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

[Dick Hasselman]

Ed,

Very nice history of WP Rys., thanks.

I wonder how it compares with that of Public Service of NJ, which was also
into both Railways and Electricity in its earlier years, but got out of the
first? 

Dick H

----- Original Message ----- 
From: "Edward H. Lybarger" <trams2 at comcast.net>
To: <pittsburgh-railways at dementix.org>
Sent: Wednesday, May 02, 2012 3:43 PM
Subject: [PRCo] Re: Port Authority approves huge cuts in bus, trolley 
service | Allegheny Co. News - WTAE Home


> 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
>
>