[PRCo] Wheeling, Sharpesburg, et al
Fred Schneider
fwschneider at comcast.net
Sat Sep 4 19:08:38 EDT 2010
Regarding Wheeling ... Wikipedia, which I don't trust for something controversial like the history of NCL but is OK for less flamboyant subjects, shows that Wheeling's population peaked in 1930 at 61,659 and then began to fall. Today its under 29,000. Steubenville held up until 1940 and then crashed (it peaked at 37,651). Wikipedia has no old figures for Moundsville, Belair, Shadyside, Warwood or any of the smaller communities.
The point I want to make here is that the peak population year here is earlier than most cities. City populations usually drop after 1950. Wheeling drops after 1930. That is even earlier than the Fayette County PA peak (1940).
As a matter of peripheral interest, Ohio County, WV is now down to about 44,000 people ... about a third less than the city of Wheeling used to have.
Wheeling-Pittsburgh Steel is down to 3,300 people today with no plants in the immediate area. It is today Russian owned!
http://en.wikipedia.org/wiki/Wheeling-Pittsburgh_Steel
Perhaps West Penn didn't like drying out the shops in Wheeling after floods. Remember that marker on Wheeling Island about 15 feet up on the side of one of the buildings showing where the 1936 flood crested? (That flood was 55.2 feet). Using that as a guide, the 1907 and 1913 floods would have been over the roofs of the cars in the car house and shops on Wheeling Island. There were a whole lot of floods over 40 feet in Wheeling.
http://wheeling.weirton.lib.wv.us/history/events/floods/floods.htm
I suspect that the Depression came early to Wheeling but perhaps it is my imagination. My father graduated from Carnegie Tech in 1930 and spent that summer working for AT&T's Long Line's Division stringing telephone wires across the mountains of Pennsylvania. In the fall he was working in Wheeling. Then the layoff notice came. The phone company no longer needed him. It was several more years before he could find work with Gulf Oil. (I guess Sam Lybarger was lucky to have a father in law that took him and Charlie Shauck was lucky to find Pittsburgh Railways and put in 35 years. I think they might have all been in the same class at CIT.)
If the population peaked in 1930 and then began to decline, one would suspect that then, as now, the politicians put the squeeze on anyone they thought had money in the 1930s. As the Depression deepened, perhaps they were on Wheeling Traction to help pave streets. Remember that our industrial cities had some of the worst unemployment in the nation; it was the Detroits, the Pittsburghs, the Akrons, the Clevelands, the Wheelings that really suffered. If you think its bad now, go back and look at the census data from 1930 and 1940. In 1940, Pittsburgh still had 30% unemployment. At least the small farmer with an unencumbered farm could struggle. Towns like Lancaster, PA, that lived on an apparel and textile and shoe economy and farm economy in the Depression didn't even know what the Depression was. Maybe West Penn simply couldn't handle multiple railway systems without compromising the profitability of the power company?
But it's academic anyway. In a six more years the public utility divesture act would have made it possible to ditch Wheeling anyway!
On Sep 4, 2010, at 1:41 PM, Dwight Long wrote:
> Ed
>
> I accept your theory of the WP Uniontown cluster bustitution as a very plausible explanation. Perhaps the truth lies somewhere between--they (or at least some factions within the company) wanted to stay in the transport business, but they also knew that the bus market would permit sale of those assets quickly should the actuality suggest exit from the market. Of course their reputation for excellent maintenance would be a selling factor if they were to dispose of the units. All of this, of course, came true. Whatever drove their decision, it worked out for them in the end.
>
> I learned some additional information about Wheeling Traction (and Panhandle) in the research I did for the (still unreleased) Seashore book on that property. There is far, far more that I wished to learn but was not successful in doing. I pretty well plumbed what was available in the Wheeling libraries and some other local sources, and I had Frank Tosh (RIP), who had excellent relations with the West Penn archivist in Connellsville, research that facility--to no avail. The primary source which I have not explored is the W.Va. state records in Charleston.
>
> WTC was more of a suburban than city operator. They had but two routes, North and South Island, that could really be called city or urban routes. The others were either interurban (Panhandle) or suburban in nature, and in both cases large stretches of PRW were utilized. Of course they went on the street in the suburban towns they serviced. The Wheeling proper operations were unusually expensive in the track replacement and maintenance areas because they were dual gauge.
>
> I learned (and this actually may have came from you--would have to dig out the file to be sure) that the parent WP company had the financial wherewithal to effect a refinancing of the WTC bond issue in 1931. They chose not to. What I do not have, and we may never obtain, is their detailed P&L for those years and any projections they made for the future. Surely with their astute management they would have done a best case-worst case scenario--all we know is that the results were unfavorable.
>
> The employees got a fantastic deal on the WTC assets, and with the low capital investment involved plus perhaps some greater "in-kind" work effort than might have obtained had a distant corporate ownership prevailed, they were successful in keeping the enterprise afloat for many years--and as a rail operation at that, through the Second World War. (With the exception of the outer end of the Moundsville line--a victim of highway construction). However, the profits and financial structure would not permit acquisition of modern (PCC) rail cars, so the inevitable bustitution started right after the war and the cars were finished in April 1948.
>
> But as you state, we still do not know the basis for WP's decision to jettison the thing, and it would be most instructive to find out--if we ever could.
>
> Dwight
> ----- Original Message -----
> From: Edward H. Lybarger
> To: pittsburgh-railways at dementia.org
> Sent: Friday, 03 September, 2010 19:53
> Subject: [PRCo] Re: Sharpsburg sells power facilities
>
>
> Dwight is extremely accurate in his comments about managing the transit
> business and especially so in the discussion of NCL. They knew how to run
> their business profitably, not emotionally. West Penn used many of the same
> principles, which are really common sense, and in addition had a strong
> desire to actually provide service, whether it be electric or
> transportation, to its customers. They were its neighbors, and its
> employees' neighbors, after all.
>
> I'd like to know more about the whole Wheeling situation. Why was it
> profitable to deep-six WTC? What was the value of the bonds; what were the
> assets of the company; what was the condition of the physical plant; what
> was the possibility of making a profit? It was an urban operator; West Penn
> always had problems with towns because of street maintenance and avoided
> them in new construction after about 1907. [They went to suburban Masontown
> in 1907, were in Brownsville in 1908 only because of an earlier franchise
> requirement, and avoided street running between Leisenring and Uniontown via
> Phillips, including the bulk of the entry into Uniontown.] Did Wheeling not
> have critical mass? Did it have labor issues? West Penn didn't own
> Wheeling Electric, so it wasn't a primary service area. After they let WTC
> go, they still held on to PanHandle and SW&W through the '30s until their
> bonds came due, at which time they threw in those towels. Why not earlier?
> There's so much I don't know that I'd like to, and there aren't enough
> years!
>
> Cash flow was everything. Depreciation was not a real expense because there
> was no intention of renewing anything after 1930, but it helped them
> taxwise. Railways was, as far as I can tell, always cash-positive. After
> they traded their Power stock for the parent's assumption of the bonded debt
> in 1949, they simply reduced maintenance to reflect receipts. They
> regularly reported profits to PA's DIA, even in 1952.
>
> I believe that the buses were a sincere final attempt to remain in the
> transportation business. It was an instinctive thing for them; they didn't
> know how fast the automobile and the unemployment would eat away at their
> base. The expense was minimal; they financed the buses through Yellow Coach
> Acceptance Corp. and had no trouble disposing of them in 1953 when no more
> profits were possible. [The last transit vehicles that were purchased for
> cash were the 830s: originally ordered by the parent, they were titled to
> West Penn Securities Department, Inc. and leased to Allegheny Valley Street
> Railway and later West Penn Railways, who bought the fully-depreciated (to
> residual value) cars in 1944.] The original main line abandonment
> application called for West Penn bus substitution, but the application was
> amended to remove that provision. Other companies then applied for the
> rights. Fayette Coach got the main line route but quit in 1958. Lincoln
> Coach took Irwin-Greensburg as part of the Pittsburgh-Greensburg service,
> and I believe it is still a functional route operated by Westmoreland County
> Transit Authority. I don't think the Mountain View Trailways service to
> Latrobe survived, though the company has. Brownsville and Masontown
> sucessor bus service didn't do well.
>
> All of PRC's stock was dewatered in the 1950 reorganization, when all the
> underlying companies were finally put out of their misery (and everyone
> else's, as well). The new company had no cash, no credit and no debt, and
> in the face of rider declines did a remarkable job of hanging on until PAAC
> took over. Once the transit property was gone, Pittway was a very
> successful company in its own right, and was merged into Honeywell in 2000.
>
> The ancient powerhouses West Penn acquired disappeared early, and my guess
> is that their nominal values were written off in a timely manner. The value
> WP was buying was customers, not plant, at this time, though such of these
> facilities that remained into 1916 would have gone to Power, not Railways.
> The latter even sold the Connellsville Power Station to Power, and bought
> their electricity thereafter.
>
> West Penn is a fantastic and fascinating study. They did everything with
> precise (and usually unserdtandable) logic, and it was one of the few
> streetcar companies never on the wrong end of a bankruptcy. And as I
> demonstrated in my presentation to CERA a year ago, it was NOT your basic
> country trolley!
>
> Ed
>
> -----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 12:04 PM
> To: pittsburgh-railways at dementia.org
> Subject: [PRCo] Re: Sharpsburg sells power facilities
>
> Ed
>
> Nothing in what you surmise seems at odds with impressions I have of WP,
> which always seemed to be a prudently and conservatively-run company.
>
> There was an alternative to continuing to pay bond interest, and that was
> the one WP took with WTC--let the bonds go into default. That would, of
> course, have ultimately resulted in a receivership and reorganization of
> Railways. The WTC case shows that WP was not reluctant to take this drastic
> step, which could have meant losing all their investment in the transport
> side of the business, where that avenue appeared to them to produce the
> better financial results from an overall corporate perspective.
>
> What WP, as many transit companies (including St. Louis Public Service, an
> NCL-controlled company) did, was effectively to "run the (transport)
> business for cash" for as long as cash flow covered operating expenses,
> taxes and interest. In this mode, depreciation becomes just a tax-offset
> item and not a real expense. The business, after the onset of hard roads,
> could not make enough money to exist on a long-term basis with provision for
> replacement of the equipment, so no need to set aside any funds for same!
>
> I recall your saying that on a cash basis, Railways was positive until
> around 1950?? By then they could read the trend lines and the abandonment
> petitions started.
>
> It would be interesting also to have been a "fly on the wall" in WP strategy
> sessions around that time. Did they really think that operating motor buses
> in lieu of trams was going to be a profitable line of business in which they
> wanted to be long term, or was this just "window dressing" to grease the
> skids for their complete exit from the transit business? The buses didn't
> cost all that much (for a company of WP's financial capability), they could
> readily be sold on the transit market later (and were), and WP could then
> say to the regulators "Look, we tried to preserve transit for our patrons,
> but it is a hopeless cause and you must let us out of this obligation." I
> suspect the latter. When the main line abandonment came in 1952, there was
> no offer to replace the cars with buses (there may have been with the
> original 1951 petition, but if so, it was removed by the time the cars
> actually came off).
>
> Although most tram enthusiasts view NCL as an instrument of the Devil
> himself, in actuality, this is the same way they operated their
> properties--as prudent business people would. It is highly unlikely that
> they would ever have re-invested in tram cars, but as long as they had them
> and could operate them on a cash-positive basis, they were quite happy to do
> so. I use St. Louis as an example of this because I have personal knowledge
> of their philosophy there, but the results in, say, Baltimore and Los
> Angeles support the proposition that they adhered to the same theory.
>
> And, closer to home, C.D. Palmer and Clyde Ligo ran PRC on the same basis.
> But, like NCL, they did not have a power business to muddy the accounting
> waters. They were (or until the last years, in the case of PRC) pure
> transport plays, most if not all of which had been "de-watered" by
> bankruptcy reorganization.
>
> While as you say it may not be possible to do a recasting of WP's financial
> structure at this late date, if one could, it would be interesting to see
> how close Railways was to the NCL or PRC model and how much bond interest
> they did have to pay on bonds whose face value was in excess of the true
> value of the transport assets that Railways owned. You may well be right
> that it was not much, given the much earlier time of the corporate
> reorganization and its circumstances. However, there must have been quite a
> few obsolete powerhouses--or at least their sunk cost--acquired with all
> those underliers! Was all of that passed up to Power? That's the sort of
> thing that would be interesting to explore.
>
> Arcane but fascinating stuff about which most enthusiasts never think. You
> are one of the few that has a grasp of the subject!
>
> Dwight
>
>
> ----- Original Message -----
> From: Edward H. Lybarger
> To: pittsburgh-railways at dementia.org
> Sent: Friday, 03 September, 2010 10:00
> Subject: [PRCo] Re: Sharpsburg sells power facilities
>
>
> 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.
>
>
>
>
>
>
>
>
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