[PRCo] Re: Sharpsburg sells power facilities

[Edward H. Lybarger]

I don't think we have any way of learning this, Dwight.  The bonds were
issued in 1910 and matured in 1960.  

I would not be surprised to find a lot less water in this company, if only
because they did not have the huge amounts of obsolete property (such as
horsecar and cable car infrastructure and franchise payoffs) to hide.  And
because the Coke Region was a rapidly growing area with good times forecast
as far as the eye could see (they couldn't see the automobile yet), West
Penn did not have to sell bonds at a huge discount like C. L. Magee's
companies did.  The railway stock was held by the parent, whose stock was
also strong, so no shenanigans were really needed.

In 1916, nothing had changed...all the companies were strong.  It was after
1920 that Railways couldn't pay all the freight once rider numbers began to
decline.  Railways got Power stock in 1916 because they had owned a lot of
little electric companies, purchased when they were the strong sibling in
the family and Power was just getting started.  The value of the capital
investment depreciated significantly after the Depression hit, but they were
obligated to pay the indebtedness anyway.  The company's way of doing this
most effectively was to stay in business and get as much revenue as possible
from the customers and taking the normal depreciation expense, using the
Power dividends to make up the shortfall.  What was left over was passed
through to the parent as Railways dividends.  This was all much cheaper than
writing off the whole Railways investment in, say, 1932.

-----Original Message-----
From: pittsburgh-railways-bounce at lists.dementia.org
[mailto:pittsburgh-railways-bounce at lists.dementia.org] On Behalf Of Dwight
Long
Sent: Friday, September 03, 2010 3:22 AM
To: pittsburgh-railways at dementia.org
Subject: [PRCo] Re: Sharpsburg sells power facilities

Ed

I did know that--but only because you had told me a while back!

I would be very interested to know what was the relationship between the
face value of the bonds of which you speak and the true value of the railway
properties in 1920, or even at the time said bonds were issued.

WP may have been an exception, but there quite often was a very, very large
amount of "water" in the bonds--let alone the stock.  

It was also not uncommon, when separation of railway and power facilities
into separate corporate entities occurred, for the railway company to be
lumbered with a lot of sunk (and by that time largely useless) capital
investment which in today's world might be apportioned much more, or even
wholly, to the power enterprise.  Again, I do not know if that were the case
with WP, but it would be interesting to find out.

Dwight

  ----- Original Message -----
  From: Edward H. Lybarger
  To: pittsburgh-railways at dementia.org
  Sent: Thursday, 02 September, 2010 19:46
  Subject: [PRCo] Re: Sharpsburg sells power facilities


  And you probably didn't know that Sam Insull was president of the West
Penn
  empire in the mid-teens.  After the railways' parent company emerged from
  bankruptcy proceedings, largely on the strength of the railway earnings
(bet
  you didn't know that, either), he served as president for a relatively
short
  time.  His is the signature all over the document formalizing the 1916
  reorganizations of Railways and Power (in which Railways was granted the
  large block of Power stock that kept them alive well beyond 1920, when
they
  last earned their bond interest); we have a copy of same in the PTM
Library.
   
  Ed
    _____  

  From: Fred Schneider [mailto:fwschneider at comcast.net]
  Sent: Thursday, September 02, 2010 7:11 PM
  To: Pittsburgh-Railways at Dementia.Org; Matthew R Barry; Ed Lybarger
  Subject: Sharpsburg sells power facilities



  Why the _______ is this item important?   Well, most power companies were
  derivatives of the railway industry.   You couldn't find customers for
your
  streetcars but they were able to find people who wanted light bulbs in
their
  homes.   The only major electric railway property in Pennsylvania that was
  not connected to a power subsidiary?  Philadelphia Rapid Transit.

  Pittsburgh Railways, Duquesne Light and Equitable Gas and San Francisco's
  Market Street Railway were one and the same company.   West Penn Railways,
  Wheeling Traction, Monongahela West Penn Public Service, Potomac Edison,
  Hagerstown & Frederick Railway and the Chambersburg, Greencastle and
  Wayneboro Electric Railway were all under common ownership.   In the east,
  Pennsylvania Power and Light, UGI, Conestoga Traction, Lehigh Valley
  Transit, Williamsport Passenger Railways, Jersey Shore Electric St. Ry.;
  Lykens and Williams Valley Ry., Valley Railways (Cumberland County), and,
  briefly, Lancaster, Ephrata and Lebanon St. Ry. were the same alphabet
soup.
  And were not Altoona and Logan Valley and Penn Elec related at one time?
  There is absolutely no coincidence that today's Metropolitan Edison and
the
  former Reading Traction and Light / Reading Street Railway have the same
  foot print.   But why is Met Ed in York?   Well, when Sam Insull's
  Middlewest Utilities went broke in 1939, Met Ed bought the power
facilities.


  You didn't know that York Railways was related to CSS&SB, CA&E, CNS&M and
  the Indiana Railroad?   Well it was.   

  You may also remember that Harold Cox once described the paint on Reading
  streetcars at "red and gray in disarray."   Why was it so similar to
  Southern Penn and Delaware Electric Power Company and Trenton?   You got
it.
  At one time they were same company.   And Trenton NJ was also in that
stew.


  Now does it make sense to include the power company history?

  By the way, in the attached file, the indents match the newspaper.   But I
  got tired of feeding you paragraphs with one sentence because journalists
  write for people with a fourth grade education.   I combined sentences
with
  a similar topic to make reading easier on the printed version below.

  (Dave:  one of the guys on the Pittsburgh list started scanning the
on-line
  files of the Supress ... prompted me to do some of the same.  fws)

  http://news.google.com/newspapers?id=vMEbAAAAIBAJ
 
<http://news.google.com/newspapers?id=vMEbAAAAIBAJ&sjid=Ck8EAAAAIBAJ&pg=7496
  %2C2115371> &sjid=Ck8EAAAAIBAJ&pg=7496%2C2115371

  Pittsburgh Press,  Thursday August 22, 1963, page 3 (digital) or page 5
  (print)

  Sharpsburg Votes to Sell Power System

  Council Okays Duquesne Light's $500,000 Offer

  By ROGER W. STUART

    Sharpsburg Borough Council has voted 6-to-1 to sell its light and power
  system to the Duquesne Light Co. for $500,000. 

     Borough officials say customers will plug into the same company's
circuit
  at a "substantial savings" if the Public Utility Commission (PUC) approves
  of the sale.

      Council President Michael Urso said last night he expects PUC action
in
  30 to 90 days.

      Duquesne Light will purchase only the service rights to Sharpsburg's
  2000 residential, commercial and industrial light and power users.     The
  borough will retain possession of its power plant, which has been in
  operation since 1939, and the land it is on.

      Voting to sell to Duquesne Light were President Urso and Councilmen
Dom
  DeBonis, Joseph Green, Charles Morelli, John Susi and Oresti Panza.
  William Neff was the lone dissenter.   Mayor Chester Zygello has not yet
  signed the town ordinances paving the way for the sale, but he has not
  indicated he will veto them.   If he should, however, council wil have to
go
  through the formality of passing the measures again   But Mr. Urso said
that
  would cause no problem because he necessary two-third vote to override a
  veto was received the firs time.

      The "battle of the power plant" hit a fever pitch four years ago when
  council voted for $1,500,000 conversion of the plant from coal to a diesel
  operation.   But the conversion never took place.   It was blocked in the
  courts until last March when a planel of judges rejected the prolonged
legal
  battle by a group of borough taxpayers to halt it.   By that time, the
  complexion of council had changed and that body no longer favored the
  switch.

      At one time, the borough's high rates were blamed for driving at east
  one industry out of the borough and preventing another one from
establishing
  there.   Sam DeFazio, chairman of Taxpayer's league hopes the sale of
  service rights, will help entice industry back into the borough.   He
  pointed out as did Mr. Urso, that the borough's plant and approximately 5
  acres of accompanying land is now prime industrial property.