Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1915-01-09
ANDERSON ANSWERS
TRAFFORD'S REPORT
Consists, He Says, of Half
Truths More Misleading Than
Unqualified Error"
MAYOR SIGNS RESOLUTION
City Will Ask Corporation Com
mission for Full Inquiry Into
Power Rates.

City Electrician Trafford's report to
the Administrative Board. asserting
that the Virginia Railway and Power
Company makes an unduly large profit
on the electric current 1t sells to con-
sumers in this city, was characterized
yesterday by Vicc-Prcsident and Cen
eral Counsel Henry w. Anderson, OF
that company, as falling In the class
"of those half-truths, which are worse
and more misleading than unqualified
errors"
In his statement submitted to the
Administrative Board on December 81.
Mr.. Tranord declared that the power
company is deriving from Its light and
power business a profit of 80 per cent
on the assessed valuation of the prop
crty employed by 1t In the manufacture
OF current. The company. he said. In
substance. was charging the citizens of
Richmond annually for light and power
s25O.o0o more than it should
WILL ASK COMMISSION
TO INVESTIGATE RATES
Upon Mr.. Trafford's advice, the board
drafted n resolution directing the City
Electrician and the City Attorney to
appear Tuesday before the State Cor
poration Commission, with the request
that that body Institute n searching in
vestigation into the whole question Of
rates charged by the power company
in this city for commercial current
The resolution was passed by both
branches Of the Council, and was
signed yesterday by Mayor Ainslle.
Mr.. Trafford and Mr.. Pollard, In con-
itS
sent the city's request to the Corpora
tion Commission on Tuesday. when It
takes up the general consideration of
the Virginia Railway and Power Com
pany's application for permission to
revise its light and power rates.
Vice-President Anderson. of the
power company. was asked yesterday
for statement on Mr.. Trafford's
charge that the company is exactinE
an unduly large profit from local users
Of Its current.
SERVICE is ADEQUATE,
AND RATES REASONABLE
1T is difficult to discuss a matter of
this kind In brief statement" said
Mr.. Anderson. Perhaps the best
answer to the charge OF excessive
rates In Richmond Is to say that for
many years the rates for light and
power service have been under investi-
cation and regulation In various States
OF the Union, and n comparison Of the
| rates in Richmond with those In other
cities shows that the Richmond rates
are as low. or lower. than the average
rates of other similar cities under ap-
| proNimately the same conditions"
This question was fully investigated
when the Street Committee was con-
| sidernG the application of the Rich
! mond and Henrico Railway Company
for light and power franchise in 1912.
and the committee reported as fol-
lows:
Your subcommittee is of opinion
from the data furnished that the ser
vice furnished by the Virginia Rail-
way and Power Company is adequate.
ana that Its rates are reasonable: in
| fact. lower than those charged In cities
about the size OF Richmond and under
similar conditions
THE present rates are the same or
lower. than at the time OF this re-
! port"
HALF-TItuTf MORE MISLEADING
THAN UNQUALIFIED ERROR
The statement of Mr. Trafrord to
which you refer comes within the class
Of those half-truths, which are worse
and more misleading than unoualtf,ed
error. He has taken the value OF the
| physical property as assessed for taxa
| ton rs the basis for ascertaininr tho
! rate OF return. Mr.. Trafford knows. or
ought TO know, that such a basis ia
not only misleading. but has never been
adopted by any commission or court
Ihe present assessment of property for
| taYation in Virginia has no bearing
upon the question of public service
| rates. The recent report of the Tax
| Committee shows that the assessment
or privately owned real estate varies
| from IL per cent to &c per cent OF
Its actual value In various jurisdictions,
and In Richmond it Is only 54.S per
cent OF the actual value In the case
of such real estate, this represents the
whole basis of tax. With public ser
vice companies, their physical propcrty
Is assessed separately from their fran
| chises, and. In addition to the tax on
physical property. they arc required to
| pay franchise tax OF 1 per cent on
gross earnings to the State, and In the
! case OF light companies l per cent to
! the State and city. These companies
are also required to pay other specIoI
taxes which other property owners do
not pay, and the assessment OF phys,
cal property Is only one of numerous
| elements Of taxation. 1t has not. and
/ was never, intended to have any re-
lation TO rates. In falling to point
out these facts, Mr.. Trafford obviously
stated the half-truth.
MANY ELEMENTS ENTER
INTO CONSIDERATION
In arriving ut fair value OF prop
| erty for the purpose OF ratemai<ing or
! Of ascerthining Just return upon the
| Investment, numerous clements are re-
/ CURED to be considered other than the
. physical value. Some of these are: the
investment In the property, the good
Twill value. the value as n going con-
Germ, considering all elements which
! 20 to mako going concern as dis
| tinguished from the bare value of the
physical property, and II is also neces-