Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-09-24
Characterization of Account
ant on Valuation of Electric
Power Company Property.
TO CONTINUE TESTIMONY
AT FUTURE MEETINGS
Attorneys for Corporation, Before
Utilities Commission, Question the
Accuracy of Witness Findings.

An idea of the task the public utilA
tiles commission has before it In esq
tablshing valuations for public service
corporations operating in the District
was furnished last week by the cross.
examination OF Andrew Sangster, the
commissions chief accountant, in the
Potomac Electric Power Company hear.
ings.
mered away at Mr.. Sangster all week
and have not yet finished with the
witness. But before he is recalled It
Is planned to cross-examine Charles L.
Pillsbury. who made physical exami-.
nation of the company's property. Mr.. ,
Pillsbury may occupy the stand for a
week or more. After the commissions
witnesses have been heard. the COM
pany, 1t is understood, will introduce
direct evidence to show the value of
Its property. II the proceedings con-
tinue to the end under the open hear
ing plan and at the present rate OF
is believed. that they will not termt- !;
nate for months.
Character Of Examination.
The cross-examination of Mr.. Sang
ster was Of a minute character. Its
showed the purpose Of the company to
inquire strictly into every rating OF
the expert and it developed serious dr.
ferences Of opinion between the com-s
pany and Mr.. Sangster in regard to
conclusions reached In his report. These
differences repeatedly were made the
basis of motions to exclude the report.
which were oyerruled in every In
stance. Exceptions to the rulings ina
variably were noted, thus establish
to- =, o,Se d. Ho 4
If the company should be dissatisfied
with the valuation eventually to be ap-
proved by the commission.
Attorneys for the company made no
effort to conceal the fact that they be-
lieved they had made telling points
against the Sangster report. From. thes
outset their contention has been that
Mr.. Sangster's accounting methods were
system of making eliminations from
capital account In order to show the
cost of existing property produced in :
accurate and incomplete results. Quea-e
items was directed almost exclusively
toward proving this contention. r..
Alleged Admission by Witness.
Among the developments of the
cross-examination which the company's
representatives apparently considered :
important was the statement by Mr..
Sangster that his accounting methods. 30
far as he knew. had never been en-
ployed in an investigation of similar
character. ,.tg
Backing up their several motions to !,
have the report excluded. the COM
pany's attorneys claimed that Mr.
Sangster's testimony showed that the
report was not an accurate statement, l
but merely an approximate representa-
ton Of cost: that the report was vasue
and unreliable, because Mr.. Sangster
was unable to identify certain excluded 5
items; that he had not make a critical
examination Of operating expenses, and
that many payments charged to operat-'
ing expenses could have been charged
to capital; that he had made elimina-
tions for depreciation. which involved z
a question of value. rather than cost.
and that he had not qualified as an ex- 3
pert to testify in regard to values;
that the report contained no allowances
for financing, brokerage. going value.
franchise value. promotion charges and
other features.
Examinations made in the Sangster
report which. the company's lawyers
claim, should not have been taken from
capital account involve thousands Of
dollars. When Mr.. Sangster Is recalled
to the stand he will be questioned con-
corning a group of Examinations for
odds and ends amounting to s3s.00o.
During the examination last week he
was unable to give the reasons for
so would require going back over the
entire accounting investigation. Later
the witness said he found II would be
possible to assemble the data explain
ing the eliminations in a comparatively
short time. and he will be recalled to.
the stand for the purpose of explaining
this feature of his report.