Evening star., 1927-10-31

| more than made up by the adjustment
| of maintenance items mentioned be-
low. 1t will be noted that the said
rate base of $52 900 is less by $i2..
| 100000 to $l5,000.000 than the rate
base already established by the Dis
trict Court of Appeals in the Capital
fraction case and the probable results
| IN the Washington Railway & Electric
case.
II am COW n"ad from my careful
studies of tAe ..".blem, and from the
reports of emil eat engineers who have
made thorough inveStigat ton of It
that this amount can he earned an
nua;ly by the unified company under
the plan proposed, without increase
In present rates of fare. My plan pro
vldes that there shall be no change
in said rates for period of 12 months
after the date of the conSolida ton. in
order that the physical and other
changes necessary to realize benefits
can be effected.
1T is proposed that the Washington
Railway and Electric Co. shall cause
the Potomac Electric Power Co to
enter into long-term power contract
with the consolidated company (Which
may include lease by the Potomac
company of the power properties. ap.
acquired by the consolidated com.
pany), on such terms that the net
ccst of power to the consolidated com. !
pany (after crediting any rental pay !
able to the consolidated company for |
its power properties) shall not exceed |
but be substantially less than, the |
present aggregate cost of power to |
the Capital Traction Co and the |
transit operations of the Washington |
Railway & Electric Co
Maintenance and Depreciation.
THE cost of maintenance and of |
depreciation retirement reserve} ate
definitely related. The operating com.
panies have in the past proceeded on
somewhat different theories with re-
spect to accounting for maintenance
and depreciation. With the definite
fixing of rate base at $52.100 0G0
and the adoption of uniform sink
ing fund method for accruing retire.
ment reserve. it is obvious that the
combined maintenance expense of the
companies. heretofore necessarily in. !
ciudlng some retirement costs. will be
decreased ana that the operat ting m
come of the new company as com.
pared with the joint operating income
Of the present companies will be ma
terially increased.
AT this point it is important to
emphasize that one of the principal
features of an effective unification
plan should be to grant to an appro-
pirate public authority. with the as.
sent of the owner of the properties,
power to rearrange the tracks and
transit facilities in the public interest.
Your commission is, of course, aware
II the litiga ton that will inevitably
ollnW any attempt to force changes
n the tracks and routes of the street |
railway systems which the owners
of the properties may regard as in
furious to their rights.
In order to accomplish this and
he other objects Indicated my plan
provides for the appointment by the
commissioners of the District of Co
umbia of three trustees, whose sala-
les and expenses shall be a charge
against operating expenses of the con-
company. and who shall be |
invested with power:
Il. To determine the character. ex.
ent and cost of the service and facil-
ties tc be furnished to the public.
-. To regulate and fix, from time to
ime. rates of fare.
Rearrangement of Tracks. :
SO. To direct the removal or re-
arrangement of tracks. construction
IF extensions. betterments and I'M
development of the facil-
ties and service of the company in
such manner as will adequately NEE:
he ira nsportation needs Of the Dis
rict of Columbia and harmoniZe
With the plans which may be adopt |
ID from time to time under public
authority. for new streets and ar
critics and for the economic and es
-hetic development of the city OF
'The intention is to confer upon
said trustees such ample powers OF
regulation and direction
If the consolidated corporation as
will assure a service and provide
;uch extensions, betterme nts and i'm |
,rovements as in the judgement of
he said trustees may be required
n the public interest.
THE trustees acting for the District.
having, as indicated, supervision over
,osts of operation. although leaving
The actual operation in the hands Of
he corporation, would be empowered
10 periodically rdjust fares so as to
pay actual operating costs plus the
'eturp TO the owners of the properties,
rs Indicated, the return to the owners
20 be utilized by them in paying inter.
est on funded debt, and dividends. For
use in such necessary periodical ad-