The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-01-17
Ancient LOSSES in claim.

AnClent Losses In claim.
Al. ~ Richey. the state commissions
expert, on cross examination, after he
had testified that by adding all develop
ment costs claimed by the street rail-
way interests, the valuation would be
close TO $1S,000,000, admitted that this
item OF development cost represented
In fact, not the cost OF building the
properties, but the losses sustained in
the earlier years OF the company. on
being asked by Mr. Armstrong II those
costs and losses were not sustained by
several companies which operated the
old street car lines years before the
Memphis Street railway was organized,
he admitted that such was the fact.
IN other words, the street railway
interests age seeking to have the peo-
pie OF Memphis, who ride upon the
| street caf nay for losses sustained
| in the atratdSl ofs the Old Citizens
coIlpans the old dummy line out Mati-
son avenue, during the years between
1896 and the purchase Of the proper
ties by the present company, The fact
that losses were sustained In fact II
was argued by the city attorney, de-
preciated the old properties, so that
they were taken over by the present
Memphis Street railway interests at
less than the original cost. That was
In 1898, and within a few years, 1t is
claimed, those losses had beon re-
| couped by the new company,
Mr.. Tutwiler attempted to testify as
| to the cost to reproduce the present
| properties, giving his estimate at $40,
100000. but that is not the basis upon
| which the state commission proposes
| to fix the valuation
| The city attorney also, in reference
to proposed allowances for replacement
| and renewal. in other words main
tenance of the properties, asked the
| commission to issue an order fixing
| such allowance and also ordering that
| such allowance shall be held in reserve
| only for that purpose and shall not bt
| expended for any other purpose.
| He also asked that when the basi:
! of valuation is fixed, the city be au'
| thorized to scrutinize the expense aC
| counts of the company or that monthly
statements be made to the state com
| miSsoon and copies be filed with the
| city commissioners. He also asked
| that the state commission. before fix
| ing n rate of fare sCrutinze the eX
| penses OF operation for the past year
| These showed n tremendous increas'
during the months of November ant
| December.
The hearing was adjourned until thu
| commission shall have formally fixed {
| rate base that Is the valuation upoI
| which the company Is to be allowed t
| earn returns. Testimony as to the op
| Grating expenses for the past year VII
then be taken, and the argument al
to the proper rate of return will b.
made. Mr., Armstrong, Il. b. klewe
and Horace johnson. commissioner o
nublic utilities, who attended the hear
ing returned to the city Saturday morn
ing. II is probable, they believe, tina
the hearing will be resumed within tw'
weeks or less. At that time, also
argument as to the abolition of III
skIp-a-stop operation of the ears wi
be taken up ..
Commissioner Harvey II. Hannah wa
not present at the hearing being on
spaach making tour with Gov. Roberts
commissioner Welsh showed his usut
close interest in the hearing, asking
number Of questions Of the witnesses
on the question of the rate OF interes
to be allowed he asked number
questions Of the experts.
Mr.. Armstrong also produced proc
that the state commissions OF Yves
Virginia and Maine and numerous 9th
ers had uniformly declined to inctud
the item of development costs, or ol
| discarded property, in the valuation
| fixed in street railway cases, on th
ground that as the people could not b
! refunded the dividends or profits earne
: bv. street railway companies, neithe
I could they be expected to pay fc
superseded property the rule workin
, both ways