The Washington times., 1920-01-27
HEAR|NGOPENS.
OND.C.MERCER
Commissioners kutz Explains Ad.
vantages OF Proposed Unified
Traction System.


inSs on the bill to provide for a mer-
ger OF the traction lines OF Washing
ton, Commissioner Rutz, who pre-
sented tho measure today before the
House District Committee, opened
many avenues which will lead TO eA-
haustive investigation OF the street
car system before the hearings are
closed.
Commissioner Kuts will be follow
ed on the stand today by Commits
sioner Brownlow who will amplify
statements brought out by the engl-
neer commissioner in support OF the
measure by which 1t Is hoped to solve
Washington's acute street railway
situation.
Many Attend Hearing.
Formal opening of the hearings this
morning before Congressman Mapes'
committee attracted wide attention
The committee room was crowded
with officials OF the District govern
ment and OF the Public Utilities Com
mission and OF the two street rail-
way companies.
William F. ham, head Of the Wash
ington Railway and Electric Com
pany. and George u. Hamilton. presi-
dent OF the Capital Traction Company,
attended the hearing. The two rail-
way executives will testify before the
hearings are closed.
Commissioner Kutz opened the
hearings with virtually the same
statement he made before the Dis
trict Committee last Thursday. when
he laid the case OF the Washington
Railway before the Congressman and
explained in detail the merger plan
proposed by the District Commission
era
Disparity In EarninGA
Commissioner Kutz referred to the
disparity in the earnings OF the two
traction systems as one due wholly
to the difference of location rather
than of operation.
The actual value OF property of the
Capital Traction Company located in
the District of Columbia was about
s14,250, 900 July /, 1919, and for the
washington Railway and Electric
Company about s16.5oo. 900, although
it operates twice as much mileage.
Despite this disparity between
them, he explained. the tax on the
gross income of the two companies
are the same.
"This strikes us as most inequit-
able" he said.
ave make this suggestion: That
this inequitable tax be modified, and
in lieu of a tax on gross receipts
that you substitute a graduated tax
on operating income, allowing per
cent earnings on valuation. as deter
mined by the Commission"
Would Solve Problem.
Mr.. Kutz defended the proposed
graduated tax as a device for meet
ing the peculiar situation in Wash
ington. He declared 1t would tax the
two companies in proportion to the
earnings they enjoy.
1T is far from our thoughts to
penalize the Capital Traction Com
pany," he protested.
"The really important thing in this
bill is contained in the tax system,
said Commissioner kutZ.
He declared that while the Com
missioners believe a merger OF the
two systems would eventually solve
washington's street car problem, Con-
gress ought to bring about this
merger by acquisition OF the proper
: ties, the real purpose OF the tax
change Is to equalizo in somo degree
the earnings OF the two companies.
He believed also that the COM
panies should be relieved Of the bur-
den OF maintaining traffic policemen
at street railway crossings ut an an
nusl cost Of $50, 600 or 100000. which
must be paid indirectly by the
patrons of the roads. He character.
iyed this as an unfair burden" for
them.
The committee appeared interested
in the fact that the Washington rail
way has asked for further advance
in rates from the T-cent fare, as It Is
only earning 81 per cent under the
present rate, compared with 8 per
cent for the Capital Traction Com
pany.
Talks OF Raise.
He believed IL would be a bad pol
icy to give an advance TO the Wash
ington Railway Company and not 10
he Capital Traction Company. He
declared It would cause a shifting OF
patronage from line to line, and be-
cause OF the higher rate, the wash
ington Railway Company would lose
,pt lesst half OF its patronage.
Tho community as whole would
suffer, he said, and added that he be-
lieved it better TO continue to let one
company get a higher income than
inconvenience the public,
Congressman Woods Of Virginia
suggested that instead OF increasing
he fares Of the Washington Railway
and Electric Company, tho rates for
electric power to tho public furnished
by the Potomac Electric Light and
Power Company be increased to make
up the difference.
Since the power company and the
railway company are affiliated, no
said, the traction company would
benefit in the end through higher
rate for electric lighting.
Colonel Kuts did not agree with
this plan at all. "The bulk OF the
power is not consumed by the people
who ride on the cars, but by manu-.
racturers and business houset," he
said. lie protested that 10 increase
the rate for electric light IN order
TO meet tho deficit OF the Gtrcct car
company would be imposing an un-
fair burden on a Binsled.out pli
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SUES FOR $4,000.