[PRCo] Re: Port Authority approves huge cuts in bus, trolley service | Allegheny Co. News - WTAE Home

[Edward H. Lybarger]

When West Penn Railways was assembled from its underliers, it came into
possession of substantial power generation capacity.  West Penn Power was
assembled from other underlying companies, and had a separate corporate
existence apart from Railways, although under a common parent.  In 1914, the
parent entered bankruptcy due to the shenanigans the bankers from McKeesport
(the Kuhns) played in buying western lands that couldn't be farmed, dammed
or sold, etc.  Two years later the parent emerged from receivership ON THE
STRENGTH OF THE RAILWAYS COMPANY'S EARNINGS.  That was probably the first
and only time it ever happened in the trolley industry!

But I digress...also in 1916 the West Penn companies were reorganized to
better match their corporate purposes, and in the process, Power took over
the generation and supply properties.  In return, Railways got 833,000, give
or take, shares of Power common stock, which of course was paying a
dividend, as was Railways at the time.  Naturally, most of those internal
dividends made their way to the parent.  But after 1920, Railways was no
longer able to pay its debt service out of the fare box, and instead relied
on the dividend income to pay the interest on the due-in-1960 bonds.  This
is why Railways always showed a profit, even in the darkest days of the
Depression.  It was clear to the company as early as 1930 that they would be
getting out of the streetcar business; they just didn't know when.  But as
long as the Railway company wasn't costing anything in the way of capital
expenses, the powers that be figured that the trolley company represented a
small cost of being a really good neighbor, all the while helping to grow
the Power company.

In 1948, the final reorganization took place, at a time when Power had great
need of capital to expand its reach to the fast-filling suburbs.  The parent
took the Power stock from Railways, and simultaneously accepted
responsibility for paying off that 1960 bond issue.  Abandonments occurred
shortly thereafter...first, to see if bus substitution would work (it did
not), and thereafter as revenue declined sufficiently to preclude
continuation.

Questions?

Ed

-----Original Message-----
From: pittsburgh-railways-bounce at lists.dementix.org
[mailto:pittsburgh-railways-bounce at lists.dementix.org] On Behalf Of Phillip
Clark Campbell
Sent: Wednesday, May 02, 2012 11:39 AM
To: pittsburgh-railways at dementix.org
Subject: [PRCo] Re: Port Authority approves huge cuts in bus, trolley
service | Allegheny Co. News - WTAE Home

Please tell us what Mr.Lybarger wrote.


 
Phil




----- Original Message -----
From: John Swindler <j_swindler at hotmail.com>
To: pittsburgh-railways at dementix.org
Cc: 
Sent: Wednesday, May 2, 2012 11:18 AM
Subject: [PRCo] Re: Port Authority approves huge cuts in bus, trolley
service | Allegheny Co. News - WTAE Home

I like the idea of a mix of support for transit.  The state provides a
'floor', and then the locals can decide how much additional transit service
is wanted.  As it is, $184 million can buy a lot of transit service.  That
was the state operating subsidy last year for PAT.  But PAT costs are about
$150 per vehicle hour, about the same as SEPTA which runs a commuter rail
service.  The costs elsewhere is around $70-$90 per vehicle hour.  There's
just something strange about PAT's expenses, but could never figure it out. 
Remember what Ed once said about West Penn power dividends??