,000 shares, of it's vot,
ing power. The North American Co.
does, however, own rs per cent of
the common stock and nominal
amount of the preferred, but is not
active in either market at this time.
according to their spokesman. More.
over. they refuse to verify a rumor
that they had offered "in excess of
1870" for block of 900 shares of com.
mon available in a certain quarter of
New York City, as stated by at least
three members participating in this
latest selling movement.
A New York member of the pool as
serts that Railway common stock is
selling at only four times it's earning