Little progress sufficiently important to appear on the surface was made by the Legislature the past week. The address of Governor Pinchot relating to his plan for reorganizing the State government caused no sensation. It had been discounted in advance. The address itself was not one calculated to arouse enthusiasm in either House or Senate, nor did the Governor expect it. The attitude of the Legislature toward the code remains unchanged. The likelihood is it will be passed with misgivings on the part of many legislators who believe Mr. Pinchot will do well with it but who wonder what will happen when all this power falls into the hands of a less economical executive. The next big thing on the program is taxation. The Ways and Means Committee of the House will get together during the coming week. The leaders are making a bid for action, sensing the growing impatience of many legislators with a prolonged session. To that end they hope to have ready at least by the close of next week some sort of taxation scheme for presentation to the Legislature. They are opposed to letting all of the tax raisers now in committee go before the House, expressing the belief that such a course would lead only to confusion. A specific recommendation is favored and thus for the moment in the eyes of the taxpayer, present and possible, the men who will frame this measure constitute the most important committee on the Hill. Serious efforts will be made to get the Governor's code,

the general appropriation bill and others of a highly essential character in some sort of shape for action the latter part of the month. The most important bill signed by the Governor during the week, from the standpoint of business interests of all kinds, is the Third Class City Zoning act, which was fathered by the State Chamber of Commerce and puts into the hands of City Planning Commissions and Councils of Third class cities power to district municipalities in the matter of business, industrial and residential buildings. The bill is almost identical with that defeated two years ago in its essentials, but public service corporations may not be disturbed except by agreement of the Public Service Commission, which shall in case of dispute over-rule the local authorities where the interests of the public may be interfered with my operations of the law.

MAY 1 5 1935

Public Service Commission

APPLICATION OF POTTSTOWN TRANSIT CO

Street railway-Judicial sale-Reorganization-Stock and bond issues—Paving liabilities—Appraised value.

The property and franchises of a street railway company were sold at judicial sale for $75,000 to a committee representing the majority in value of the bondholders. The plan of reorganization called for a $150,000 stock issue, par $25.00 and a $300,000 bond issue. Bonds deposited with the committee were to be exchanged at the rate of one share of stock for each $100 bond. To the subscribers of $100,000 of the new bond issue at 95, three shares of stock were to be given as a bonus with each $100 bond. Another $100,000 of the bond issue was to be used to retire an underlying mortgage, and the balance retained in treasury. This plan resulted in outstanding stock in the new company of $146,525 as against $500,000 in the old; and $100,000 bonds in the new to $571,000 in the old.

It was also shown that the value of the property of the reorganized company was in excess of its capitalization, and that it owned valuable lease rights. The net earnings for the year 1921 were $27,924.

The right of the Borough of Pottstown to recover paving bills against the old company was left for the courts to determine. The Commission approved the reorganization and issued a certificate of public convenience in evidence thereof.

Application Docket No. 7644.

REPORT OF THE COMMISSION

BY THE COMMISSION:

The Pottstown and Phoenixville Railway Company was incorporated on May 26, 1911. It constructed a line of railway