New Britain herald., 1918-03-25

mitted on the question of valuation it appears that ''In 1907, there was made a valuation of the property of the New York, New Haven & Hart ford Railroad, including it's electrical lines; with this as a basis, supple mented by the detailed records of the new work and the reconstruction since that date and such field meas urements as were necessary to com plete the information, the property of The Connecticut Company was listed. To these quantities there were then applied prices representing the average for the five-year period 1910-1915, this period being chosen as just outside the abnormal price conditions resulting from the war In addition, as a matter of interest a second figure was obtained by ap- plying to the quantities, prices as of November 1, 1917. Speaking in round numbers this last value was $102, 1000, 100000 as compared with 57,400, 100000 for the 1910-1914 price level"
 It further appeared that the est- mated valuation of The Connecticut Railway and Lighting Company's lines, separate from the other property in-
 
 terments amounting in round figures to $4,000,000, made by respondent since assuming the operation thereof under lease. This amount, added to the above item of S36,458,385 would make the total property and lines owned and operated by respondent $40,458,3S5 and the total value of all the property and lines owned by re- spondent $45,458,3S5. Respondent is obligated to pay s1,O5O,00O annual rental from lines leased to The Shoro Line Electric Railway Company.
 If the value of the company's prop erty were vital in determining the is- sues involved in this case, it would be necessary to make a more critical an- alysls of the valuation submitted. par tcularly for equipment, power, and general and miscellaneous accounts but, as stated in petitioners brief Ion the present hearing it is unnecessary to consider figures on valuation with view to determining what is a fair return for the company, because the company does not appear to be earn ing even fixed charges
 Financial Operations.
 Much evidence and many exhibits containing statistics as to the finances and financial operations of the com- pany were presented.
 Rate of Return.
 There is no universal rule defining the proper rate of return. Courts and commissions have allowed from a minimum of five per cent to a maxi mum of from eight to ten per cent. The current market price of money. character 0f ,,ti bility and duration of service, it's speculative future and financial haz- ards, are.some of the equitable consid- erauons which tend to prevent the adoption of any fixed universal rate of return.
 The question of proper rate of re- turn, however, is not material or ne- cessary for the commission to deter mine in this case, as the minimum rate, without being confiscatory. on a most conservative valuation of the company's property as a whole, would be considerably more than the pres ent rate of fare will produce
 As To Reasonableness Of Rates
 Complained Of.
 In determining the reasonableness of a company made rate or in esta h. fishing commission rate, many con. ditlons and conflicting theories are in- vowed, but certain fundamental prin- clples remain unchanged It may be assumed, therefore, that the prime ob ject of a utility company's operations Is to serve the public within it's oc- cupied territory; that such a service is not gratuity, but one costing money, in legitimate capital invested 1n overhead expenses which the people served must pay for.
 The service rendered is for the nub- lie, and while an obligation rests upon the chartered utility to render serv ice, an equal obligation rests upon the pupnc so served, to pay sufficient rates therefor as will enable the company. properly managed and economically operated, to obtain a fair return upon the value of it's property so used.
 The management and economical operation of any large company are always subject to improvement, but if the standard of a given company compares favorably with that of a majority of similar companies it's failure to reach the proper mark of efficiency would apparently be due to general. rather than local, conditions The measure of success along this line is generally reflected by the ra- tio of overhead expenses to operating revenue and operating exl~ nses. The percentage of overhead expenses of the respondent for the five fiscal years 1912 to 1916 inclusive, to it's operating revenue and operating ex- penses, is compared with that of The Bay State Street Railway Company the Springfield Street Railway Com pany, The Worcester Consolidated Street Railway Company, and the New York State Railways Company, in Exhibits Nos. 65 and 66 in evil dence, and the respondents per cent. of overhead to operating revenue and