Evening star., 1919-09-05
Question of Increases.


The next portion of the commission's S
report takes up the question of in
creases to be allowed for higher nor
NAL costs as of March /, 1919, in
order to bring the valuation up to
date. The company claims an increase
amounting to weighted average OF
II per cent on the base cost and to
IL per cent on the localized and gen.
eral costs of the cost of production e!e-
ment of fair value by reason of the rise
in commodity and labor prices which
has taken place since 1914. In its find
ing the commission states 1T believes
it has rendered full justice in aScer-
tanning fair value as of July i, 1914,
and then allowing the company the
full benefit of all added costs actually
incurred at the higher prices involved
since that date.
The question of accrued deprecla-
ton also is discussed at length, nu-
merous court decisions being quoted.
The commission concludes that the
company's earnings have not been
such as to justify the deduction, as
the basis for rates, of the fun amount
of accrued depreciation as determined
by the depreciation survey ana cal
culations of the commissions en-
gineerS. The commission considers
that the depreciation survey and cal
culations of the commissions en-
gineers were accurately and properly
made. but for the reasons given con-
cludes that a material lesser amount
shall be deducted.
The commission allows for ma
terials and supplies as of June 80.
1919, the amount of S1l5,oo0. sum :
ming up the commission found the foi-
lowing values as basis ior rates
as of July 1. 1914. with additions as
applying to fair value as of June 30
1918. as follows: Historical costs;
s11.35S. S.75797: cost of reproduction of
physical property. S12.32ol l26; m
tangible elements of value. 81 .34b,2sl :
accrued depreciation, S2,o2i,2o' ap-
proximate accrued depreciation as es-
tjmated with respect to historical
costs. s2,100,234: net additions to
property from July !. 1914, to June
80. 1919, s64o,495.51; materials ana
supplies. S175.00O, and cash working
capital. 100000.
In announcing it's conclusions in the
Capital Traction case, the commission
said:
In determining the fair value of
the property of the respondent com
pany. as provided for in paragraph I
of the act creating the Public UTILITIES
Commission, the commission gives
weight to both the historical cost ana
the reproduction cost But neither of
them is determinative. Each must be
considered in the light thrown upon
the problem by the other, and both
must be considered with respect to the
important matter of depreciation, as
we'll as with respect to Intangible ele-
ments of value not included in either.
such as right of way and development
costs as set up above. The whole
problem has been carefully studied in
the light of all the testimony adduced
in the hearing in this case, and of the
argument of counsel both orally and
in their brief. The acts and findings
of other commissions and of courts in
similar cases have been carefully con-
Sidered by the commission.
After full consideration of all the
evidence in this case. the commission
finds the fair value of the property of
the Capital Traction Company lex
elusive of working capital and ma
terials and supplies) used and useful
for electric railway operations within
the District of Columbia as of July
l, 1914, to be s13,255 100000.
"As hereinbefore set forth. the COM
mission finds the net additions to in
vestment in respondent company's
property from July l, 1914. to June
30. 1919, inclusive. as applying to
property used and useful for electric
railway operations within the District
of Columbia only, to be $640, ,495.51.
"The commission further finds the
amounts to be allowed for materials
and supplies and for cash working
capital as of June 80. 1919, to be $175,-
1000 and S200,000.00, respectively.
"Therefore. the commission further
finds the fair value of the property of
respondent company as of June 80,
1919, used and useful for electric rail-
way operations within the District of
Columbia only, to be s1i,270,44951.
Regarded as Going Concern.
I'm reaching the above conclusions,