Evening star., 1925-04-10
S6,0DQ,0]O SLASHED
/ FROM VALUATION
/. CLAIMED BY c. & P.
Utilities Commission Adopts
S18,576,956 as Figure for
Phone Company.
HEARINGS ON CHARGES
TO BE RESUMED SOON
Credit for $125, 900 Spent on Radio
Station Is Disallowed
by Officials.

The new valuation OF the property
of the Chesa peake and Potomac Tele-
phone Co. was announced by the
Public Utilities Commission today as
s18.576,956
This figure is approximately $4,000,
600 less than the valuation of S25, 5,0o0,-
900 asked for by the company when
the proceedings began several months
ago. 1t is approximately 100000
less than what the value of the com
pany would have been if the present
proceedings had not been held.
The commission announced at the
same time that hearings TO reconsider
the reasonableness of existing tele-
phone rates, which were interrupted
several months ago by the company
request for a revaluation, viii be re
sumed in the near future.
Although the commission has in
effect slightly reduced the valuation.
1t was unofficially stated at the Dis
trict Building today that this does
not necessarily mean that cut in
telephone rates will follow. The ques-
tion of whether rates are to be re
duced will be carefully gone into At
a hearing within the next few weeks.
Division of Valuation.
Briefly summed up, the new valua
| tion is as follows:
For rights of way the commissio:.
allowed 1888
For the land owned by the Cou
pany, $4,000, which is so per cen
more than the assessed value foun'
! by the District assessor.
! The building used by the compan,
| 81, ,600.5 .534. which is book cost. Ia l
! case of both land and building III
estimates of the company differ
| from the assessed value in the ~
/ trict tax office.
| All other physical property. VIII
| includes mechanical telephone II
! paratus, SIS, 5,7034yO.
| For overhead and intangible.
cluding an unstated amount for
ling concern value, S2,SlO.00e.
S4,OOO,O00 Is Cut on.
| The foregoing items give a tot
value Of S21.SS2.354. From that tot
however. the commission subtract,
/ S4.000.000 for depreciation. Til
| brought the value down to l1,SS2.3o
! 1t was still necessary. however, {.
make allowance for materials an,
! supplies and working cash as follow
/ For materials and supplies, $231,J3=
| and for working cash, S463,06S. Aftef
making these two allowances, 1he
! dnal value was found TO be 1856. 95t.
| 1t was learned that the commission
| in revaluing the telephone property
| disallowed $4,000 spent by the com
pany in equipping its radio broad
casting station. II is understood tna.
! while the commission was appreC-t-
| tive OF the service rendered in radio
| broadcasting. it did not feel that the
cost of the station could be made a
proper allowance in valuation
| which is TO be the basis of fixing tel,-
phone rates.
Depreciation Debated.
Two of the most important points
| of contention in the valuation pro-
| ceeding were the question of depre-
! citation and going concern value. The
! company argued that while it had an
accrued depreciation reserve of ap-
| proximately S4,500,000, the actual
! physical depreciation existing in the
/ property was only S1,800,000. On this
point the decision shows deduction OF
| $4,000, 900 for depreciation.
The company's claim for going con-
Germ value was s2,S00,000. In the com
missions decision there is an item of
/ S2.Sl0 900, but this includes overhead
and intangibles as we'll as going concern
The commission has given no indication
/ of just how much of that figure in their
decision represents going concern value.
!
sented the Federation of Citizens Asso-
Citations throughout the proceedings, ex-
| pressed qualification over that part of
! the decision dealing with depreciation,
since the commission Subtracted almost
as much as he argued for AS to the
total valuation, Mr.. Clayton advocated
! that the commission follow the invest
ment theory instead of reproduction
costs, which he estimated would have
/ produced fair value of only S155OO. 600
! 1t was understood today that the
| question of whether there is to be a
| rate reduction as the result of this
revised valuation will depend very
largely on how the commission treats
the allowance for depreciation in an
nual operating expenses when the
| rate hearing comes up.
! The valuation arrived a today rep
resents several days of tedious figur-
ing by Mai w. E. r. Coyell Z. V
! Fisher and Byers Nick. Bachman, in
! conference with the Commissioners
The final announcement was made
after Commissioners Rudolph and
Bell had consulted with Commissioner
Oyster. who has been at home because
of illness recently.