Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-12-23
COST Of UTILITIES
SET AT $65,432,4l5
Outlay if D. C. Were to Buy
Power and Traction Com
panies Estimated.

The District government would
have to pay at least ,$65 ,432,415 for
all the securities of the Washington
Railway and Electric Co., the Capital
Traction Co. and the Potomac Electric
Power Co. If municipal ownership
should be sought, according to figures
transmitted to Chairman Capper OF
the Senate District committee by the
Public Utilities Commission today.
The report was in further reply tc
a query of Senator Capper last week
for figures as to the possible financia
arrangement that would be necessary
under Government operation.
The statement gives $65,432,415 as
the market value of the securities OF
the companies and shows that the
earnings are $5,187 1923 for a year. The
commission then assumes that the
city could get the purchase price at
an interest rate of A per cent, which
would make the annual interest
charge $2,6l7,296. This would leave a
balance available for retirement OF
capital, reduction in rates or expan
sion of property of $2,569,833
The statement next shows that II
all of this balance was applied to a
sinking fund at per cent compound
interest the entire purchase price
could be retired in 18 years. A table
is included showing that the retire
ment of the purchase price could be
spread over period of anywhere
from 25 to so years, with smaller an
nual allotment to the sinking fund.
Savings Seen i'm Merger.
The report then deals with a hypo.
nf
done in the way Of rate reduction IT
the difference of $2,569, 1893, plus esti'
mated savings resulting from consoi'
idation, were applied to rate revision.
This table shows that the savings re-
sulting from merger have been Varl'
ously estimated at from 100000 to
81 500 900 q year.
On the basis of the minimum estl'
mate of 100000 saving added to the
balance Of $2,569, 1888, the commission
calculates that the street car fare
could be reduced to 5 cents, but would
necessitate some increase ir the elec,
trio light rate.
Estimating the saving from merger
at 5000 900, the commission states that
q. scent car fare would leave deficit
of s42841 to be made up on the cleo
trio light rate.
IF as much as 100000 could be
saved through a merger, the commls
sion estimates, car fare could be maze
s. cents, with a. balance of 1857 ,l79 To
he applied toward reduction in electric
rate.
Against Public Ownership.
The report also includes other tables
showing what would result from
merger with a 10 cent cash fare and
tokens at 5 cents, or with an o-cen'
cash fare and tokens at cents.
In previous letter to senator
Capper, the commission made 1t clear
that it was in no sense favoraoie 70
Government ownership, and Senator
CAMPER also stated in his first letter
to the commission that he was not
committed to such proposal put
wanted to study any fgures that
might be available on the subject. IL
IS understood that the accountants of
the commission prepared mucn or
this information sometime ago IN
connection with suggestion that the
city. without going into municipal
ownership, might be able to extend
cheaper credit to the public utilities
The reductions discussed in the hypo-
thetical table are based largely on
the assumption that the city could
borrow new capital at a much lower
rate of interest than the utilities have
to pay.
the commission that the figure of $685.
432.415 as the probable purchase price
was based on the present market
value of the stocks and bonds of the
company and that it did not necessari-
| ly follow that they could actually be
bought at that figure.