Evening star., 1921-03-21
Thinks Traction Companies
Should Reach Compromise
on Valuations Disputed.
STEP IN RIGHT DIRECTION,
SAYS Ex-C0MMISSIONER
Banking and Financial Circles Also
Behind Program-See Possible
Basis for Agreements.
RY John l.. MARTIN.
BY JOHN l.. MARTIN.

BY JOHN IL.
Former Commissioner w. Gwynn
Gardiner. who gave dissenting opin-
ions in the street railway valuation
cases, is going to re-enter the arena
of public utility discussions by ac-
lively supporting Commissioner Oys-
ter's suggestion for a compromise on
the valuations which would hasten
merger Of the local traction systems
He announced today his intention
of addressing a communication to the
Public Utilities Commission urging 1t
to make preliminary inquiry to de-
termine the possibility Of adjusting
differences between the commission
and the railway companies.
Court decisions rendered since the
valuations were announced by the
utilities board will be quoted by Mr..
Gardiner in support OF the position he
took in his dissenting opinions. He
bic bearing on the situation at pres
ent.
Commissioner Oysters proposal
that an effort be made to bring the
commission and the traction com.
panies together on the valuations
with the view of establishing basis
for a merger and ending what prom
ises to be a long g-drawn-out court
fight, is most opportune," said Mr..
Gardiner. "1t is a step in the right
direction and one that might lead to
results of. great benefit to the people
of Washington. The suggestion is
worth trying, and I trust that Com
missioner Oysters colleagues on the
board will see the matter in the same
light"
Bankers Favor Plan.
Banking and financial circles. it de-
veloped today, look with much favor
upon the plan. They appreciate the
obstacles in the way OF ironing out
the difference Of several million dol
lars which exists between the values
found by the commission and the rat
ings claimed by the companies. How
ever, they believe that, with the pres
ent dema nd for a merger. all interests
invos we'd might be willing to make
which would hasten the
bringing together Of the traction lines
in the Interest Of better service and
doubtless cheaper fares.
Robert n. Harper, president of the
District National Bank, said he be-
lieyed the holders OF the traction Sc
curities generally would indorse the
suggestion Of Commissioner oyster.
He would not predict that COM
siders. there are possibilities in the
situation which should be investi-
gated.
Commissioner Oyster has not pre-
sented his plan to. the other MEM
bers of the commission. Col. Kutz and
Commissioner Rudolph. but expects to
take it up with them at the board
meeting this week.
He is Investigating the question of
whether the commission. having
found a valuation as required by law.
has authority to change it. There ap-
pears to be some divergence of opin-
ion on this point.
Former Commissioner Gardiner
takes the position that the commits
sion has full authority to reconsider
its ratings, and IN his communica
tion to the commission IT is his in
support of this view.
The PrlneiDal Differences.
1t is believed generally that were
both the commission and the COM
panies disposed to make concessions
on the property ratings a basis of
agreement could be arrived at with
out extensive hearings or detailed re-
views of the cases being necessary.
1t is pointed out that the principal
differences relate to intangible values.
and that. questions Of law rather than
Of fact are involved mainly in the
Of these values. A case
in point is the refusal of the commits
sion to allow the Capital Traction
Company ss.15o.0oo: which was paid.
With the approval of Congress, for
good will and franchise
at the time the Rock Creek Railway
Company (now the Capital Traction
purchased the Washington
and Georgetown Railway Company.
The total price paid in that transac-
tion was $10.750.ooo. but the commits
sion allowed only what was shown to
have been paid for physical property.
Commissioner Gardiner. in his dissent
ing opinion. took the position that the
full amount should have been allowed,
sincp It was actually invested.
Had the commission and the Capital
Company during the valua-
tion hearings been able to adjust the
Rock Creek Company claim. 1t is be-
Iieyed that other differences between
them could have been settled at that
time.
Another big gap between both the
traction companies and the commission
results from their divergent views as
to the proper method of bringing the
valuations up to date. The valuations
are dated as Of July l, 1914. and the
holds that to make them
effective as of today it is necessary
only to add capital expenditures which
have been incurred since 1914.
At Odds Owe. Normal Base.
The companies, on the pther hand,
insist that values of 1914 do not con-
stitute a normal base upon which to
rest the valuations. They maintain
thar prices will never return to the
1914 level and that the commission
should incorporate in its ratings a
percentage OF increase based on an
Of normal prices. so
as to make a proper and fair value
as of today for rate making purposes
This view also was sustained in the
dissenting opinions given by former
Commissioner Gardiner, who today in
dicated he would give the commits
sion new light on this point in the
he shortly will ad-
dress to, 1t.
Mr. Gardiner and other ATTORNEYS
who have looked into the question
are inclined to the belief that the get
ting together OF the commission and
the companies on questions relating
values may be accomplished without
great difficulty.
1t is their opinion the physical ele-
ments should be taken up first, and. il
satisfactory progress Is made in ad-
justing them. effort should be made
to solve the problem OF intangible
values.
There was every indication todav
that Commissioner Oysters proposal
had struck responsive chord with
the public, and there was expected to
follow as result genuine revival
of agitation for merger which
might be effected before the next Con-