The Washington times., 1914-02-06

oIumbia, and light to the public and
90 the municipality, would he able TO
IN reasonable returns OF its invest
.ynts at materially reduced rates OF
argos for its services
lust what legislation, the cOmmlSSion
.ould recommend 10 bring 2oOUt i'm
owed conditions, the report states, IS
matter to be determined. In any event.
is stated. the contracts between the
-ilway and the power company should
20 Cancelled. and new contracts drawn
.udcr the supervision of the commits
N.
Analysis of Income.
A careful analysis of the income ac-
unit CT the Washington Railway and
,lectric Company was made by Chair
an Harding, and as the investigation
.rocceded, il became necessary 70 eX-
Nd its scope in order to fully under
rsnd the precise status OF the COM
slauy with reference TO its resources and
abilities.
The report states that the essential
,-0perty Of the Washington Railway
nd Electric Company consists Of Ger
ain stocks and bonds and pTomissory
,ctes Of the Metropolitan, Columbia,
georgetown, and TcnleytoWn, City and
suburban, and other local railways,
nd of the United States Electric Llgnt
nd Potomac Electric Power Company,
III OF which had been held by the
TashingtoD Railway and Traction COM
any, q Virginia holding corporation,
Eaich had mortgaSed the same Tor
TfL000Oo0.
1ault having been made, it is stated an
.-aese stocks, bonds, and notes were
bought in at a foreclosure sale IN Nor
tolk, Va. in 1901, for 5,OgO,O0e ana ,,'5 MeIe
transferred to the washington RaliWdS
and Electric Company in consideration
- st- n
stock, and 81, ,992,350 Of its consolidated
Der cent fifty-year gold bonds, making a
total Of s22,s92,S5c.
No Appraisement Made.
UTpon this phase of the question the
report states:
SIT is impossible to ascertain what
zrss the value of the property re-
,eIved bv the Washington Railway
md Electric Company. no appralse+
nent was ever made of il either 5y
The Washington Railway and Elec-
r.Ic Company, its board Of directors
Or any one else, so far as the hearing
dlscloses. ..,.
: arrows any light on its value is that
all of the property. with the eXcep-
ion of certain pTomisSory notes, is
SIZED after May 9, 1900, was bought IN
# SIS, ,oO0, 600 ~ the foreclosure sale.
The report comments at length upon
he fact that tn edirectors of the
washington Railway and Electric
company are practically Identical, the
same individuals as the directors OF
rs subsidiary companies and OF tne
Potomac Electric Power Company. In
4 his connection the report says:
"T.hese facts should be borne IN
alnd in considering certain transac-
ions, and the contract between the
parent company and its subsidiaries
ss hereinafter described
After careful analysis OF the items
Making no the income Of the property
5or the several years of its existence,
T.e report deals with the question OF
'hc cost of current furnished by lhe
otomac Electric Power Company 20
nc Washington Railway and Electro
C,olnDany and its subsidiary companies.
ard it was ascertained it is stated.
hat the price asked and the price
Daid for this power was fixed by the
came board OF directors repres snttnS
hoth the bUyer and seller. and was
sested.
no Depreciation Account.
The inquiry further developed the
act that no depreciation account, as
such. was kept. but that the mainten-
Or the parent company and its sub
sldiarv companies, out o. operating en-
panseS.
Further, il is stated. that no dePre-
citation account was kept as required
by the law for the maintenance and
repair of the road. but was paid out for
Of the sale of bonds.
IN some Instances from the proceeds
The report deals at length with the
acquisition by the Potomac Electric
Power Company of. what is known as
the Great Falls power site.
Colonel Harding was aided in the in
4estigation by Corporation Counsel
Syme, general counsel for the commits
sion. who directed many Of the in
guirieS. The hearing lasted six days,
and was held behind closed doors be
oause of the refusal of the railway
sOmpany to produce its books and rec
Hrds I'm open hearing.