Evening star., 1920-02-04
W. 6. Gardner Suggests
Congress Submit the Issue
by Resolution.
WOULD OBTAIN DECISION
BY QUICKEST METHOD
Witness Also Recommends That
Public Utilities Commission Be
Made Independent Body.

! railway troubles. which are now before
the District court. on an appeal by both
compan es from their fair valuation BY
the Public Utilities Commission, should.
by resolution of Congress. be tagen to
the Supreme Court of the United States,
and that in this way the entire question
could be settled and a merger effected
within six months. was made by former
Commissioner w. Gwynn Gardiner at
the hearing today before the House Dis
trict committee
| 1t would take at least five years to
get a decision from the Supreme Court
IN thls matter in the ordinary course
oil procedure, Mr.. Gardiner told the
! committee.
That the board of District Commits
sloners and the Public Utilities Com
mission should be distinct bodies. and
that the Public Utilities Commission
required entirely different type of
men from those called for by the
duties of District Commissioned. Mr.
Gardiner also urged at the hearing
The Capital Traction Company is
the most profitable street railway
company in the country. and one of
the rev street railway companies that
| mas not had financial ha I'd row to
noe during the last couple of years
Mr.. Gardiner said in the course of his
testimony.
Intricate Legal Points Discussed.
| The hearing today was occupied
principally with intricate legal dis
cSsslony in which the lawyer members
or the committee. such as Chairman
| Mapes, Representative Woods of Vir-
glnia and Representative Benson of
Maryland took prominent part
Mr.. Gardiner quoted at considerable
length court decisions, precedents and
citations that affect the local street
l l1ra Il
treating the Washington franchises as
OF no value. if Congress should in
st1tute condemnation proceedings
| they would have to pay each company
the cost of reproduction as a going
f: concern less depreciation. He said
the Supreme Court had ruled repeat
edly to this general purpose. He ar
gued at considerable length with the
| lawyers on the committee regarding
the rates that public utility should
be allowed to earn. and pointed out
that il various communities and ow-
ing to peculiar conditions that rate
1 varied, but that dollar should be
preserved with the rate of interest
a utilities company must pay for capital
to keep the business in operation.
States Requirements.
The condition in Washington cannot
1 be disturbed by act of Congress, Mr.
Gardiner said, without saddling upon the
|
| the street railway property at the cost
| OF reproduction as going concerns. He
went into details regarding the many
| considerations that would have to be
! taken into account in estimating the
| value of these properties He said that
| the committee must take into considera-
tion all circumstances, TO see what is
necessary to carry on the business and
make IT attractive for capital to invest
he emphasized that in the Public
| ff.A- sr.Kta ase-r-s
member, there was a decided differ
ence of opinion as to whether there
was a difference between determinine
fair valuation for the purposes Of
rate making and for the purposes Of
sale or market value. He brought
out that an expert testifying on this
point before the commission had said
there was no difference. This devel-
| oped sharp clash at the hearing
Engineer Commissioner Kutz asked
to have put into the record with Mr.
Gardeners statement later correspond.
ence with this public utilities expert
tending TO show that he had not
meant to say any such thing as that
rate-making value and values for the
purpose of sale would be the same
George Z. Hamilton, president of
the Capital Traction Company. said
he wished to put into the record g.
statement that any alterations of the
record of the hearing before the Pub
uC ClllltieS COMMISSION maze through
correspondence would be entirely un-
lawful and that the street railway
companies had been given no oppor..
tunity to safeguard their interests.
He said that the testimony as quoted
by Mr.. Gardiner was correct and that
could be substantiated by the affidavit
of at least a dozen persons
Insist Upon Principle.
Representatives. Benson of MARYLAND
and Woods of Virginia, with others.
insisted that there are many court de-
cisions showing that there is no diff
ference between valuation for rate
making and valuation for sale pur-
poses.
In reply to another question from
Mapes. Mr.. Gardiner said that the fair
valuation as made by the Public IT'LL
tiles Commission could be used a
basis for computing what should be
paid to the street railway companies
in condemnation proceedings insti
tuted by Congress.
Chairman Mapes asked If Congress
should determine to own and operate
the street railway companies and pay
for the properties could the valuation
by the Public Utilities Commission be
used. Mr.. Gardiner said yes" as that
valuation might be finally decided by
the court
In rpIy to another question from
Mr. Mapes, Mr.. Gardiner said there
would not be need for additional con-
demnation by Congress if it decided
to force a merger or take over the
two lines.
Mr.. Gardiner suggested what he be-
lieyed is a practical course of pro-
cedure. He said: Let the two rail-
roads take the fair valuation as de-
termined by the Public Utilities Com
mission and approved by the court.
Then let the stock of both companies
be taken over by corporation and
stock be reissued on the basis as de-
termined by the court.
Denies Right of Appeal.
In discussing the language of the
bill Mr. Gardiner called attention OF
the committee that it would take
away all right of appeal from the
Pubiic Utilities Commissions decision
to the court. He thought the tax
provisions are confiscatory and thar
a per cent return on public utilities
in the District of Columbia is proper.
He said he based this on various de-
cisions of the Supreme Court and his
own intimate knowledge of local con-
ditionS.
During the discussion of the rate
charged for street railway rides in
other cities and of the financial diff
ficulties of street railway companies
in all parts of the country il was put
into the record by w. +. Ham, presi-
dent of the Washington Railway and ,
Company that no street rail-
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