Evening star., 1924-04-24
Scent FARE BILL
/ DECLARED "UNJUST"
Capital Traction Head Says Return
to Original Charge Would
Cut Service.
MCCLELLAN HITS PROFITS
Insists Company's Income Too
Great on Valuation.

The McKellar five-cent street car fare
hill was attacked by President George
L. Hamilton of the Capital Traction
Company at a hearing today before
the Senate subcommittee on the
ground that it was unfair to the
street railway companies of the Dis
trict and would result in depriving
the public of proper service if enacted
into law.
"A return to the rate of fare called
for in the bill under consideration"
said Mr.. Hamilton, would deprive the
owners of a fair return: would de-
prlIe the public of good and efficient
service and would seriously retard
the growth and prosperity of the city
of Washington"
Mr.. Hamilton discussed in detail
the legal aspects of the street rail-
way situation in the District. con-
lending that the charters granted the
street car companies by Congress.
under which they were to charge a
3-cent fare. with six tickets for a
quarter, were not irrevocable con-
Commission, established by Congress
in 1918. clearly had the power and
authority to change fares, including
the power to raise or lower them.
MckelIar Dissents.
Senator McKellar took issue with
Mr.. Hamilton on this point, pointing
out that the language of the law
stated that fares should not be in
creased over the then scent rate.
Mr.. Hamilton Immediately read the
text OF the law which showed that no
increases were to be made unless
ordered by the Public Utilities Com
mission. Mr.. Hamilton contended that
there was every intention on the part
OF Congress to leave this rate fixing
10 the Public Utilities Commission, and
that to hold it was the purpose of
Congress to bind the street car CON-
panies to the rate of fare then estab-
liShed was "unthinkable."
1T was to give to Congress the right
of control and regulation that the
reservation of power to alter, amend
and repeal was inserted in the char
terS, said Mr.. Hamilton
The rate of fare fixed by the char
Ter might have--in fact, if il had not
been changed, would have been-con-
nscatory, and this because of natural
and inevitable changes III conditions
and increased cost of operation.
Can it be conceived that Congress
would commit itself to a condition
that would be clearly illegal and un-
constitutiOnal?"
Says Profits Too Big.
Senator Mcclellan, in reply to the
legal argument of Mr. Hamilton, de-
clared that he believed the Capital
Traction Company was making too
much money on the fair valuation OF
the property. and that he could dis.
regard the legal aspects of the case
To this Mr.. Hamilton replied that
he thought the attitude of Senator
Mckellar, as shown in his statement,
10 70
panies. to the interests of the people
Of the District, and those of the pec,-
pie of the country.
Mr.. Hamilton went into the history
of the organization of the Capital
Traction Company, which was created
after the purchase of the old Wash
tngton and Georgetown Company by
the Rock Creek Railway Company in
1885. Senator Mckellar early in the
hearings on his bill declared that the
bonds of the Washington and George
town Company had been "watered" in
the deal which brought forth the
Capital Traction Company to the ex-
tent of some $4,000,000. Mr.. Hamilton
denied this, insisted that fair price
was paid for the Washington and
Georgetown Company, and that, in
any event in arriving at the fair
valuation of the Capital Traction
Company, upon which fares are based,
the Public Utilities Commission had
not considered this transaction.
Referring to the purchase of the
Washington and Georgetown Com
pany, he said:
1T was a contract not for the pur-
chase of stocks and bonds, but for
the purchase of all the property, phys
ical and otherwise, of the Washing
ton and Georgetown Railway Com
pany."
Hits Mckellar Bill Aims.
Mr.. Hamilton declared that the pur-
poses of the Mckellar bill, on the
theory of an irrevocable charter
contract between Congress and the
railway companies, were to compel
the companies hereafter to receive
a five-cent cash fare and to issue six
tickets for a quarter. and to prohibit
the Public Utilities Commission from
hereafter exercising the power of
fixing rates in excess of 5 cents and
six tickets for quarter thereby de-
priVing the commission of the power
to fix rates, which would give a rea-
sonable return on the fair value of
the property.
I"It would thereby destroy the abil-
1ty in the Public Utilities Commits
sion to function as an Intelligent or
efficient regulatory body" he said.
Quotes Syme's Opinion.
.''The only witness produced by Sena-
tor Mcclellan" said Mr.. Hamilton
+rMr. Conrad Syme, who was counsel
for the Public Utilities Commission
during the valuation proceedings and
who is entirely familiar with the con-
ditions and operation of street rail-
ways in the District. gave it as his
opinion that it would be impossible
TOR the companies to live on the fare
contemplated in the McKel,a- bill
F'If the valuation made by the Utili-
ties Commission is improper, illegal
or unfair. either to the public or to
the companies, Congress has decreed
that such evils or irregularities S
by the courts.
1.-THE valuation, as made by the COM
mission, under law stands until modi-
fled by court decree. 1t is the yalua-
tion practically of Congress, because
the commission is the agency of Con-
gress, and whether right or wrong,
whether too high or too low, the COM
panies are entitled TO q fair return
Upon that valuation.
II Congress may repeal or amend the
utilities act, but as long as it re-
manned unrepealed it's orders, unless
modified by court decision, remain as
the orders of Congress, and incon-
sistent, direct enactment would be
unjust"
The hearing was continued until Tues
day, when Mr.. Hamilton will again tes-
tify.
CANCEL GEM INSURANCE.
r1e-l,e Eo1Iorc