Evening star., 1938-08-31
TRANSIT RULING
HELPS COMPANY
$24, 100000 Value Is Likely
to Strengthen Position on
Future Rates.
By DONALD B. HADLEY.


trict of Columbia means very little. If
ANYTHING, so far as the immediate out
look for earnings is concerned, it
should be most helpful to the credit
standing of the company since it places
It in a much stronger position to
negotiate rate changes which may
come up from time to time in the
future.
The Public Utilities Act provides
that local utility companies shall be
permitted to charge such rates for
service as will give fair return on
fair value At present the Washing
ton Gas Light Co. is operating on
basis of 6ia per cent return, and
this would doubtless be regarded AS
Transit Co. If the company we're
able to earn this rate on the valua-
ton just handed down, it would
amount to s1,56O,ooo annually.
After deducting approximately
100000, which represents annual in
terest charges on the company's out
standing Indebtedness, there would be
S860,000 available for the stock, which
is equivalent to $3.50 per share on the
100000 shares of stock outstanding
Competition Is Factor.
There is little likelihood, however,
that the company will be able to earn
this amount at any time in the near
future. While the law limits the
amount public utility may earn, there
is no guarantee that it shall earn the
amount authorized. Electric light and
gas companies usually earn the maxi
mum amount to which they are en-
titled under the law. but this is not
necessarily true in the case of a street
railway company which has to COM
pete with other modes of transporta
ton. Also the question of labor costs
and social security taxes are much
more burdensome to street railway
companies than to other public utll-
aties.
The capital structure of the Capital
Transit Co. is relatively simple. con-
sisting of 240,000 shares of capital
stock of Sl00 par value, making
total of s24,ooO,ooo, and approximately
Sl4,O00.O00 of bonds. The total cap
italization is. therefore, approximately
100000 On the basis of the val
uation Just handed down, there is an
equity of sl,7l4 for each $1,000 bond,
while the equity for the stock amounts
to slO,000,000. or S4l66 per share for
each of the 100000 shares outstanding.
Stationer Sales Gain.
Washington statloners recorded a
July sales increase of II per cent over
the same 1887 month, the National
Stationers' Association disclosed today
The July showing of the four re-
porting stores in Washington con-
trasted sharply with decrease of 9.34
per cent in sales of 18 stores in the
third district, comprising Pennsyl-
ranla, Virginia. New jersey. the Dis
trict, Maryland and Delaware.
Stationer sales for the entire Nation,
With 155 firms reporting. were down
pl3 per cent from a year ago. In
tuly 40 firms recorded increases, 3
we're unchanged and 1o3 showed de-
tlines. This was a better record than
in June, when only "A showed in
creases.
Charles P. Garvin, general manager
of the association, cited the gradual
improvement and forecast that Sep
tember will bring a much more favor
able comparison.
Stationers over the Nation are pre-
pairing for the Stationers' Cavalcade,
one of the most original programs
ever sponsored by the association,
which will be held at Palmer House
in Chicago September 26-29.
Georgetown Gas IS Rise.
Georgetown Gas 5 per cent bonds
climbed to new years high of 116$.
in three $1,000 transactions following
the call on the Washington Stock
Exchange today The previous high
for the year and the last price was lis.
Before the call, six 10-share lots
Of Washington Railway & Electric pre-
ierred moved at 1872, unchanged
from the last previous sale, which
equaled the years high.
Peoples Drug Stores preferred also
turnover of five shares.
Treasury Issue Offered.
The Federal Reserve Bank of Rich
mond has sent out the following notice
to member banks: The Secretary of
the Treasury gives notice that tenders
ere invited for Treasury bills to the
amount of sl0O, 100000 or thereabouts.
u-i1 bo hi t,o
sold on discount basis to the highest
bidders. Tenders will be received at
the Federal Reserve Banks of the
branches thereof up to o'clock pm
Eastern standard time. on Friday, Sep
tember 2. 1898. Tenders will not be
.eceived at the Treasury Department
in Washington. The Treasury bills will
be dated September 7, 1898, and will
mature December 8, 1888 Payment
must be made on September 7, 1888"
Response Is Nation Wide.
A vigorous and able presentation of
the bankers viewpoint on loans, made
recently by Clarence F. Burton, presi-
cent of the City Bank of Washington,
In letter to The Star, has attracted
Nationwide attention.
Mr.. Burton has received more than
800 letters from bankers, bank direc-
tors and businessmen representing all
sections of the country. The letters
were unanimous in praise of the Cap
ital bankers answer to a columnist's
criticism of loan policies.
The letter was reprinted in Banking,
A. B. A. journal; the American Banker
and many other banking magazines
elso by the Financial Advertisers As
sociation and the District of Columbia
Bankers Association. Mr.. Burton,
who has just returned from a two
weeks vacation in Maine, believes the
response to his letter illustrates the
need for bankers to define clearly their
policies and problems before the pub
lie In order to avoid misunderstand-
ings and destroy false impressions.
Norman E. ToWson, assistant treas