The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1925-03-18
ESTIMATES Of
PHONE CD. HIT
Continued from Page 49,

Continued from Page 49,
company's cars are parked on the
property daily. But that's rather
an expensive rental for the public
to pay.
Regarding the estimates of build
ing values:
Company engineers, after taking
the estimates of value made by a
added:
Builders profit. 10 per cent
10 per cent.
Architects commission, per
cent-116 per cent.
General overheads, 1873 per cent
-135 per cent.
Going value, II per cent--151
per cent.
1t is my opinion no further COM
ment on building value is needed.
The facts certainly speak for them
selves
Depreciation Is an involved pr IT.
lem.
After the many items included in
valuation are added up, the com.
pany then subtracts depreciation.
II estimates the depreciation at ST.
783.243 or about eight per cent. l,
estimate the depreciation to be
$4,452, 900.
My figure is based on the actual
accumulated depreciation reserve OF
the company, about 26 per cent OF
the value Of the company.
Two Depreciation Figures.
The company, however, has two
depreciation figures. One, Of eight
per cent, Is used when depreciation
is deducted from valuation. The
other, 26 per cent, is the actual &C
cumuIated depreciation now held BY
the company.
It is easy to know why the depre-
citation figures differ. In subtrtI-t.
ing depreciation figures from valUa-
ton, naturally the corporation wants
TO take away as little as possible.
But I'm building up a depreciation
reserve, it is again natural that the
company should want much.
This eight per cent of $1,7S3,243
Is an estimate by company's en-
gineers. They arrive at this figure
BY giving the property a thorou .n
Investigation and estimating the de-
probation by determining just exact
ly how much each cable and other
piece of property is worn. It is
necessarily an arbitrary figure.
My figure. think, is more nearly
correct.
Another item is working cap
ital," which includes material and
supplies on hand. The company'S
estimate is 1892, 500. Mine is $780,
900. My figure Is taken from the
books Of the Public Utilities Com
mission. Commission experts, con-
stantIy in touch with the account
ing department Of the phone COM
pany, should know just what this
working capital amounts to.
I am willing to accept their
statement. If there are mac
curacies, of course, l am willing TO
change my figure. But l have
confidence in the work of the Com
missions employees and am sure
the public likewise will be willing to
accept the Commission figure. in
asmuch as amount for working cap
ital is an arbitrary figure.
Six Per Cent Fair.
In conclusion. want to advance
one other thought.
Although i'm Baltimore-the tele-
phone, company succeeded in get
ting an Injunction to allow higher
rates to become effective. the
Public Service Commission gained
a victory in another manner. The
court declared that a return OF D
Der cent for the phone company
was not unfair.
In Washington. the G. & p.
asks 8 per cent. contend per
cent is sufficient. For corpora
ton which is I'm its infancy ana
whose future is In doubt. an
ner cent return is not unreasonable.
But in the case Of the prosperous
Telephone company. per cent Is
more than fair.
In nv valuation l have accepted
all the figures of the company eX-
cent those Of value OF land, build
inRs, going value, working capital
and depreciation. Other estimates
I am willing to let stand without
question.
I understand that the valuation
placed by the commission on the
company for last year was ABOUT
SIS, 900 600. 1t is my opinion inns
should be reduced to $17.O00.OOO.
Entitled to Reduction.
A $17,OOO,O 900 valuation would en-
able the Public Utilities Commission
to reduce rates by IS cents per instru-
ment pcr month. The public is en-
titled to this reduction as soon as
possible. / hope the Public Utilities
Commission will not hesitate in
lowering rates.
/ am sure the commissions in
vestigation into valuation will show
the $25. 600. 900 figure is unfair ana
unjust to the public l am look
ing for the commission to cut down
the valuation promptly.
The valuation hearings will be
resumed by the commission tornor-
row. Ir several weeks we shall
know the verdict.
Will it be a $4,000, 900 valuation
with the prospect of higher rates
soon?
Or, will it be a 100000 Valua-
ton with lower rates Immediately!
used in tests at the Aberdeen
Proving Grounds.