Evening star., 1920-02-11

The Commissioners Dill Wouio ld1
the railway earnings so p cen,
above per cent and rs pc cen'
above per cent. Mr.. Ham said that
while more decisions fixed the rats
at per cent, the average is PEI
cent in recent decisions. He said ina,
the Supreme Court in one case mac
ruled that a rate of only per cent
a year was confiScatory-
The earnings of other companies
throughout the states and decisions
with regard to the taxes upon them
were quoted by Mr.. Ham. He also
quoted statistics showing that other
Industrial concerns are making an
average of 10 per cent and he clteo
a typical group in which the earnings
of more than so per cent of the grouI
was in excess of . per cent. He SAID
this showed the futility of the hope
that private capital Will flow lntC
public utilities unless an attractive
rate of return is given.
How p. f. y. Co. Plant Was Built.
An interesting account Of the way
In which the Potomac Electric Pow
er Company's plant was built up was
given by Mr.. Ham. He said that
= when. by authority of Congress. the
Washington Railway and Electric
Company was organized to take over
the suburban companies, the power
. plants then in existence were en-
tirely Inadequate for the future
growth of the city. He said that the
Potomac plant was one of the first
in the United States to use the steel
turbine and that 1t bought the one
on exhibition in the st. Louis expo
sition and bought and installed an
other duplicate unit.
II decided to build 4 modern plant
designed for expansion many years in
the future and that the Benning plant
was built in 1906. The Washington
Railway and Electric Company went
in with the Potomac Electric Power
Company on this project, lending its
credit to finance the undertaking. He
showed the growth of the Potomac
electric plant during The last thirteen
or fourteen years. In 1906 the capacity
of all the power plants of the Wash
ington Railway and Electric Company
and the Potomac was 1000 kilowatts.
Today the capacity of the Benning
plant is $1,000 kilowatts. The revenue
for the sale of current in 1906 was
1914, 600. Today it is S3.5O0.O00.
The cost of coal then was S3.16 a
ton and now $50, but with that big
increase in cost, power today is pro-
duced cheaper than it was then. He
emphasized that the progress made
by the Potomac Electric Power Com
pany and the economies brought
about were through the lead of com
bined service for the Washington
contractual association with the resi-
dent users of the electric power. He
said that it was this joint use of
3 facilities of the Washington Railway
mac Electric Power Company which
had made a giant enterprise able to
cope with the requirements of the
National Capital during the war. In
illustration of how it has reached out
and served suburban communities Mr.
Ham said in 1906 it had 1000 Gus
[. toners and now $4,000
The Public Utilities Commission, by
Its policy of fixing rates and of max
ing what 1T called a fair valuation
has insisted upon denying the Wash
tngton Railway and Electric Com
pany. Mr.. Ham said. any of the ad-
vantages from the ownership of the
f, Potomac Electric Power Company,
which it had built up. Mr.. Ham said
he foresaw just what is happening
and he urged the Public Utilities
Commission not to reduce the rate
for power service until the earnings
of the street railway company were
: adequate.
This is one of the grounds for re-
lief we think we are entitled to at
the hands of the courts in seeking a
stay of this order" Mr.. Ham said
In reply to questions he said the
rate of cents per kilowatt hour is
unreasonably low and not compare BILE
with the rate in other cities. At the
suggestion of Representative Zihl-
man of Maryland. he put into the rec
ord the rates in other cities, but in
this connection he emphasized that to
decide upon a fair rate the character
of service must be considered He
then explained to the committee the
peculiar situation in Washington,
where there are no large industrial
users and where there would be an
excessive peak load at certain hours
but for the steady service required
by the street railway companies.
During this nlleSflnninp III
brought out that the Potomac COM
pany makes its power at a cost OF
6.775 mills per unit, as against the
cost of more than I cent by the Capi.
cal Traction Company's power plant.
Chairman Questions.
Chairman Mapes questioned the wit
ness If the power company and street
railway company were considered as
distinct entities whether the eight
cent rate on power would yield fair
return for service rendered.
I'D say not" replied Mr.. Ham. Here
he explained that he is confident the
courts will not sustain the valuation as
determined by the Public Utilities
Commission, and that therefore when
the courts allow the higher valuation
the company is contending for the
rate of return fixed by the commission
would be considered confiscatory
Summarizing the situation, Mr.
Ham SAID the need for relief is ap.
parent. The need for relief as it af.
fects the public is apparent Relief
can come, he said, in a measure
through the legislation now under
consideration. If Congress desires tc
give relief in that form the Wash.
ington Railway and Electric Com
pany will welcome it
"If Congress feels that no othe,
change should be made in the method
of settling the situation other thar
as the Commissioners recommend We
will have to be satisfied Mr.. Han
said.
He pointed out. however that ther,
is a way open for Congress to be OF
active assistance in solving the prob
lem if il feels that it is a proper
course to pursue. He said that tn,
difference between the Capital Trac
tion Company and the Washington
Railway and Electric CompanJ exist
ed just as much in 1900, when Con.
gress authorized the organization o1
the w. r. & E., as it does today. Tn.
Capital Traction Company was theI
ton Railway and Electric CompanI
was organized by direction of Con
gress in order that the public Nigh
be served. and in the public interes
the suburban lines were brought to
gether.
It is absolutely indisputable, he said
that it was the intent of Congress a
that time, specifically written into tht
act, that the Washington Railway ant
Electric Company should benef
through its ownership of the stock o.
the Potomac Electric Power Company
which Congress expressly said i
should hold.
The Public Utilities Commission, HI
pointed out, had disagreed as to wha
Congress then directed.
Notwithstanding that our who'll
financial structure has been built VI
on what we interpreted to be the in
tent of the then Congress, we mus
abide by your decision. Everything