The Washington times., 1914-03-21
THE PEP. co. DIVORCE

The Public Utilities Commission
has recommended and urged that
Congress pass a law requiring the
Washington Railway and Electric
Company to dispose of its holdings
of stock in the Potomac Electric
Power Company. The railway COM
pany owns the entire stock issue of
the power company. The power
company in turn furnishes power to
the lines of street railway controlled
by the railway company, and also
provides current for geneal con-
sumption in the city.
Every dollar of earnings received
by the power company into its treas
ury, is of course, under this arrange
ment, a dollar of earnings to the
general credit of the railway COM
pany. Every dollar of profit earned
by the power company is that much
profit to the railway company.
This arrangement brings about an
unnatural and unbusiness-like stu
alton. The affairs of the two cor
porations must be taken apart be-
fore it can be known what business
results either is achieving. Their
very general reports to Congress
make it clear that the power COM
pany's profits, piped into the treas
ury of the railway company, consti-
tute practically all the dividends that
the railway company pays.
In other words, consumers of cleo
trio light and power lin this city
earn profits for a corporation whose
business is not the electric light and
power business, but the hauling of
passengers. That is an unnatural
and illogical arrangement. 1t means,
as matter of fact, that a gross
overcapitalization of the railway
company is sustained by reason of
the excessive earnings of the power
company. That very plainly is
wrong. Separate the two concerns,
as the commission demands, and we
will presently be able to simplify
and understand these relations.
This is the very kind of legisla-
ton that is needed to place the utili-
ties of Washington on a proper
basis. 1t is possible that even if
such a measure be passed, there will
be doubts of it's constitutionality
But the legal authorities of the Dis
trict believe differently. They are
confident that the legislation will
stand. Unless it is passed, the most
difficult condition in connection with
the administration of the local utili-
ties cannot be handled effectively.
The consumers of electric current
in this city pay altogether too high
a price. That has long been known.
They pay it because the price has
never been regulated, as it should;
the necessities of the electric COM
pany have apparently measured its
demands for profits and determined
the prices it would charge. In turn,
the necessities of the railway COM
pany fixed the demands it had to
make on the power company.
That is quite too devious a pro-
cedure to be followed, if the public
interest is not to be utterly lost in
the labyrinth. 1t has thus far been
lost. The commission proposes to
bring it back as a factor in the stu
alton.
If the Utilities Commission can
not get the desired legislation pass
ed by Congress, there is another
way it can attain the same results.
1t can order the reduction of the
prices of electric current for public
use, to a proper basis, and it can
wise the contracts under which the
electric railways buy their current
from the power company, and re-
quire that these be put on q proper
basis. Thus in time the plan of
making the public pay, in its light
bills, ths dividends on the water in
xGhw9v company stock, could be
btDoU1S 10 and end, and the light
eeng and power-using public would
get square deal.