Evening star., 1916-12-20
HOLDS VALUATION
NOT HIGH ENOUGH
c. G. Young Testifies at Hear
ings on Electric Power
Company Property.
THINKS ALMERT is FAIR

Assuming tho basic costs for mate
r1als and labor to be fair. c. G. Young.
consulting engineer Of New York, who
has helped to develop big engineering
projects in every section Of the world.
testified before tho public utilities COM
mission today that the twenty three
mlllion-dollar total valuation reported
by the Potomac Electric Power Com
mis- opinion. insufficient.
Mr.. 7oung's testimony dealt with the
report Of the valuation investigation of
the company's property, made by
Harold Almert, consulting engineer Of
Chicago. which places the basic cost
for materials and labor at $13.127.077.
So-called overhead" charges added
to this basic cost by Mr.. Almert. which
swells the total valuation to approxi-
mately s23.00O.00o, were the cost items
about which Mr.. Young testified and
been placed at too low a figure by Mr..
Almert.
Disagrees on overheads.
Beginning his testimony with ref
erence to his professional experience.
which. he said, had extended to Canada.
China. Japan, South America, the Phil
ippines, Hawaii, Australia, Siberia and
globe Mr.. Young went into the details
of the various "overheads" reported
by Mr.. Almert. which, he said, he did
not consider as overheads. inasmuch as
they were expenses actually incurred
in the development of the property
he q
ance Of s136.0Oo for engineering. super
vision and inspection expenses, de escrib-
ing 1t as reasonable cost.
This is 1923 per cent of the basic
cost and think 1t should be increased
by at least S15.00o," he stated.
Next. the witness gave his 20. K" to
the Almert figure Of s1s0,o00 for ad-
mintstration during construction, say
cent of the basic cost, which he did not
consider high.
Approves Almert Tax Allowance.
For taxes during construction he ap-
27l, as also the item given by the Chi
cago expert Of s1.7s1,644 for interest
during construction.
The witness said he would have al
lowed IL per cent for interest for
construction during a two-year period.
whereas Mr.. Almert had allowed but
11.32 per cent.
After approving the Almert figures
Of $4,000 for preliminary operations
and adaptations and S129.l33.60 for
stores and supplies, which he declared
| were necessary part of the equipment
and reasonable cost, Mr. Young made
his first big boost in the Almert al
lowances with respect to working capi-
tai.
The amount set down by the Chicago
engineer for working capital is $378,-
1861. According to Mr. Young. he
would allow 100000 for this item.
The company's claim of $2S2,542 for
legal organization and franchise ex-
pense, as expressed in the Almert re-
port, also was indorsed by Mr.. Young.
as was also the claim of $4,000 for
finances, expense of negotiating only.
Calls Project Risky.
This led up to the Almert figures Of
$S5o.0oo for compensation of the con-
ceivers of the project, about which Mr..
Young testified at length. He said that
he would allow at least 10 per cent for
this compensation, whereas Mr.. Almert
had allowed only 4.s2 per cent Promot-
ing a proposition OF the character of the
fotomac Electlc ROVER company, the
witness asserted, Is as risky as betting
on a horse race. It's ten-to-one shot.
he declared. and the men who risk their
time, money and effort in promoting such
propositions are entitled to a return of
500 for every 81 they put up. but in
no event should receive a compensation
of less than 10 per cent
Other items composing the designated
"overheads' which Mr. Young approved
as being fair and reasonable were
those Of $25, 900 for reorganization ex-
pense; 100000 for brokerage and COM
missions. and s2.115,323 for develop
ment costs.
The direct examination of the wit
ness was conducted by John s. Barbour.
general counsel for the railway company.
The commission adjourned shortly after
noon and will resume the valuation
proceedings tomorrow morning.