Evening star., 1927-12-01

turn, then the company would call
on the Public Utilities Commission to
supply the deficit from the surplus re-
serve fund. When and If The surplus
reserve fund became diminished to
$500,000 the fare would lhen be in
creased, following the same procedure
as proposed for the decrease.
THE outstanding objection to most
contracts such as this we are discuss
ing and to the theory of regulation in
itself based upon determined value"
continued the report. ''is that the
company having its value determined
and it's rate of fare limited is without
incentive to establish economical
methods of operation or to employ the
greatest ingenuity of the management
toward a successful, economical and
efficient operation of the company. 1t
is therefore proposed that a base re-
turn be allowed upon the rate base
and that the surplus reserve fund
shall be called upon to supply funds
only as it may be necessary to bring
the net income up to this figure. Like
wise, there shall be no additions to the
surplus reserve fund from the net in
come Of the property unless and eX'
cept rs it shall exceed 2 per cent in
addition to the base return.
Would Divide Return.
"It is recommended that as the net
income may exceed the base return
and up to the total of per cent this
surplus shall be divided equally be-
tween the company and the District
of Columbia, the division to be as fol-
lows: District of Columbia, per cent;
mana cement of the company, one-half
of / per cent, and employees of the
company, one-half of l per cent.
1.-The share of the District of Co
lumbia, or the public. shall be de-
posted annually to the credit of three
public trust fund commissioners. COM
posed of the president of the company,
the chairman Of the board of Commits
sioners of the District of Columbia.
and the chairman Of the Public Utili-
ties Commission of the District of Co
lumbia These trustees of the public
shall establish a trust fund and use
all cash and accruals, (D in the pur-
chase of common stock of the com.
pany to the amount of 1913 per cent
of the par value of the total amount
outstanding; and (2) in the purchase of
the preferred stock and mortgaged in
debtedness of the company.
THE company to execute an option
to the District of Columbia giving the
right to purchase after due notice not
exceed 33b per cent of the common
and any part of the preferred stock of
the company at any dividend period at
price for either, of $110 per share.
"a company to issue its common
and preferred stock under the condi-
tion that any part of it, may be
called after due notice at any dividend
period at price of $110 per share"
Would Take Over Taxis.
The report recommends that the
consolidated company after unification
is complete and operation has started
under this contract take steps i'm
mediately to acquire all other trans
portation agencies in the District. in
cluding taxicabs. sightseeing busses,
suburban and interurban bus lines and
interurban railway companies. These
companies. the report said, should be
acquired at a fair price. which would
be approved by the Public Utilities
Commission.
In the case of the suburban lines,
which are operating interstate, and
without authority and under the jul