[PRCo] Re: [Fwd: Pittsburgh---PA---Trolleycar---Body---Repair]

[Fred Schneider]

It is you right to believe in whatever you wish.  I did not deny you that
privilege.  I was only explaining to a European how transit was created in this
country.

Just as well we should also subsidize livery stables, canals, and all other forms
of transportation that the public has chosen to ignore.  They too have their
followers.

Harold Geissenheimer wrote:

> Fred
> Thank you for your economics lesson.  I understand the history
> but do not believe in the result.  I have a BS degree in transportation
> economics.  I believe that public transit and passenger railroads
> should be owned by the public like the highways and airports and rivers
> and streets and sidewalks and parks, etc.
>
> Privatisation of rail and transit does not work.  The UK experience
> proves this.  British rail is now a joke
>
> In their day Detroit, Cleveland, Toronto, etc worked well to the benefit
> of the rider. ( So did PRC in receivership)..  It is the rider who
> should have
> good service.  PRC flopped when the bottom line was applied.
>
> We can not and should not have a profitable AMTRAK or transit system
>
> Thats where I stand.  Col Harley Swift who did the merger in Pgh was a
> trolley man, an ATE exec, and did the condemation of PRC.  We discussed
> this many times and he believed the days of private transit were over.
> I agree..
>
> The public must now vote for transit.  We are being fooled by the
> politicians who
> hate rail, favor SUV's and now BRT.
>
> PRC was adequate in receivership but the decline after 1950  was not
> inthe best
> interest of the public.
>
> Harold Geissenheimer
>
> Fred Schneider wrote:
>
> >Boris:
> >
> >You might need a more in depth understanding of how corporations are
> >financed in the United States.  We did not have a large number of tax
> >supported transit facilities in North America until after the Urban Mass
> >Transit Administration was established in the 1960s.  Prior to that we had
> >publicly owned systems in San Francisco (Jim Holland works for the Municipal
> >Railwlay), Cleveland, Boston, the New York City Department of Plant and
> >Structures, the Independent Surface Transportation Operating Authority in
> >New York ... and I'm rapidly running out of examples.
> >Toronto, Ontario, Canada also had a municipal undertaking dating, I think,
> >to 1921, which shortly thereafter took over the private company.
> >
> >Instead we had thousands of privately-owned corporations.  Some were small
> >enough that they were family owned systems ... Lancaster, Ohio and
> >Philadelphia Suburban Transportation Company (three generations of the
> >Taylor family).  PST, by the way, did have a few shares of stock in other
> >hands but very few ... I know a man who had one share and he told me he
> >wasn't appreciated when he appeared at a stockholders meeting one year.  It
> >is really the Taylor family business.
> >
> >Most American companies were owned by many people through ownership of
> >stock.  For example, if the company has 10,000 shares of stock outstanding,
> >then each share represents a 1/10,000th interest in the company.  Some
> >people might have owned 10 shares, others 50, some 1, maybe one or two
> >people owned more than 1,000 shares.  Each one of them thought, when they
> >bought the stock, that they could make money on quarterly or annual dividend
> >checks or that the value of the stock would go up and they could sell it to
> >someone else who wanted to gamble.   Each person was generally given one
> >vote for each share of stock.   But the shareholders could own an empty
> >paper bag.  If the debts to others ... to banks, to the power company, to
> >the car builders, to bond holders ... exceeds the value of the property,
> >then the stock holders have nothing.  And that often happened.
> >
> >Bonds, however, have a higher repayment liability in a bankruptcy than
> >stocks.  In the case of a bond, the company often issued bonds saying we
> >will pay you back every 3 months, a share of the money we borrowed from
> >you.  This concept is similar to a mortgage on one's house.  You pay the
> >mortgage or the bank has a right to take your house and sell it to the
> >highest bidder.    They higher risk to the stockholders is only fair
> >because, theoretically, they owned the company and therefore made the
> >decisions that affected profitibility, either by hiring the management staff
> >or establishing policy for managers to follow.
> >
> >While I'm not saying that Jim made a false statement, you need to understand
> >his claim that Pittsburgh Railways had "an horrendous number of
> >underlies which siphoned off money."  Pittsburgh Railways had more underlies
> >than any street or passenger railway in the state.  I'm not sure that is
> >horrendous but it is a fact of corporate life.  Street railway companies in
> >cities in the United States were often put together from many other
> >companies, one on this street, another that street, and so forth.  It was
> >much easier to get money by selling stock to build a line on Perrysville
> >Avenue (Observatory Hill Passenger Railway) than it would have been to get
> >money to build an entire 600 mile railways system at once.  In time it
> >became apparent that it only made sense to combine all of the little
> >companies into a bigger one.
> >
> >After 1871, a total of 752 different passenger railway corporations
> >conducted business in Pennsylvania, although not all were in business at the
> >same time.  There were  71 in Philadelphia and 199 in Pittsburgh.   They may
> >have been a horrendus number, but they represented individual companies
> >owning track, wire, ties, real estate, and sometimes cars.  They had issued
> >bonds and/or stocks in order to raise money for construction, and their
> >bondholders and stockholders had every right to receive compensation for
> >their property when it was rolled into a bigger company.  In most cases,
> >those properties were not sold outright to the larger company.  Instead they
> >were more likely to be leased on a long term basis just as you would lease a
> >factory or an automobile, and use it but not own it.  In Pennsylvania, these
> >lease payments were generally a fixed and unchanging percentage of the
> >original construction costs ... 3% or 5% or 7% each year.  Of course, we
> >need to consider inflation, which, over time, actually reduced the inherent
> >value of the money the underlies were receiving.  Cost-of-living riders were
> >not built in.   And each underlyer used these payments from the larger
> >company to pay off their bondholders and stockholders.   I would imagine
> >that a lot of the major railways saw leasing a company and paying it off
> >with cheaper dollars to be a great way of doing business.
> >
> >The larger companies were often unable to meet the contracted obligations to
> >the smaller underliers, particularly after World War One when the use of the
> >automobile because much more common.  What generally happened was a
> >bankruptcy of the larger company, which resulted from a failure to pay its
> >bills (including the agreed upon payments to the underlying companies),
> >which in turn bankrupted the underlies.  So what happens next.  There is no
> >obligation in the United States to pay stockholders if there is no money to
> >pay them.  But they are the true owners.  The bondholders got first dibs on
> >the cash, and the stockholders found they owned a worthless railway.
> >Therefore, underlying companies tended to be dissolved and their assets
> >merged into the larger company as a result of these bankruptcies.
> >
> >How often did this happen?  Here in Lancaster PA all of the underlies on
> >record in were dissolved in the 1898 bankruptcy, and a new company emerged
> >owning all the track, and the stock holders of that company owned that
> >company.  Another 100+ miles of track was added between 1898 and 1909, and
> >another 12 underlying companies were created.  They were rolled into a third
> >major company in a bankruptcy in 1931.  The same thing happened in
> >Pittsburgh in the 1917 and 1938 bankruptcies.  Philly had at least one major
> >failure in 1938.  There were two Johnstown Traction Companies, separated by
> >a bankruptcy.  You get the picture.
> >
> >There were also some non-operating companies involved but they do not appear
> >in the state Department of Internal Affairs railway reports.  One example is
> >the L. A. Thompson Mountain Railway Company, which, to use Jim's term,
> >"siphoned" money out of Philadelphia Rapid Transit Company.  L. A. Thompson
> >built roller coasters; this particular railway was in Willow Grove Park.  It
> >was dissolved in the 1938 bankruptcy.  From a more pragmatic viewpoint, I
> >doubt that such financial gimmicks had little affect on latter transit
> >financing.  Many amusement parks were sold off to park companies early on
> >because the railways rapidly found that they [the parks] put an incredible
> >drain on the railways' management and executive talent during the summer
> >months.  I can only think of two parks still owned by railways in
> >Pennsylvania when the railways went out of business:  Woodside Park owned by
> >Fairmount Park Transportation Co. in Philadelphia, and Dorney Park, owned by
> >Allentown and Read Traction Co.  Hershey Park was not owned by the trolley
> >company but both were owned, along with the candy company, the department
> >store, the hotel, the theater, and the arena, by Milton S. Hershey.  Hershey
> >and Dorney Parks are still in business.
> >
> >Jim Holland wrote:
> >
> >
> >
> >>In keeping with Fred's comments on formation of PAAC
> >>({[pat]})  I searched for some info we discussed.
> >>This  *may*  be One of Many dealing with the topic.
> >>
> >>-------- Original Message --------
> >>Subject: Pittsburgh---PA---Trolleycar---Body---Repair
> >>Date: Sun, 26 Aug 2001 15:34:31 -0700
> >>From: Jim Holland <pghpcc at pacbell.net>
> >>Reply-To: pghpcc at pacbell.net
> >>Organization: Holland  Electric  Railway  Operation  --  St.-Petersburg
> >>Trams Company (SPTC)  *O*--Scale  Imports  --  mailto:PGHPCC at pacbell.net
> >>To: Dennismk1 at aol.com
> >>CC: pittsburgh-railways at dementia.org
> >>
> >>Good Morning!!
> >>
> >>        Most comments about Pittsburgh go something like
> >>this:::::::  "excellent mechanical and electrical maintenance
> >>but legendary poor or non-existant body maintenance."
> >>
> >>        While there is an element of truth to this, it
> >>seems that this statement is overly--exaggerated and to
> >>an extreme.  This might be true of PRCo in the last several
> >>years of operation, but it can hardly be a good qualifier
> >>of the bulk of transit service rendered to Pgh. by PRCo.
> >>
> >>        Here is a timeline of significant events
> >>affecting PRCo:::::::
> >>
> >>1938.05.11 (May--11)  --  PRCo enters bankruptcy  *again*
> >>        (emerged from previous bankruptcy in 1922.)
> >>
> >>1952  --  PRCo emerges from 15--years of Bankruptcy
> >>        proceedings.
> >>
> >>1953.06.22  --  The Allegheny Conference on
> >>        Community Development released its second citizens'
> >>        mass transit study; it recommended creation of a
> >>        transit authority to acquire and unify bus and
> >>        trolley lines in the county.
> >>
> >>1954.12.05  (December--05)  --  The County commissioners made
> >>        public proposed legislation, drafted by a seven-member
> >>        citizens' committee, for creation of a county-wide
> >>        public transportation authority to acquire and
> >>        consolidate bus and trolley lines.  The legislation
> >>        required approval of voters in a referendum scheduled
> >>        for primary election of 1956.
> >>
> >>1964--April  --  PRCo ceases to operate Pittsburgh transit and
> >>        is replaced by the Port Authority of Allegheny County
> >>        (PAAC) in this capacity, which agency also took over
> >>        independent bus lines within the city.
> >>
> >>        In his report below, Mr. Dennis M. Linsky indicates
> >>that mechanical condition of the equipment was very good and
> >>that the body work was good; track and overhead were quite
> >>good on a majority of the system.  I have learned from other
> >>sources that Trustees during the time of the bankruptcy did
> >>a fair amount of track removal and essentially purchased
> >>all the PCCs trying to keep the system intact rather than
> >>to make changes.
> >>
> >>        Movies taken by Mr. Roger Jenkins (ROGERTROLLEY)
> >>in the latter 1950s confirm this.   Roger's movies are
> >>exceptional for their clarity, esp. considering 8mm or even
> >>super--8.   Car numbers are crisp and distinct the majority
> >>of time  --  usually one has difficulty seeing a fuzzy
> >>trolleycar let alone a trolleycar--number on 8mm!!
> >>The PCCs of this era, as they are seen in Roger's movies,
> >>appear to be in quite good condition.
> >>
> >>        But there was still a very heavy Black Cloud
> >>hanging over the Railways Company (pollution abatement
> >>removed the same from the rest of the city but was not
> >>successful in removing that Black Cloud from over the
> >>Railway!)   Fifteen years of bankruptcy, a city government
> >>generally hostile to PRCo, a widely scattered system mostly
> >>through low-density neighborhoods, an horrendous number of
> >>underliers which siphoned off money (this was rectified in
> >>the 15--year bankruptcy,) a recommendation for a public- and
> >>county-wide transit system in 1954 which surely had been
> >>discussed locally not long after WW-2, the formation of
> >>the Port Authority of Allegheny County (PAAC) in 1956 as
> >>a legal entity, hostility towards trolleycars in general,
> >>and a very uncertain future certainly combined to discourage
> >>PRCo from investing any more than necessary in a system which
> >>would be wrested from it in short order.
> >>
> >>        PRCo equipment and infrastructure was in quite
> >>good condition in 1950 and remained such with minimal
> >>maintenance through this decade.  But once a system like
> >>this starts going bad in a big fashion, it is near impossible
> >>to stop.  Such was the decade of the 1960s and this was only
> >>accelerated by the attitude of PAAC which wanted to rid Pgh.
> >>of the unwanted notoriety as the larges operating trolleycar
> >>museum in the nation  --  and unfortunately, PAAC succeeded.
> >>
> >>        Thus the horrible image of body maintenance on
> >>trolleycars in Pittsburgh is from the 1960s  --  a time
> >>after which PRCo knew for certain that its days of operating
> >>transit were over.   While PRCo certainly did not have
> >>the best in body maintenance, it probably was not the worse,
> >>either.  The poor body maintenace on PRCo equipment reflects
> >>on the very, very end of PRCo--transit and is hardly
> >>representative of the bulk of PRCo service to Pgh.
> >>
> >>-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->--
> >>
> >>From: Dennismk1 at aol.com
> >>    To: Dennismk1 at aol.com
> >>
> >>Re: "SMOKY CITY" AND PHILLY NEWS AUGUST AND SEPTEMBER, 1953
> >>
> >>    Good Afternoon, Trolley Folks:
> >>
> >>        It was 48 years ago when the mechanical and
> >>electrical maintenance of Pittsburgh's PCC cars seemed
> >>to be excellent.  Most PCC's rode extremely smoothly,
> >>even on PRW; only one PCC was extremely bouncy.
> >>        Apparently, a few of the older PCC's have been
> >>rebuilt with drum brakes, as cars 1231, 1249, and 1272
> >>were seen with this equipment.    Body maintenance was good,
> >>but the exterior paint didn't look as good as in Washington,
> >>St. Louis, or even Philadelphia and the cars were extremely
> >>dirty inside.  The most frequent comments HEADWAY RECORDER
> >>has heard from passengers was about the dirtiness.
> >>        The old cars seemed to be in fairly good condition,
> >>although most appeared to leave the barn for their rush-hour
> >>runs without having been cleaned inside and were very dirty.
> >>        The large number of shuttle routes converted to buses
> >>since Pittsburgh Railways emerged from bankruptcy plus
> >>declining patronage have permitted all base service, except
> >>on 2 lines requiring double-end cars (and which were soon
> >>to be bustituted), to be operated by PCC cars.  But 20%
> >>of the rush-hour service was operated by single-ended,
> >>high-speed conventional cars (the 3800's)-->>-->
> >>[incorrect  --  please see notes above.]
> >>        The track on a typical line seemed to be in good or
> >>excellent condition on over two-thirds of the line, but
> >>in fair or poor condition on the remainder.  Two routes were
> >>exceptions: 88-Frankstown operated entirely over street track
> >>that was in excellent condition and appeared to have been
> >>recently rebuilt while 31-Sheridan-Ingram operated entirely
> >>over track in poor condition despite some patchwork.
> >>        The most unique route, aside from the scenic
> >>21-Fineview, was 65-Munhall-Lincoln Place, which operated
> >>almost entirely over single track on city streets with meets
> >>controlled by Nachod signals.
> >>
> >>Very Sincerely,
> >>
> >>    Dennis M. Linsky
> >>    1350 East 5th Street, Apt. 3P
> >>    Brooklyn, NY   11230-4686
> >>    email:  Dennismk1 at aol.com
> >>    8/26/01
> >>
> >>-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->-->--
> >>
> >>¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
> >>
> >>James B. Holland
> >>
> >>Holland  Electric  Railway  Operation
> >>    "O"--Scale  St.-Petersburg Trams Company Trolleycars  &
> >>        "O"--Scale  Parts  mailto:pghpcc at pacbell.net
> >>        Pennsylvania Trolley Museum (PTM) http://www.pa-trolley.org/
> >>    Pittsburgh  Railways  Company  (PRCo),   1930  --  1950
> >>N.M.R.A.  Life member #2190; http://www.mcs.net:80/~weyand/nmra/
> >>
> >>¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
> >>
> >>
> >
> >
> >
> >
> >
> >