Evening star., 1920-02-03
SERVICE AT COST
ON D. c. CARL|NES
IS URGED BY KUTz
The Engineer Commissioner
Would Abolish Proposed
Graduated Tax.
APPEARS AS WITNESS
AT MERGER HEARING

Proposed Plan of Changing Bill
Seems Likely of Encountering Op-
position Among Lawmakers.
/ Service at cost" on the street rail-
ways OF Washington after a merger
OF the two companies has been forced
was held out as a prospect at the
nearing today before the House Dis
trIct committee on the District Com
missioners' bill. the admitted purpose
OF which is to induce a merger En-
sineer Commissioner kutz was the
only witness before the House District
committee, with Representative Ben
Johnson OF Kentucky, the ranking
minority member as chief inquisitor
commissioner Kutz advocated writing
INTO the Dill provision for abolition of
the proposed graduated tax on net
earnings and substitution of the sery-
| ice-at-cost system after a merger had
| been effected.
May Meet Opposition.
Ihat such service-at cost system
may NOT receive friendly consideration
py the committee was shown when
chairman Mapes questioned if this
was nor "a taking phrase which does
not mean any more than the present
law. and when Representative Woods
! OF virginia asked what inducement
would there be for the strict practice
OF economy in railway management
under such system. Representative
BurdicE of Rhode Island and other
| members of the committee indicated
| that they will have to be shown some
decided advantage for the public in
terest before they will approve the
| proposed Service-at-coSt system.
MOST of the time nf be tr-
day was taken up with questions by
I Representative Johnson regarding the
phraseology of the bill and seeking
to have the language of the measure
| made more explicit.
Early in the proceedings Repre-
sentative Zihlman, republican. of
| Maryland, questioned whether it
/ would not be advisable to determine
! on a general policy and then discuss
the wording of the bill. Representa-
tive Johnson replied that he wished
to find out what the bill meant before
attempting to agree on any policy.
Building OF New Lines.
! One of the lines pursued by Mr..
| Johnson in his questioning was who
should determine where new street
car lines are to be built out of the
| fund raised by the graduated tax. he
thought there might be members of
the Public Utilities Commission who
would favor building street car lines
to property in the development OF
which they might have a personal
/ interest. He said he would oppose
any bill Which would allow the Public
Utilities Commission to build lines
| out of this fund to suit its own fancy
without any right of appeal or de-
| cision by Congress.
Pronosed relief of the street car
! lines from the cost of maintaining
crossing policemen should carry with
| it a provision that these policemen
were to be paid the same as othe'
policemen in the District, according
| to another line of questioning by KEEP
resentative johnson.
/ He questioned also at some length
| the proposal to increase the electric
! power charges. Commissioner kutZ
sion believes that justice requires
each class of service should pay It's
| own burden and even if the two COM
panies were merged he felt il was the
| commissions duty to see that eacE
maid its own share He said it WAS
absolutely unfair and un-American
for one class of consumers to pay
higher rates in order that some other
class should pay less.
Representative Benson. democrat. O.
Maryland. thought he saw in one
! paragraph of the bill an attempt to
wipe out any decision of the courts
regarding the fair valuation made by
the Public Utilities Commission Thi
was particularly pertinent. the law
maker said, in view of the fact that
the Potomac Electric Power Company
is now awaiting a decision of the
court regarding the reduced rates
ordered by the Public Utilities Com
mission and that both of the street
railway companies are contesting the
fair valuation in the courts. Com
missioner Kutz said there was no such
intention.
EuuaIfxinE Earning Power.
Represe sentative Burdick. repubh-
can of Rhode Island. questioned why
the tax feature had been written into
the bill; whether il was for the bene-
fit of the public in the District or TO
help out one street car company.
Commissioner KutZ replied that it
was to equalize the earning power
of the two companies. He admitted
that the primary object was to make
it possible for the two street car
companies to get together so that
they could give better service. He
said that the gas light companies
also had asked the Public Utilities
Commission to seek legislation "nich
would permit them to merge.
1t was at this point that Repre-
sentative Burdick obtained fron
Commissioner kutz the statenhent
that as soon as the COMPANIES are
consolidated the proposed taS s
fem should be abolished and the sys-
tenn of service at cost substituted
REPRESENTATIVE Johnson empha-
sized his belief that paragraph
should be written into the bill care
fully covering the question OF VINO
should pay liabilities resulting from
suits now pending on which Judg.
manfs roay be rendered subsequent
to the merger
Question of Suburban Lines.
representative Benson questioned
Commissioner Kutz regarding what
would happen to the Maryland exten-
sion of the street railways when his
seryice-at-cost system has been eS-
tahlished. He said they are now rum
ming at a loss -, Ill,
"Will il not mean that they VIII
have to be abandoned
ice they receive" interjected Repre-
sentative Mapes.
Comm5ssioner Kutz said:
IT don't think they should be aban-
doned l believe they VIII continue
in operation"
Renrescntative Benson asked if it is
not an advantage to the District or
columbia. to have these avenues or ap-
nroach from Maryland. Commissioner
KntZ replied: 81 do not think that the
district Of Columbia ought to pay any
deficit fer operation of roads in Mary
land"
In reply to a series of questions. Com
missioner Kutz said that he estimated
7 per cent return on a fair value of the
cost of investment should be the basis
for the service at-cost system.
Representative Benson questioned
whether this was a fair return for in
vesting, saying:
81 can't see why public utilities COM
missions seem to think that raifWav