Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-08-03
PUB[|COWNERSH|P
FINANCIAL CRASH,
ASSERTS MINORITY
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| CONTINUED from First Page.)
itself, after seven months, unable to
give the committee any idea whatso-
ever what the valuation of the proper
1 ties would be even when regarded only
from the standpoint of physical valua-
| ton.
Incompetence of Commission.
| 1.-THE wisdom of condemnation proceed
| ings at the hands of members of the pub
| lie utilities commission as at present con-
stituted might properly be questioned, in
view of the fact that two Of the members
openly testified that they were strongly
| in favor of public ownership of such pub
| lie utilities and had advocated it for
many years-which might naturally pre-
| clude their having the open minds of ar
| bitrators on so important matter-and
none of the three would claim to have
expert knowledge of street railway mat
tiers.
Section 5 provides for review by the
courts of the award of the public utilities
commission in the event of exception be-
ing taken by the companies. Without
questioning the conclusions of the court
an appeal to 1t would naturally add great
ly to the uncertainty of the amount of the
award, in view Of recent court rulings in
like cases. that the owners are entitled
to greater amount than the mere ply
steal value of the properties and that
the assets of a growing concern, involv-
ing earning capacity, should be paid for.
NO testimony was submitted to the
committee by the supporters Of the bill
to show any reason for expecting the
amount of the award to be limited to
what are commonly known as physical
values"
The bill either by design or otherwise
absolutely omits all reference to the
basis of determining value. which omis-
sion clearly indicates a general careless
ness and complete lack of business acu-
bill.
Difficulties Of Bond Issue.
Section provides for the issue of
bonds with which to pay the award
the bonds to be thirty-year bonds of
the District of Columbia, bearing in
terest at 3.65 per cent. Funds for the
payment of interest and redemption Of
the bonds when due must accrue solely
from the net earnings of the street
railways. without which the bonds would
parent1y. The form and other usual
provisions of bonds are not mentioned
In the bill, other than that they shall be
issued by the District of Columbia
IF issued strictly in accordance with
the terms of the bill. as stated, there
would be grave doubt as to the re-
sponsibility of the District for the pay
ment of interest charges and for the
redemption of the bonds at maturity
in the event Of insufficient receipts from
the earnings Of the railways to cover
such charges.
Leaving out Of consideration the legal
difficulties involved in the acquisition
and operation of lines in Maryland BY
the District Of Columbia, we are con-
fronted with an immediate difficulty.
The Commissioners must acquire all the
lines within the District together with
cars. power houses and other acces-
series, but they are merely empowered
to purchase by bargain as best they can
the parts of lines lying outside the Dis
trict boundaries.
Section 8 provides for the establishment
OF sinking fund after three years, to
which the Commissioners shall annually
pay such portion of the receipts Of the
railways as they deem proper and suf-
ficient
"On the basis of the present earning
capacity of the existing companies, Il
is obvious that unless the District can
ent market value OF the outstanding
securities the annual income would not
be sufficient to pay the interest on the
bonds and to pay into the sinking fund
a definite annual sum sufficient to re-
deem the bonds at maturity.
Section 10 provides for an appropriation
of only $4,000 for the expenses incident
to the condemnation and taking over of
the lines. The facts indicate that the
proposed amount of $4,000 Is in itself an
absurdity. and that the mention of this
amount serves no real purpose other than
to further emphasize the hit-or-miss char
acter of the whole bill.
Commissioners Are Criticised.
"a formal report on this bill was made
to the committee by the Commissioners
of the District of Columbia The essential
purpose of such an invited report by the
Commissioners on a pending bill is to
insure the wisdom not only Of the measure
in general, but also the provisions by
which the measure is to be made work.
able. Two slight changes are suggested
by the Commissioners and the structure
of the bill is otherwise strongly COM
mended by them.
only a blind enthusiasm in advocat-
ing the general principles Of municipal
ownership or gross carelessness in study
ing the structure of the bill can explain
the failure of the Commissioners to point
out, with friendly criticism If they SO
wished, the many and serious faults in
it's structure. The House of Representa-
tives is entitled to more efficient service