Service At Cost Plans

Service At Cost Plans

by Harlow C. Clark


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This is an OCR edition with typos.
Excerpt from book:
CHAPTER FOUR Risk of Termination Risks to Which Local Transportation Investment Is Liable—Termination of Right to Conduct Business Without Provision for Recovery of Investment — Franchises as a Protection to Investment — Effect of Term, or Period — Necessity of Amortization when Period Is Short — Importance of Credit — Protection of Public Interest with Long Term Franchises — The Indeterminate Permit Considered. The second of the risks to which capital invested in electric railways is liable is that its right to conduct its business may be terminated without provision being made against the loss that must always be present when a going concern is converted into a mere aggregation of physical assets — the difference between a " business " capable of earning a return and the scrap value of the physical property with which the business was conducted. The foundation of the local transportation company's credit is the expression of legal right, franchise, grant or agreement by which it maintains tracks in the public streets and operates cars thereon. Money is obtained for these companies, not so much on the strength of their physical assets, as upon their ability to earn a return. Tracks, cars, power houses, wire and other apparatus have a certain value as " scrap," but this " scrap value " in no case equals the " value " of the property which, for the investor, must bo based upon the utility's earning power. The risk of having the " value " of the property converted from that inherent in a living business enterprise, to the " value " of commodities like rails, ties, concrete, cars, wire, power houses, etc., etc., is controlled by the period or terms of its grant. Local transportation franchises are, as to period, of three ge eral classes, perpetual, term, and indete...

Product Details

ISBN-13: 9781110814251
Publisher: BCR (Bibliographical Center for Research)
Publication date: 05/28/2009
Pages: 324
Product dimensions: 8.00(w) x 5.00(h) x 0.68(d)

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