The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1920-02-04
PUSH SERVICE
: AT COST PLAN
Kutz Opposes Proposal to
Increase Rates on
Electricity.
HAM TO GIVE OPINION
House Committee Begins
Hearings on Merger of
Street Car Lines.

A sharp tilt over the proposed
! merger of the two principal trac-
ton companies OF Washington on a
service at cost" plan is expected
this morning when W. F. Ham,
president of the Washington Rail-
way and Electric Company. and
FORMER Commissioner W. Gwynn
Gardiner appear before the House
District Committee and give their
opinions on the proposal of Engineer
Commissioner Kutz for service at
cost made at a meeting OF the COM
mittee yesterday.
Kutz strenuously objected to Il e
plan to set the Washington Railway
and Electric Company on its feet
by increasing the cost of electricity
to the consumer. and proposed a
service at cost system which he de-
clared was entirely practical. He
proposed including in the bill a
provision for the abolition of the
proposed graduated tax on net earn
anu the VI q SER
vice to provide for no surplus
profits after the merger had been
completed.
Calls 1t ''TaIking Phrase
Both Chairman Mapes ard Repre-
sentative Ben johnson were skep-
ticaI OF the proposal. Mr.. Mapes
Characterizing it "a taking phi ase
which means no more than the pres
ent law" Representative We DDS of
Virginia and Burdick of Rhode
Island Indicated by their close ques-
tioning of the witness that they
would also have to be shown be-
fore they would support the plan.
Representative Zihlman, Maryland
Interrupted to INQUIRE whether it
would not be advisable to fly upon a
definite policy before discussing the
phraseology of the bill Representa-
tive johnson declared:
Il insist upon knowing what this
bill is about before further discus
SION
johnson suggested that a problem
would arise as to where car line eX-
tensions should be built out of funds
raised by the graduated tax, and
that great care should be exercised
lines on behalf of pet extensions to
the detriment of public service. In
proposing that the street car lines
should he relieved of the expense of
maintaining crossing policemen. Kutz
said the policemen should be paid on
the same basis os other policemen in
their districts.
Representative Benson, Of Maryland
held that the bill as now framed
might wipe out any decision of the
courts regarding the fair valuation
made by the Public Utilities Commits
sion This opinion he based on the
,fact that the Potomac Electric Power
Company is now awaiting a decision
on an order by the Public Utilities
Commission to reduce rates, and that
both of the companies are contestinS
the valuation in the courts. Commits
sioner Kutz denied that any such
danger existed.
May Affect Maryland Lines.
In reply to a question from Repre-
sentative Burdick. of Rhode Island, I
why the tax feature had been in
Guided in the bill. Commissioner Kutz |
said that it was to equaliZe the carr
ing power of the two companies in !
order that they might give better /
service In this connection he said
that the Gaslieht companies were ask |
ing the Public Utilities Commission to |
approve legislation to permit them To
merge. 1t was then that kutz said
that as soon as the companies are /
consolidated the proposed tax system
should be abolished and the service at
cost system substituted.
In reply to a suggestion by Repre-
sentative Benson that disaster mighs
pvertake the Maryland extensions of
the street railways. which, he said. :
are now running at a loss, when a
service at cost plan was instituted. /
Mir KutZ replied:
II don't believe they would have to |
he abandoned. ] think they would .
continue profitably in operation
Commissioner kutz estimated per
cent as a fair return on the invest {
tnent under a service at cost system. /
He declared that such a system would 4
give the companies more freedom. and .
that an automatic service at cost plan .
would cause large fluctuations in the
rates.
The hearing will be resumed this Z
morning at 10 o'clock