Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-06-04

the afternoon. DR.. Lewis was questioned
a number of times by members of the
commission concerning minor legal
points.
4 statement from DR.. Lewis that If
the commission did not allow fair
return in dividends upon the outstand-
ing obligations of the p. r. T. the Su-
preme Court might regard the ruling as
confscattory, brought objections from
Chairman Ainey and Commissioner
Ryan. of Philadelphia
Both insisted on the commissions
right to make fair" valuation. Com
missioner Ryan said that as a matter
of law the commission was bound to fiM
fair value and a fair return.
He cited instances where the physical
property of water companies was ap-
praised by the commission at a larger
value than that given by the company,
Dr. Lewis replied that the commission
might wipe out half of the valuation of
| the T. r. T. Co. but in view OF the
| 1907 contract and other circumstances
which must be taken into consideration,
the stockholders of the underlying COM
panes We're assured certain returns.
Discusses Fare Increase
Doctor Lewis, in argument 10 show the
legal authority for the lease, brought out
| that all the subjects dealt with in the
contracts now pending are dealt with in
the 1907 contract. which was authorized
by act of Assembly, April is, 1907. He
pointed out that the constitutlonaiity of
the Act of 1907 has been upheld by the
Supreme Court, which also held the 1907
contract to be "a contract within the
power of the city TO make under that
act"
Answering the various objections
which had been filed against the pro-
posed lease at previous hearings. Doctor
Lewis touched on the fare increase
question.
The Public Service Commission" he
declared, under the public service COM
pany law of this State, in exercising t>
jurisdiction over rates. has the right tc
establish a system of rates based or
the practical assurance to the company
of return sufficient. but not more thar
sufficient. to enable the company to pa,
a stated rate Of dividend"
Argument of Doctor Lewis
A summary of the important facts
! brought out by Transit Director Twi
ming in his testimony at the various
hearings was given by DR. Lewis as fol
! lows:
First II the city or an Independent
) company operates the city's system as
an independent system. it will be i'm
: possible on any rate of fare for the city
I to receive a net return or rental on
, each operating section as it is placed
, in operation equal to the interest and
sinking fund charges on the bonds
issued to pay for the construction OF
/, the section.
: Second. The city cannot build its
, high-speed system as planned in any
reasonable time If it receives from
each operating section as it is placed
in nnlS ha at ret n
rental which would be received if the
ctys system was operated independ-
ently-the constitutional borrowing
capacity of the city is not sufficient.
Third. The city can build its high
[ speed system as planned in reason
able time If it receives from each op-
Grating section as it is placed in oper-
alton, a net return or rental equal to
: the interest and sinking fund charges
i on the bonds issued to pay for its con-
struction-with such return or rental
the constitutional borrowing capacity
of the city will be sufficient.
Fourth. It is possible to operate the
City's system and the company sys-
tenn as one unified system, and estab-
lish from time to time a rate of fare
, which will enabla the City to receive
!, from each operating section OF the
! city's system. as it is placed in oper--
!. alton. a rental equal to the interest
( and sinking fund charges on the bonds
r issued to pay for the construction OF
I the section.
Fifth 1t is not practicable to oper-
ate the city's system and the COM
>. pany's system as a unified system
unless the city leases its system to
s the company.
e Sixth. It is not practicable to nego'
tiate a lease of the city's system to
the company, securing to the city
the payment by the company. of a
rental on each operating scction oi
s the city's system (as it is placed IN
:. operation) equal to the interest and
- sinking fund charges on the bonds
issued to pay for its construction
!, unless the company has reasonable
Q assurance of being able to charge q
i fare which will enable 1t to meet all
its obligations and pay dividend to
a its stockholders.
= Seventh Under existing law, In
view of the certainty that economic
| conditions affecting the cost of the
!, service rendered will never remair
u static, a lease giving practical as
surance of q return to the company
II sufficient to enable il to meet its obli-
:. cations and pay the rental indicated
to the city and dividend 10 Its
stockholders, cannot be made eXcep
such lease embodies a provision fol
~ the filing from time to time of ne
= schedules in accordance with the pro
% visions of Articles Xxx and NSI o.
y the pending contract and lease.
lie other points brought out by Doctc
Lewis were:
| .YL .,a,la ha Mt opIv ,ou,ysa Il,