Evening star., 1919-09-23
8PER CENT RETURN
SOUGHT BY WIRE.
Produces Witnesses at Hear
ing to Show Present Rate
insufficient.
WOULD INCREASE FARE

Washington Railway and Electric
Company officials produced witnesses
before the public utilities commission
at public hearing this morning to
show that the present rate of return
on securities was not sufficient to in
sure investment. and that an per cent
return would be necessary. An per
cent return, according to company Of
hcials, would supply approximately
s1.3Oo.o00 for payment of interest
charges on bonds and stocks. and
would mean at least a six-cent fare,
and possibly a seven-and -one -half-cent
rate.
Visitors Testify.
H. N. AddinselI of Harris.
Forbes & Co.. New York, was called
as the first witness as an expert on
bonds. He testified that he believed
that an per cent return on bonds
was not unreasonable, speaking in
general. and that it was not uncom-
mon for industrial concerns to re-
ceive a greater return on securities.
In reply to a question by w. NICK.
Clayton. representing the Federation
of Citizens Associations, Mr.. Addin-
sell declared that a merger of two
lines would place public utilities Sc
curities on better oasis along pure
ly economic lines.
One Of the principal objects of the
company's case was to show the un-
desirability of securities of a public
utility company. To this end. Fred G..
Boyce. vice president of the Mercan-
tile Trust and Deposit Company of
stand. He testified that such securi-
ties were very unsatisfactory" and
that his company very seldom invest
ed in them.
He declared that his company had
recently secured a receivers certifi-
United Railways of st. Louis. where
the court had issued An order allow
ing the per cent interest charge.
He testified that the earnings at pres
ent were approximately sixteen times
the interest charge.
Public Represented.
Among those present at the hearing
representing the public were George
A. Ward of Columbia Heights Cit
Gems Associations. w. B.. westlake,
president of the Federation of Cit
liens Associations, and W. NICK.
Clayton ,of the Federation of Citizens
Associations.
John S. Barbour, attorney for the
company. conducted the examination
of witnesses. President w. F. Ham
and Vice President s. r. Bowen also
were present. The District Commits
sioners sat as the utilities commits
sion.
Describes Financial Troubles.
Mr.. Addinsell was the first witness
called this morning, and testified for
an hour about the financial condition
of street railway lines throughout the
United States. He said expenses of
street railways in most cities are run
ming ahead of their earnings. He called
attention to the fact that is per cent
of the lines of the country either are
in the hands of receivers or have been
abandoned.
sci for the Washington Railway and
Electric Company. he testified that
street railway securities have little
standing on the market.
Counsel for the company asked the
witness If street railway, in order
10 De successful ana grow, did not
from time to time need new capital
invested in it to cover the cost of
development.
The witness answered in the affirm
ative and added that the only way
that new capital could be obtained
was by making the securities attrac-
tive.
What Financiers Consider,
Mr.. Addinsell testified that a bank
ing house that contemplated making
loan to the Washington Railway
and Electric Company would espe-
cially take into consideration the fact
that there are two companies in the
District and would consider whether
the other company had the short
hauls. which he characterized as 1.-The
cream" of street car business
Asked by Attorney Barbour what
he thought of the order of the Public
Utilities Commission in May setting
per cent as the basis Of return on
the company's securities, the witness
said it did not strike him as a fair
rate under present conditions.
Mr.. Clayton objected to Mr.. Addin-
sell expressing an opinion on the or
der of the local utility commission on
the ground that he admitted earlier
in the morning that he was not very
familiar with the situation of the
company or local conditions which
ton in making it's order. The witness
was allowed to continue