The Washington times., 1916-12-10
WIDE VARIANCE In
UTILITY VALUATIONS
Estimate Of Commissions Ex-
perts Almost Tripied by
Corporation.
CONTINUED from First Page.l


as IL stand today.
Second Line OF Procedure.
Their second limo OF procedure
was to examine the books OF the com
pany, item by item, and see Just what
they show was actually spent by the
company in building and developing
It's property down to its present state,
or rather as of July 1, 1914, when the
work OF making these estimates
started.
The work along these two lines pro
ceeded separately. The work OF valu-
Ing the property on the basis OF re-
production cost less depreciation TOOK
about two wears and was carried on
under the direction OF Charles L.
Pillsbury, chief engineer OF the vaiu-
alton Bureau Of the Public Utilities
Commission.
Directed BY sanEster.
The task OF getting at tho actual
original costs from tho books OF tho
company was carried on Under the
direction OF Andrew Sangster, chief
accountant OF the Commission.
Harold Almert, an engineer ON.
ployed by the Potomac Electric Power
Company. made the reproduction cost
value for the company. He made ".
however, as OF July I, 1glG-this being
his theory did not admit
OF any allowance for depreciation.
He was assuming that Washington
for the first time In It's history was
getting an electric light plant. and he
u brand new plant that was appear.
ing overnight, so to speak, with It's
headquarters at Fourteenth and Z
streets northwest.
Expected TIL. Week.
Thus far the company has submit. !
ted no estimates OF value based on
what itp books show TO have been
spent IL In expected 20 do no some
time this week.
Mr. Almert's estimates as TO actual
tangible values are interesting, but not I
so remarkable as his value attached to :
intangiblcs. ~. figures the reproduc-
tinn cost OF the physical property at
Us. ~, b22s5. and includes among other
thingss TO he valued the undeveloped
Cemetery site ut Fifteenth
and II streets northeast This site,
which In, placed IN the valuation at
more than $50 600 was bought by the
developed in amy way for the com
pnnys business, and u practically a
waste trace. 4
Million For site.
After getting his total for the physical
reproduction cost value. Mr. Almert
adds another million dollars as repre-
acnting the value OF the Great Fall
water power site This figure he took
from the company'h books.
As brought out a Year ago In n series
o. OF. " Tue. In Tho Times ,Mo-,hirds Of
sirting principally OF an undevciopcd
Island In the Potomac river, were form.
crly owned by the Washington Railway
and Electric Company. which paid st2S.-
IN N..A
the books Of the railway company AZ
That nguro w TO "a certain hour on u
certain day In isi:
Same Dir~ctorate..
Now the Washington Railway and
Electric Company owns outright all
the capital stock OF the Potomac
Electric Company. Moreover. the Of
ficers and directors OF the two COM
panics are Identical
At the certain hour OF the certain
day IN 1919, referred Co. the directors
OF the railway company decided IL
would DO a good thing 20 sell its
rlshtS IN the water power site Co
the Potomac Electric Power Company,
SO. In their dual capacity OF directors
OF both companies, these gentlemen
met and sold the property 10 the
electric company for 81. 200 OO0. To
meet which price. these directors in-
=
mac Electric Company by 81, 600, 600.
or onc-siSth. and paid the price TO the
railway company In common stock OF
the power company.
Valued az MIIiion.
within twenty-four hours after this
transaction. the property disappeared
from the railway company's books az
Its original purchase value OF $4,000
and appeared on the power company's
books as a charge against the elec-
tric consumer at sl.OOO,OOO.
From this point. Mr.. Almert deVel-
oped his, formal report and In his
testimony before the Commission the
interesting features OF his "hypothe-
Sis. First OF all. he figured that the
Eenlus,or genii, who discovered that
Wa hIngton In the year OF 1916 ought
20 have, electric light service, would .
have TO go about getting franchises
To use the streets for poles and COM
duits, aud organizing his campaign,
no 10 speak.
Allows Quarter OF . Million. !
For this Mr.. Almert allows the sum
OF s2sz,5i2. In his written report and
In his direct testimony before tho
Mr.. Aimert explained
this item In this way;
1T Is known fact that money be
spent for the purpose of securing fav-
orable action and for expenditing ac-
tion both through publicity cam
paigns. entertaining those whose in ,
fluence would be helpful and by
Indirect. and sometimes even by d. .
rect. contributions OF cash. stock and
other considerations for assistance"
Under cross examination the witt
ness went on to explain that was
necessary under such circumstances
to dine newspaper editors and other
persons OF influence In the commun-
ity" To Educate the people aud the
authorities UP to the deisrability of /
the proposition being considered.
100000 For Financing.
afr making that addition to the
value OF the Potomac Electric Power I
company's property, Mr., Almert then /,
estimated the sum OF 100000 for I
that is. he explained, the /
expense which this promoter, or these
promoters, would be put to, after or
their promoting company, in
with financiers and per
suading the latter that Washington
offered fertile neld for electrical In
vestment.
The promotes, now, according to !
Mr. Almert's hypothetical basis OF !
valuing the property, have now done
their work, and the fnanciers pay
over to the promoters-or "conceiv- !
.rs," as Mr.. Almert calls them-the |
sum OF k65O.O0O for their idea. This
sum, according to Mr.. Almert, should