The Washington herald., 1921-06-27
Western Expert Criticises
Reports Made by
Traction Co.
RIGHTS OF PUBLIC
GUARDED BY LAW
Nothing in Utilities Act
Prescribing Six Per
Cent Earnings.

The public utilities law OF inc
District of Columbia is one OF the
most grotesque multiplications OF
legal redundancy which 1 have ever
had occasion to examine"
Samuel Russell. a Western attor-
ney who is considered an authority
on public utilities made this state
ment yesterday
Having considerable time in
which to devote to a study OF the
law relating to the street car situa-
tion in Washington" Mr.. Russell
declared, II have discovered that
there are over 100 sections of in
volved, complex. discursive and re-
dundant verbiage.
Lacks Rate Making Rule.
The act does not lay down any
definite rule of rate making, ana
moreover does not seem to con-
template that the commission shall
hear complaints brought by the
company, but only that persons haV-
ing complaints against the company
may take their complaints to the
commission There is nothing IN
the public utilities law which pre-
scribes that any street car COM
pany in the District shall be en-
titled to earn per cent upon its
fair valuation" Russell insisted.
The function of the commission
is to correct unreasonable rates not
unreasonable returns Nothing Is
said about returns. Complaints are
to be by private parties The COM
pany is always referred to as the
defendant
Must Determine Valuation.
1t is true that the law requires
the Public Utilities Commission to
determine the value of the property
used by any public utility fol- the
public service, but no rule is laid
down as to how this shall be ap-
piled as a factor in the determine
lion of fares or rates. The Law
provides only that the rates viii
be such as will provide the amounts
required over and above the expense
of maintenance to keep such prop
erty in a state of efficiency corre-
spending to the progress of the in
dustry. The commission snail
provide for such depreciation IN
fixing the rates. tolls and charges
To be paid by the public.
Funds Illegally Withdrawn.
The Public Utilities Commission
il appears, has made rates to cover
depreciation, but has not seen 10
IL that the revenues derived from
these rates have been reserved by
the w. r. & Z. for this purpose. In
fact, Notwithstanding the express
proyisions of the law that adequate
depreciation accounts and funds
shall be maintained and that the
commission shall fix the amount OF
these funds, the W. r. & Z. Co. has
been permitted to Illegally with
draw and distribute to security
holders hundreds of thousands or
dollars, it seems, which legally De-
long to depreciation reserve.
THE public utilities act gives the
commission power to prescribe the
form in which the accounts of pub
lie utilities shall be kept and in
which the reports required by Con-
Cress shall be made. 1t does not
appear, however, that the commits
sion has ever required the w. r. &
E. Co. to make and file a detailed
account of it's annual expenditures
or of its annual cost of operations.
Concealed from Public.
The W. r. & E. Co. in 1920. as
in all the preceding years. has been
allowed to gloss over its expendi-
lures with a few generalities and
thus to conceal the application of
its revenues both from the public
and apparently from the commits
sion. The annual reports of the
Capital Traction Company, on the
other hand. are models of their
kind" Russell declared.
After a concise statement of the
revenues for the year there follows
a complete statement of operating
expenditures under six general and
seventy-four special headings. show
ing the utmost detail of disburse-
ments for operations and the main
tenance of the Capital Traction
Company and its equipment. These
items of expenditure alone cover a
page and a half of the printed re-
ports. The W. r. & z. report of
operations covers just six lines or
headings. as against eighty for the
Capital Traction.
The W. r. & E does not open
it's report with a statement of it's
receipts and disbursements. as does
the Capital Traction. but opens with
an extended inventory of the stocks.
bonds and securities it owns, or
rather Is encumbered with. and
takes up the front page and a third
of the second page of it's report in
annually regaling Congress with the
formidable list of securities, which
to all intents and purposes consti-
tute the stock in trade of the Wash
ington Railway and Electric Com
pany.
Told I'm Two Lines.
"As against this" Russell empha-
sized. the Capital Traction Com
pany takes but two short lines. TO
say that that it's funded debt Is
$500. 900 and it's share capital s12.-
1000. The total capitalization of
the Capital Traction Company. as
indicated above. is S17,S00. 900. The
outstanding bonds alone of the W.
r. & z. amount to about $17.47l.-
$50. although neither intrinsically
nor as an earning or operating prop
osition is the w. r. & e. worth
as much as the Capital Traction
Company.
The Capital Traction Company
is capitalized at s259.42O per mile,
CONTINUED on PAGE EIGHT.