Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-07-06
Utilities Commission Pledged
to Assure 6 Per Cent Re-
turn on Valuation.
MANY DISPUTED ITEMS
MAY ALTER APPRAISAL
Board Said to Have Verified Com
pany's Criticism Of Trans
fer Plan.

pany through the new valuation soon
to be established upon it's property by
the Public Utilities Commission.
Pledged to the policy of a per cent
return. the commission, it was pointed
out last night. will have to increase
the company's rate of fare or provide
other means of augmenting it's reve-
nues, If it boosts the million
dollar tentative rating in the final
valuation that it is now working upon
and expects to announce within
month.
That there will be some increase in
the revised figures. and probably
substantial one. is the outlook on the
eve of the filing by the company. this
week, of a petition for fiat increase
in the rate of fare to cents.
Despite the increasing seriousness
Of the company's predicament. all in
dications are that the utilities board
will delay action on the petition until
it has arrived at the permanent valu-
alton and determined what rate of
fare shall be necessary to enable the
traction concern to earn 6 per cent on
it's fair capitalization.
Must Be Revised Upward.
Belief that the temporary finding of
SIS, 100000, on which the two-cent
transfer order was based, will not be
lowered and that it may be increased
grows out of the commissions ruling
at the time. In it's order the board
said the figure was a tentative one
and that it did not include certain
1t was made plain. however, that the
items already agreed upon would be
retained in the final decision.
Consequently, it is claimed, any
change in the figure necessarily must
be a revision upward. If the COM
mission decides to accept some of the
items in dispute, its rating of $15.-
900 900 will be increased to that
extent.
According to the brief filed in the
case, the company claims value of
$36.OO0,0O0. The difference between
this figure and the commissions ten
tative finding Of value is represented
by many items listed generally as
intangible property.
It is to be seen readily that the
utilities commissioners have a wide
opportunity for increasing their
initial appraisal if they decide to in
clude only a few of the items in
controversy.
;rf~ ;1%
seems to be that the commission will
allow for some additional values. But
whether the total figure will be
swelled to the point of necessitating
an increase in the rate of fare in
order that the company may earn
per cent on the valuation probably
is not known to the commission itself
at this time.
May Abandon Transfers.
Two-cent transfers were designed to
make a per cent return possible
under present conditions. They may
be discarded when the new rating is
announced. They came into existence
to meet an emergency. and it is be-
lieved they will be abandoned if the
straight rate of fare is increased.
In establishing the temporary valu-
alton of SIS, 100000 the commission
stated that the company would be
permitted to earn per cent, or $780,
900. It figured that the years bust
ness from pay passengers would
amount to 100000 and that 2-cent
transfers would produce 5000 900 the
combined returns yielding per cent
on the valuation. According to the
company both estimates will fall far
short of being realized.
The company has submitted data to
the commission in support of it's con-
ings are wrong. 1t is understood that
the board has checked up the cor
poration's figures and found them to
be substantially correct. Some sur
prise has been occasioned, therefore.
by the fact that the commission, of its
enable the traction concern to earn 6
per cent on the s15,Oo0,ooo. which the
transfer order said it was entitled to
do.
The explanation apparently is found
in the fact that the commission does
not deem it wise to issue another
temporary order in the traction case
with the final completion Of the
valuation, on which a permanent
order can be based, so near at hand.