The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-12-18
The Going Value Of Public
Utilities Corporations
By BILL PRICE.

BY BILL EKlCE.
The Chesapeake Potomac Telephone Company is having
reapprasal Of its District properties made by engineers for
the purpose Of setting up increased valuations against
reducing telephone here returns Of that com
pany, present valuations, entirely too large.
Included in this company appraisal Of its property
values there will be set up before the Utilities Commission ar
extensive claim Of going values that Isl big allowance
as it get for being successful enterprise In successful
commercial establishment which built itself up through homes
methods and courteous of its customers the claim
would be for good WILL = often Of much value.
In many parts Of the United States public service commits
sons have occasionally recognized going values as part 81
real property values Of public utilities and have also
made as are all other fsy claims to obtain from the public
the largest possible rates charges and Conseoueny tho
largest possible return to the corporation
The local Public Utilities Commission has DELAYED action
on the pending hearings for lower telephone in the
District until the decision of Justice STAFFORD Of the
District Supreme Court is made in the longpending appeal
Of the Potomac Electric Power Company against the valuation
Of its properties by the District p u c. the valuation ques
ton also embracing that of what rates shall be charged
electric light users lin the District.
We have not kept abreast Of court decisions elsewhere as
to goinp values because we feel confident that pubIic
service commissions and courts will invariably give false
values to public utilities corporations upon which the public
must pay returns Everything should depend upon the facts
We do know though that District public utilities are pre-
pairing to make every effort within their power to
HIGH COSTS They want the public to pay upon
what It would NOW reproduce their properties In
cudec with these high valuations will be the mythical in
tangible thing they will call going values We trust that
the Public Utilities Commission will never allow "the wool
10 De pulled Its eyes these claims
There vast difference between the good will value of
commercial enterprise built up in COMPETITION with
pn G uv at nm bsd and the g value Of
from which the public could way escape The business
man who has batted through fierce competition dealt with in
competent help at loss to himself the public GOOD
will end conquered entitled considerable good will value
On the other hand the average public utilities corporation
until put under public CONTROL did it pleased obvous to
public demands interests paid attention to good viii
spent avhy in big salaries and other overhead AZ
well dividends watere stocks and then feels that Il
hQ nxodf
THE PUBLIC PAID THE MONEY that built up these ii.
situations paid it because could not do otherwise having
curious theory public service commissions or courts
that going value should be added to the reproduction cost
OF public utility corporation the public as the case
In nearly every instance furnished the money that built up
these concerns.
There are doubtless instances where investors in pnbic
utilities companies furnished ALL THE MONEY that
their enterprises profitable In cases private enterprise
private money supplied the motive power back Of success
This doubtless true in communities where public control
gave the public the best of matters rates. charges etc. and
threw upon private the load Of making good
instances going value should be allowed During
period many public utilities the wall because they
were not given just treatment by public utilities commissions
Not for minute this apply in the District Of Column
ba The people Of Washington were and are compelled to
pay street fares telephone electric light and gas rates
high enough to maintain utilities in fscass financial
condition.
There are still hundreds of public utilities companies in
the United States that ARE not their feet financially
They should be accorded fair treatment the money in
vested in them honestly spent in behalf Of the public
service
reproduction COSTS the United States Supreme Court itself
badly divided in two decisions Justices BRANDIES
and HOLMES have held to the view that is prudent in
vestrent Of money in public utilities which should allowed
reasonable returns claims based upon abnormal prices
in abnormal times
District public utilities corporations which seek to have the
public pay returns abnormal reproduction will
in few years from costs decrease be bowling to
have their properties protected against recedng values They
will change their tactics completely and Bonded knees
ask the courts to them.
In fixing the valuations of Washington utilities years
ago the theory of the Public Utilities Commission was to put
valuations the basis of AS NEAR NORMAL COSTS Of
production as possible Today prices not normal and
every in the business world knows it.
When Going Value like old Santa Claus sticks his dis
gused figure into utilities matters in the future we hope to
the Public Utilities Commission strip him investigate
him thoroughly. The Commission will find him not what
he says he is