The Washington times., 1915-04-03
THE FIRST VALUATIONS

The Public Utilities Commission
has announced the results of the first
valuations of utility properties in
Washington. The Terminal Taxicab
Company asked that valuation of
$532, 900 be placed on it's properties;
the commission decided that they
are worth $225,0OO. That is, the
company gets very much less than
half the valuation it deemed proper.
Needless to say, in this case the
corporation was concerned about
having the valuation high, in Or
der to justify high rates; not low, in
order to justify low taxes.
The big and important fact about
these valuations is that the COM
mission has permitted no franchise,
good will, and going concern. ap-
praisals to figure. This will be the
substantial question on which the
various appraisals now in progress
will at length be carried into court.
The commission as now constituted
is determined not to permit the val
uation Of these sundry intangible
elements. The corporation will, Of
course, insist on it; and the issue
will go straight to the Supreme
Court of the United States, where
the decision is likely to have a very
great national significance.
1t is a trifle difficult to under
stand why public utility should be
allowed to capitalize a franchise
that was given to it. That is equiv
alent to having the town donate half
the value involved in operating the
utility, and then being charged for
using that half! 1t seems that fran
chise and good will and going con-
Germ values are accounted consider
ably more than half the value of a
taxicab business. Where does the
franchise come from-the right to
use the streets? Manifestly, from
the city. Shall the city be made
now to pay, because it gave that
privilege to the corporation?
And the good will-where does
that come from? Plainly, from the
community; it is the community's
good will; very commonly in the
case of public utilities it is nom
existent save academically. The
public patronize street cars, not be-
cause it likes them, but because it
wants to go somewhere. 1t patron
ICES the cars of particular COM
pany, not because it likes that COM
pany better than another company,
but because that company's cars get
it to it's destination most readily.
Good will of public service corpor-
alton, in short, is commonly moth
ing on earth but the monopoly right
and the monopoly right is donated
by the community; therefore it is
the community's property, not the
corporations.
1t would seem, on the other hand
that expenses involved in promotion
organization, ETC., and not possible
to be represented in a physical ap.
praisal, ought to be a proper sub.
ject of capitalization. The com.
panies laws of Great Britain and OF
practically all countries make liberia
allowances in this regard. 1t is just
as necessary to promote a railroad
as it is to lay rails for it; in fact, il
takes a higher class of ability t.
!. promote it than to lay the rails. Thi.
; does not mean that promoters ought
to be allowed to carry away 100 pei
: cent of water, and then make tha
, water earn dividends by overcharg
, ing the public. But it does mear
/ that proper and legitimate expense.
of organization and promotion mus
be permitted in the Capitalization