The Washington herald., 1915-08-26
HAM Defends TIE
Of Big UTILITIES
Vice President Of Washing
ton Railway and Electric
Company Testi6es.
RECEIVED POWER FREE
Public Service Commission Probes
Connection Between Two
Corporations.
RECEIVED POWER FREE

Declaring that the connection between
| the Washington Railway and Electric
Company and the Potomac Electric
Company has aided In the material re-
duction' OF the price for electricity in the
District, W. F. Ham. vice president OF
the former corporation, yesterday after
noon told the Public Utilities Commission
| at hearing in the District Building that
the interests Of the people would suffer
by the enforcement Of the two concerns.
The commission favors the separation
of the two corporations and is conduct
Ing an investigation to determine the
exact relations between the companies
In order that the desired end may be
brought about speedily.
Mr.. Ham admitted the railway COM
pany In 1913 received without cost from
the electric power company all the power
used by the former and in addition
enough to sell to other railway compa-
nies and to make therefrom S37,sf6.10.
Tells of Contract.
Corporation Counsel Conrad H. Syme
adduced from Mr.. Ham the statement
that while the contract drawn up in 1906
between the two concerns provided that
the railway company in return for power
should pay to the power company per
cent on property and 10 per cent on
profits. not a cent actually had changed
hands. Mr.. Ham declared the written
contract had been verbally modified. so
as to provide for indirect instead Of direct
payment
Mr.. Ham said there We're a number Of
considerations which indirectly might be
looked upon as ample payment for the
power supplied. He pointed out that the
railway. company had guaranteed $780,
900 in Potomac Electric Power Company
bonds and explained that the enormous
consumption of power by the railway
company enabled the power company to
engage in large scale production OF cleo
tricity and thus materially decrease the
cost and consequently the price ocered
to consumers.
request from Mai Charles W. Kutz
Engineer Commissioner, who is presiding
at the hearings. for a statement as to
the properties held separately by the
companies brought this reply from Mr..
Ham:
Determining Holdings.
when you consider tangible and in
tangible properties. 1t Is almost impossi-
BILE to determine the exact holdings of
each company. We are operating very
much as one company. We use the prop
critics of each other and we use some
our efficiency IL we had to account sepa-
rately for all our properties. We don't
feel we have to hold ourselves at arms
length the same as though We were deal
ing with separate companies.
THE electric power company Is fur
nishing electricity at a low rate because
Of the large scale production made pos
sible by the enormous amount Of power
demanded by the railway company. The
ia hotter nn than II
would be had 1t not entered into the con-
tract of 1906. And consumers have not
been injured by the arrangement. Both
companies have been benefited by the
arrangement"
THAT is the point on which the COM
mission is not satisfied" interposed Maj.
Kutz.
1T was the lending of credit by the
railway company to the power company
that made the low rate possible said
Mr. Ham. Prior to the contract the
power company had to spend cent a
kilowatt to produce electricity: the cost
of production now is four mills. And the
number of consumers has been increased
frcm 5000 or 5000 to nearly 5000. This
couldn't have been done without the CON-
bination.''
Kutx Asks Question.
lne power pidht NHs h''it ''' s'fsN
how would the cost of production be
anectcd?" asked Mai Kutz.
1T would cost the power company
from 30 to - per cent more. The cost
all along the line would be increased BY
seraration of the two companies. The
mower plant is one of the most ecoromi-
cal in the country. 1t is turning out
electricity cheaper than any other plant
OF ccual size in the United States.
Al t1tr,N oar nv
also derive benefit from this arrange
ment?"
Certainly: that's just the point. Is
there anything wrong in that" asked
Mr.. Ham.
.'I admit" said Maj Kutz. that the
railway should get reasonable return
for every real service rendered.
"A simple solution Of tn matter in
terpoged Mr.. Ham. "is to consolidate
the two companies and end the argu-
mcnt. We don't want this proposition.
We would like TO consolidate We
cont want wheel within wheel. ] as
sumo the commission could deal with
n consolidated corporation just the
same as commissions elsewhere do. In
Milwaukee one company operates
railway system and sells both e.cc-
.ricit-- and steam for heating pur-
.>ose.
we cannot see the equity OF divid-
in,' up the power comolrr cxreHsas
the way they are" said Maj. Kutz,
shifting the line of questioning. 1T Is
for y,.u to show that II is equitable.
.'On the other hand" replied Mr..
Ham, Il. is for you to show that it Is
not equitable. We deny that the nexus
has increased the burden on the con-
But miEst not the rate have been
reduced had relations been otherwiseE
II think no,
Rates Mere Reduced.
'But might they not have been re-
duced had direct payment of the stipu-
lated 6 and 10 per cents been made"
"If the railway rad rendered no
services to earn the power supplied
II, that might have been risht" said
Mr.. Ham.
"Did not the railway company guar
antec the bonds o. the power COM
pany after 1t had acquired the entire
stock of the power company" asked
MIR. Syme, "and wasn't that guarantee
ing bonds on its own property?
NO" replied Mr.. Ham.
Then you draw a distinction"
II certainly do said Mr.. liam
why" said MIR. Syme. "the SUPREME
Court has knocked out that stinctios."
S. r. Bowen. attorney for the railway
refused to cross-examinc tie
witnesses stating that they were testify