Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-12-10

high rentals paid to the underlying
companies, will have to be settled by
the colossal financial interests involved
and the Mittcn management of the
! operating company. All this is inde-
pendent of the effect Of n greatly re-
duccd valuation on the rate or fare.
The company began the valuation of
its properties on July L, 1919. The
valuation Of the company is based on
the reproduction value as of June 30,
1919, when prices were close to the war
time high Dpak. The submission of
the company figures to the Commis-
sion began on September 90 OF last
wear, The company Is expected to con-
| cludc it's case in the week of December
| 10 next. The city will then, accord
| ing to present plans, present its figures
next month through Samuel ROScn-
haum, Assistant City Solicitor in charge
of transit matters Mr. ROsenbaum
nroposes to offer all his data on one
Gov. 1t will then be up to the Com
| mission.
The city feels that the compNny's fg-
urcs nre so eXtravagant that Mr.. ROs-
nnhaum will not even cross examine the
c0mpany's experts. Mr.. ROsenbaum's 9
valuation will be based on the cost of
reproduction at the time Of production.
The city will point out that not only
has the company used war time prices,
but has used one date for the detcrmina-
ton of those prices. This is not usual.
Generally an average o. the prices for
four or five years is arrived at. Fur
thermOre it will be argued that it Is not
fair to use the cost of reproducing
| "brand ncw.' Depreciation Of about
- per cent should be allowed for, it is
urged.
al = los
Up to date the company has completed
its valuation of tangible properties. The
figure for these Is Il total of S2J2, I29,
742. OF this total SlGG, 747 800 repre-
sents the value Of physical proper
ties actually in use. An attack by the
city on this total, dcducting p per cent
for depreciation and knocking off 40
per cent for war time prices. as was
done in the Reading case. would lower
this figure 10 about $40 900, 900. Then
the company has included in its grand
total the sum of 81 ,0O9. 1877 for m!scel-
laneOuS unused properties. The city may
ask to have this total thrown out on
the ground that the property in ques-
ton IS not used for the public service.
The company's valuation of its over
head, that is engineering, administra-
ton, legal, organization, working capi-
tai, taxes during construction. interest
during construction, loss OF fair return
while property is not in service. and
| financing (the cost Of getting the capt.
tal), is $Sl ,073 ,04G. This total is likely
| to be hOtly attacked By the city $ valua-
ton. particularly such sums as close
to S23 900, 900 for financing,
The big fight by the city will be CEN
tered in attacks on the huge overhead
/ charges and the intangible values yet
! 10 be offered by the company. The in
tangible factor offers the company q
! chance 10 swell the valuation by mil
| lions and By reason Of the fact that the
values are intangible, the company
! hopes it will be hard for the city to
see through them.
Coleman J. Joyce. the company
! lawyer, has indicated to the Commits
/ sion that the intangible values will in
! clude: cost of consolidation, going
concern value" and "0ther clements of
value All these OF course are highly
! theoretical but Just the same they add
vastly to the valuation figures, 1t has
been suggested that among the clements
Of value may be listed the value OF the
Mitten management for which Mr. Nit
ten receives high salary
Cut In Reading Case
on November - last the Comruls-
sion reduced the Reading carfare from
eight 10 seven cents and fixed valua.
ton Of SO, 900, 900. This tigurr was co
per cent Of the compuny'S 100000 600
valuation, which wu4 based on war
prices less depreciation. Thus 10 per
cent was sliced off for war prices.
This valuation by the commission
meant that the Reading system was
valued at 500, 900 mile On that
basis the 100 miles in Philadelphia
would be valued at only S42 900 900.
This. Of course, IS admittedly too low
/ for Philadelphia, because the Philudel-
I phia system is worth much more per
mile
/ Assuming that the PhiladeIphlu com
. bany was worth twice rs much as the
/ Reading Company, then the Phiudel-
| phia valuation would be- only SS4 900,
! 900.
If the Reading principles are applied
to Philadelphia without reference to
mileage, the valuation here would only
4 be Sl35 600 900. which is less thun re-
quired to finance the rentals paid to the
underlying companies