Evening star., 1920-02-20
Vice President of Capital
Traction Company Again
Before Committee.
CHAIRMAN MAPES ASKS
POSSIBILITIES OF SYSTEM
Representative Johnson Questions
Mr.. Brownlow as to Com
missioners' Bill.

ranies in Washington is a prerequisite
to institution of a service at cost
system of street railway transporta-
ton, which is generally recognized
as the most practical and fair method
both as concerns the public and in
vestors, John II. Hanna. vice presi-
dent of tie Capital Traction Company,
told the House District committee
today at the hearing on the street
railway merger bill.
1t was in reply to a series of ques-
tons by Chairman Mapes that Mr..
Hanna made this statement Mr..
Mapes sought TO find out how a serv-
Ice at cost plan could be worked out
in the District. under present condi-
TONS. Mr.. Hanna said it could not
lee done with lines which parallel and
that merger is particularly desir-
able here because it would allow the
/ institution of the service at cost plan.
Chairman Mapes persisted in his in
quiries to find out why a service-at-
cost plan could not be put into oper-
alton and the surplus earnings of the
| Capital Traction Company be devoted
to carrying on the Washington Rail-
way and Electric service. Represent
ative Burdick of Rhode Island empha-
sized that this would not be a true
service at cost. as the patrons of the
Washington Railway and Electric
Company would then be getting serv-
ice at less than cost, while the Capital
Traction Company patrons would be
paying for service on cars which they
did not use.
Variation Of Fares.
Representative Burdick also brought
out that if a service al cost plan were
put in operation it would result in "A
! " a-io inn of fo, afa .v,f ha hna
! ing Representative Ben johnson, DEM
ocrat, of Kentucky, questioned Com
missioner Brownlow, and emphasized
his belief that the proposed tax sys-
I tenn in the Commissioners bill. de-
| signed to recapture the excess fare
t given to the Capital Traction Com
! pany when the increase was granted
/ to the Washington Railway and Electric
/ Company does not give any relief to the
Capital Traction car rider who is now
| paying an excess rate.
In resuming- testimony today, Mr..
Hanna put into the record informa-
tion which had been sought by mem
! bers of the committee. He said that
! the Capital Traction Company had
paid last year about $4,000 as its
| share of the cost of maintaining cross
| ing policemen. 1t is now paying at
| the rate of about $4,000. In this con-
nection Representative Johnson re-
called that the Washington Railway
it's more extensive trackage across
! streets is paying more than $4,000.
In reply to u question asked yeSter-
! day by Chairman Mapes whether il
would be possible now to build the
New York street ear system all over
, again as an entirely new project. Mr..
Hanna said he thought any amount
necessary could be raised. He pointed
out that street car transportation is
an absolute need of the community
and that ALWAYS he had 70
establish any public utility that is SO
needed.
But money could not be secured, he
said. to build a new system which
would operate at the present rate.
The value of street car transportation
is unlimited as regards the commu-
nifty. but the rate of fares should be
regulated to meet the cost of service
which includes not only the cost of
operation. but also a fair return on
the investment. Mr.. Hanna explained.
The same principle applies in Washing
ton, he said.
Cost Would Exceed Any Claim.
IF the charter of either or both
the street railway companies should
be revoked" he said, 'and if the pub
lie was compelled to reproduce the
property, the cost for reproduction
would be more than any claim that
the Capital Traction Company has
made for the value of its property. and
the same is probably true with regard
to the Washington Railway and Elec-
trio Company.
This situation will hold for several
years. he said, on account of the cost
of labor and material.
In reply to many questions from
members of the committee regarding
the revenue of the street railway
company. Mr.. Hanna explained that
cnly a small percentage of the Cap
ital Traction Company revenues go
into a return on the investment. But
15.S per cent was so used in 1919.
Eight or ten years back from 40 To
43 per cent was distributed in per
cent dividends. In reply to Chair
man MapeS. he said that the percent
age of revenue paid to conductors
and motormen Is 20 y per cent me
total for. wages and salaries is 40 per
cent. and for power 81 per cent. The
total for conducting transpcrtaticn
is 29.7 per cent, depreciation, per
cent The total operating expense in
1919 was 66.2 per cent, the remainder
was in taxes. 60 per cent; interest,
& per cent; dividends, l5.s per cent;
surplus. 81 per cent
Mr. Hanna pointed out that while
the percentage paid in dividends had
of wages has gone up more than 100
nor cent. In 1915 the average wage
per hour was % cents. now 1t is about
80 cents.
In discussing the eHect OF IOuT
changes in rate of fare upon traffic,
Mr. Hanna said that there was no ma
tariaI change in the number of rev.
euue passengers except from the last
change in fare to cents or four
tickets for a quarter. and he consid-
cred this only temporary.
The whole question. he said. is in
determining what is a reasonable rate
of fare after determining what con-
stitutes the whole cost Of service. II
that could be settled, he told the COM
nittee as, well as the dispute as to
value of the properties on which to
hase a fair rate of return. the whole
nroblem would be solved.
Buying Power Of Cents Noted. .
Emphasis was laid on the fact that
cents will not buy now what 1t
would five years ago in bread, milk,
sugar or any other commodity. The
nublic should not expect to buy more $
in street car service today than IL
could five years ago for five cents,
the witness said.
Il the old rate OF fare that existed
nrior to 1918, six tickets for a quar.W
was i'm operation. and IL the pubi.S
had obligated itself to pay 6 per cens
on the fair valuation as determine
by the Commissioners, the public
would have to meet a deficit in street
car operations in 1919 of $1.eS1. .00o.
The COMMISSIONER fair valuation"
.c-Atinued on age e Olupz-