Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-01-28
COMPANY LAWYERS
| ARGUE TOMORROW
Potomac Electric Valuation
Proceedings Reach Sum-
h. ming-Up Stage.
WILL REQUIRE THREE DAYS

WILL REQUIRE THREE DAYS
Three days OF solid talking by at
torneys for the company and the pub
lie utilities commission are expected to
be ushered in tomorrow morning. when
the Potomac Electric Power Company
= valuation case enters upon it's final lap
Commenced last June. this longest OF
all proceedings yet conducted by the
utilities board and one in which millions
of dollars are at stake. will reach argu-
ynent and brief stage tomorrow. and the
legal talent on both sides is primed for
q battle to the finish. That fully three
days will be required for the sum
ming up" is conceded by those con-
cerned.
John S. Barbour. general attorney for
the company: 5. r. Bowen. secretary.
and Charles a. Douglas will be in charge
of the final presentation of the company
case. The commission will be repre-
scented by it's general counsel, Conrad
II. Syme. who. without assistance. has
conducted the long and tedious examina-
tons for that body
Testimony Covers 5000 Pages.
The record of the testimony taken
comprises nearly 5000 typewriter
pages, all of which have been carefully
reviewed during the past few weeks by
the attorneys on both sides. When their
conclusions have been submitted. it will
then be up to the commission to deter
mine whether to allow the twenty
three million-dollar valuation claimed
nv he
nillion-fve-hundred thousand dollar
appraisal reported by its own valuation
bureau select some compromise
amount.
The various sets of figures in the
case were submitted by four experts,
two for the company and two for the
commission. following months of in
vestigation. For the commission.
Andrew Sangster. accountant. made a
report on the historical cost of the
corporation's property. submitting
total of about $4,000. 900. A correspond
ing report made by W. f. Ham. vice
president of the company. claimed a
historical value of about 10000 coo.
Charles L. Pillsbury. chief engineer
of the commission. submitted an es-
innate on the cost of reproducing the
600, increasing the amount to about
S10,500, 900 by additions made during
the progress of the hearings. Harold
Almert. consulting engineer of Chicago,
WHO nlaue d cost OF reproduction eS
innate for the company. reported
value of approximately s23.000.000.
Issue on Intangible Values.
The difference between the amount
which the commissions experts would
allow, s10.50o.o00. and that claimed by
the company. s23,oOO.O0o. consists
largely of so-called intangible values.
such as REORGANIZATION expense. COM
pensation to conceivers cost of
financing. brokerage and discounts de-
velopment charges and franchise val
ues. Such costs as these are elmina ted
from the commissions tentative valu-
alton.
producing the company's physical prom
erty, exclusive of the intangibles was
100000 One factor contributing to
ths difference between this estimate
ana tne sio.eoo,ooo finding of Mr.. Pills
bury is the fact that the commissions
estimate is of July 1, 1914, whereas the
company's valuation is of July ], 1916
The company introduced evidence to
snow that the advance in the price of
labor and materials during this two
YEAR period made the cost of reproduc-
IhE IT'S physical property much greater
t'1an at the time the commissions in
Sestlgation was made in 1914.
Many witnesses testified at the hear
Il
week Andrew Sangster was the first
10 take the stand, and after he had
concluded his direct examination he
WAS subjected to a week of cross-ey
ANIMATION by Attorneys Barbour and
bowen. The witness stated that in
compiling his report from the com
pfnys books he had made numerous
EXAMINATIONS and International adjust
Ihehts- Attorneys for the company di-
rected the cross-examination with ~.
OBJECT OF showing that Sangster nracs
t.eaHy mad attempted to rewrite the
companys books; that his eIfminations
passed on assumption rather than
o!i iact' and that many errors had been
made In his International ad1ustments
Eliminations Were Ordered.
Both Mr. Sangster and Mr.. Pillsburv
asserted that Examinations which tb.y
mao made from their reports were in
accordance with instructions issued hy
DR.. Edward w. Bemis, who directed
the valuation for the commission. The
Pillsbury report also excluded the
Sreat rails power plant site owned
by the company, property at 18th and
streets northeast and property out
sl4s the District
ste the commissions case had
been presented and Vice President Ham
and Engineer Almert had testified in
support of the valuation claimed by
shc company, engineers of national
and international reputation were in
troduced by the company. who made
statements backing up the Almert fig-
ures- These were c. C. Young of New
York. Ray Palmer of New York, for
merry city electrician of Chicago, and
j. d b. Paine of Chicago. They testi-
NED that the intangible values claimed
by the company. for which the COM
mission had made no allowance. were
proper charges for inclusion in a re-
production cost estimate. Engineer
toohg testined that in certain items
he would have increased the Almert
allowance for intangibles These ex
perts also took the position that five
year construction period should be al
lowed for reproduction cost purposes
The Pillsbury report allowed only a
chree-year period.
The company's allowances for in
Sangioles were one of the principal
targets for attack by Corpora ton
Counsel Syme in the cross-examination.
II Is expected that this attack will be
resumed in his ARGUMENTS 70 he ~