Evening star., 1920-02-19
CAPITAL TRACTION
HEAD FOR MERGER
ON BASIS OF VALUE
Continued from First Page.

is greatly desired in Washington. he
believes the public is going to be dis
appointed in some of its expectations
If a merger is effected. For example,
he said. he did not think the public
would be justified in any expectation
Of a reduction in fares.
In reply to questions from Repre-
sentative johnson. Mr.. Hanna ex-
planned what is meant by service at
cost. and the system as now operat-
ing in Cleveland and Cincinnati.
In determining the cost of such
service, Mr.. Hanna said, besides operat-
ipg cost and taxes, there should be a
fixed return on the money invested.
This led Representative Johnson to
ask Mr.. Hanna if that meant he ia
Vored guaranteed return to the in
vestor, Mr.. Hanna replied that where
the corporation is compelled to give
service and limit is placed on it's
rate OF return there should also be
an assurance of living return on the
money invested. He said. however,
that this should be limited to the
length of time the public needs and
demands the service.
Discusses Taxes.
In discussing the question of taxes,
Mr.. Hanna said it was not for the
company to state what it should pay,
but for the representatives of the pub
lie to state the amount of taxes and
how 1t should be assessed. If Con-
gress says the car riders should be
exempt from all taxes, all right, be.
cause it is the car rider who paws the
taxes.
Mr.. Hanna said he thinks the tax
on net income is much fairer than a
TAX on gross earnings. He does not
believe that the rate on net incomes
as written into the Commissioners
bill Is fair either to the company or to
the car riders. He brought out that
the rate of car fare will hive to be
figured 50 as to allow the company to
earn per cent in order to pay per
cent to the investors.
He agreed with the testimony of Mr..
Hamilton and other witnesses. includ-
ing statement by Representative
Johnson, that a mixture of part pri-
vate and part municipal ownership
as proposed in the Commissioners bill
is impracticable and unworkable
Mr.. Hanna said also that he does not
believe it Is good thing for the public
to build facilities to meet temporary
needs, as was done on h street last
year.
Mr.. Hanna also introduced testimony
showing his contention that the Capital
Traction Company. though practically
under the same management during its
entire existence, has won the confidence
Of the public to a greater extent than the
Washington Railway and Electric Com
pany. He said that it had had a unified
organization and no radical changes.
He. himself, had been with the com
pany for twenty-siX years, and served
under two heads.
He thinks this steady management,
has been of great value in the devel.
opment of the Capital Traction sys.
tenn.
Praises w. r. 4 e. Management.
At the same time Mr.. Hanna put
into the record an emphatic tribute
Washington Railway and Electric
Company. which. he said, has made
wonderful improvements, especially
during the last year under most ad.
verse circumstances.
Mr.. Hanna put into the record sta.
tistics showing the difficulties OF
street railway operation during rush
hours due entirely to the fact that the
big percentage of population is em.
ployed by the government and gets tc
work at approximately the same time
each morning.
He showed that on the 14th street
line between $3.50 and 300 o'clock by
actual count. thirty cars carried an
average of ninety-eight persons to
the car, which, he said. was about the
limit of street car travel. In order
to properly carry these peak loads. he
said, the company would have had to
buy fifty-six new cars costing about
$4,000 each and employ extra crews
, costing about $500 a day. He said he
did not blame the public for kicking
on account of crowded street cars day
after day, but it was impossible to
correct the condition.
In reply to questions from Chair
man Mapes. Mr.. Hanna said that at
least 80 per cent of the tie-ups on
both the Capital Traction and w. r,
and E. lines are unavoidably due to
the conduit system.
He disputed a statement made by
former Commissioner Gardiner that
since the increase in car fares the
Capital Traction Company has been
earning IA per cent. He showed that
during the months of November, De-
cember and January, since the in
creased rate has been in effect, the
actual earning has been 90 per cent
on the fair valuation as determined
by the Public Utilities Commission.
He also disputed the statement that
the street car fare in Philadelphia is
only cents. He brought out that
there is also a charge for transfers,
sometimes as much as 8 cents and
that the average rate in Philadelphia
in 1918 was 5.61 cents.