The Washington times., 1913-11-11
INQUIRY IS LIKELY
TO REDUCE RATES
Hearing on Railway Company's
Extra Dividend Is Set For
Tomorrow BY Beard.

That a revision downward of the cleo,
trio rates charged in the District Of Co
lumbia by the Potomac Electric Power
Company may follow the investigation
Of the extra dividend of the Washington
Railway and Electric Company by the
Public Utilities Commission, hearing
o. which has been set for tomorrow
morning, as was told in the S 80 edi-
tion of The Times yesterday, was an
opinion freely expressed in many quar-
ters this morning.
IT is pointed out that the report to
the commission by John G. Williams,
Statistician, among other objections to
the extra dividend disbursement, makes
the comment that the railway company
has drawn upon the earnings of the Po-
tomac Electric Power Company in order
TO make a good showing in its reports
and to pay dividends.
Makes No Mention.
No separate mention of the amount
OF money received by the Washington
Railway apd Electric Company from
the Potomac Electric Power Company
is made in the report of the railway
company to Congress of January 60.
Tine report of the Potomac Electric
Power Company, however. while never
mentioning the amount paid out in divi-
dends. does give the amount paid in
interest and dividends, and in another
section mentions the amount of inter-
est alone, which, by deduction. gives
the amount paid in dividends as $500
which. on $6,0oo,000 of stock, would be a
dividend yield Of SIS Is per cent.
This leaves surplus earnings of sa,-
1854, in addition to carrying sS4.7O to
the sinking fund. In short, the report
of the Washington Railway and Elec-
tric Company shows earnings of 1oh
per cent on the common stock, but the
principal point is that the actual divi-
dend disbursements were at the rate
of Ss3 1-3 per cent, figured from the
report of the company itself, and not
investigating the question of whether
there is any water in the stock on
which this dividend is paid.
H. is believed by some that the bring
ing out of these points when the COM
mission investigates the sources Of the
revenues of the Washington Railway
and Electric Company will make an
investigation of the Potomac Electric
a certainty, with possibility that at
its end lower rates for electricity may
&c ordered, just as they were ordered
in Baltimore by the Ppblic Service Gem
mission there.
Big Reduction Made.
Baltimore now has a maximum rate
of S1s cents per killowat hour, as COM
Pared with a former maximum rate of
10 cents.
Other points made by the report Of
Mr.. Williams are that the railway COM
iany has provided no sinking fund
against the maturity of its bonded in
debtedness, has no depreciation ac-
count, that its depreciation reserve is
made up in part of unsold bonds of the
company. and that repairs upon the
road and rolling stock do not fulfill
the office of depreciation account
The surplus of the company is at
tackled with the statement that more
than $4,000 of the 10000 is made up
of stock issued by the Potomac Elec-
trie Power Company, which was based
upon property already owned bv the
company at the time the issue was
made.
A meeting of several directors of the
company was held last night, but the
president Clarence p. King, who is
also president of the Potomac Electric,
was out of the city. He is expected to
return before the hearing tomorrow.