[Vol. 15]

Public Service Commission, Second District

Taking the company's evidence as to its passenger revenue for five months of 1917 (by deducting from the total revenue rentals and freight revenue), we find that this is equivalent to a yearly intrastate revenue of $3,979.32. It is evident, therefore, that the previous assumptions were very close to the truth. The Loop line should properly be credited with its proportion of interstate revenues as disclosed by the transfers. In making this calculation it has been assumed that the average ride of interstate passengers is from Clinton avenue and Center street in Waverly, by Clinton avenue, Pine and Broad streets, into Pennsylvania, and as far as North Elmer avenue and Cayuga street in Sayre. The Sayre point is assumed to be about the central point for employees of the Lehigh Valley. The point taken in Waverly is about half way around the loop and probably represents a greater distance than the average traveled in Waverly.

The Interstate Revenues: In apportioning the interstate revenues as between the Loop line and the interstate lines it has seemed fair to calculate it by proportionate distances. The following result is reached:

Interstate revenue, 64,679 transfers at five cents, $3,233.95.

Assumed average interstate ride: from Clinton avenue and Center street, Waverly, via Clinton, Pine, and Broad to North Elmer avenue and Cayuga street, Sayre, by map, 8,900 feet.

New York proportion of assumed average interstate ride, by map, 6,000 feet.

New York proportion of interstate revenue (6000/8900 x $3,233.95) $2,179.68.

Total annual passenger revenue to be credited to Clinton avenue line ($4,036.75 intrastate, $2,179.68 New York proportion of interstate) on basis of 1916, $6,216.43.

It will be remembered that the applicant proved only two items of operating expenses. In endeavoring to reach a fair estimate of the entire actual operating expenses, it has been assumed that the proportion of platform and power expenses to maintenance, general, and other expenses was the same for the loop as for the whole system. We reach these results:

Public Service Commission, Second District

Expenses Assignable to the Loop:

Annual cost of operating line on basis of testimony as to five months of 1917, 12/5 of $952.21.... Annual platform expense, same basis, 12/5 of $1,211.76

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$2,285 28

2,908 20

$5,193 48

Platform and power expenses entire line, as re

ported for 1916, were...

40,373 65

Total operating expenses 1916 were.

72,834 57

Assuming that proportion of platform and power expenses to maintenance, general, and other expenses was the same for Clinton avenue line (the Loop) as for the whole system, total expenses to be charged against that line would be (72835/40374 x $5,193)

9,373 37

By this process of estimating the total intrastate revenues and expenses it appears that the Loop line in 1916 failed by a very considerable amount to meet its operating expenses

It does not necessarily follow from this calculation that the company is entitled to increase its fare beyond the five cents fixed by section 181 of the Railroad Law. In order to reach any conclusion we must examine the entire operations of the corporation and for a series of years. The following shows the income account for the years stated:

Public Service Commission, Second District

[Vol. 15]

This indicates a surplus in the operation of each year except 1915. However, we find an unusual state of affairs in respect to interest on funded debt. The president of the company owns all the stock except six shares, apparently held as qualifying shares. The company has outstanding bonds to the par value of $460,000. A considerable amount of these bonds is owned by the president of the company, who has each year surrendered to the company and canceled the interest coupons. No dividends have been paid during the period covered by the above tables. Correcting the gross income deductions by adding thereto the amount of coupons each year so surrendered we reach the following result: