Evening star., 1928-12-06
| damages not adjusted by the date of

damages not adjusted by the date Of
transfer.
Upon this basis the obligations actu-
ally assumed by the new company Will
be in excess of those appearing on the
balance sheet already given and
this is a fact to be reckoned with when
considering the value of the property
and of the current assets to be assigned
to the new company.
Neither the property nor the income
under the new arrangement should be
burdened with expenses or liabilities
relating to operations in a prior period.
The old companies should be required
10 settle all claims for injuries or dam
ages applicable to their operation
or an adequate fund should be created
no part Of the rate base
which would be used to settle all claims
How the figure of $50,000,000 to be
used as the initial rate base was de-
termined does not seem to be clear"
Report points out that companies
claim that under court decision IN Capi-
tai Traction Co. valuation case, their
combined valuation would be over $62.-
900 900, and that they are willing to go
into a merger on a $50,000,000 rate
base valuation instead.
Previous Figures Recalled.
Report points out that the Public
Utilities Comm sion in Its determlna-
ton on September 4, 1919. found the
historical cost of the property OF the
Capital Traction Co. within and without
the District of Columbia used and useful
for electric railway operation to be SILL
358.757. But final decision Of the courts
fixed the value as of January !. 1925,
at $25 756, $50. The former Public Util-
tiles Commission also found the his
torical cost of the other line, the Wash
ineton Railway Sc Electric Co., to be
sl2,672.64 and the total fair value"
as of June 80, 1919, to be slightly over
$16,00O,000.
Report says with reference to the
court decision as to valuation Of Capital
Traction Co. ION which $62,000,000
combined valuation and $50,000,000
merger rate base are baSedD:
"The record before the Supreme Court
end the Court of Appeals was incom-
plete. defective and otherwise unsatis-
factory. Whatever may be the reason
It seems to be admitted that the case
was not adequately prepared or pre-
sented upon behalf of the public.
Factors which the United States
Supreme Court has declared should be
considered In determining fair value
were not before the District courts. and
elements were included which the
United Supreme Court has rulsd should
be disregarded."
Many Changes Ignored.
although nearly II years had elapsed
since the inventory was made, world
war had been begun and ended, great
changes had taken place in prices, con-
struction methods and particularly
street railway operation, and no 1nvesti-
CATION had been made for at least 10
years as to the condition of the prop
ertv. the amount Of accrued deprecia-
ton actually existing or its utility for
street railway operation, the case was
submitted as it stood when the commits
sion made Its finding"
Report quotes from Court OF Appeals
decision, in which 1t was admitted that
there Is no testimony in the present
record as to actual depreciation Of the
property"
Report continues: ut is clear, both
from the record of the case and the
opinion itself, that there was no tes-
timony before the court as to the
amount of depreciation actually existing
In the property as of any date later
than July !, 1914. How could any court
make a finding or TACT as TO deprecla-
tion in 1927 upon any such record?
The record Is deficient in many other
respects"
Last Basic Study in 1924.
Report points out that no complete,
thoroughgoing inventory and valua-
ton has been made, in basic way,
since 1914.
Report calls attention to +act that
DIT Ice pffNNH
valuation of Washington Railway &
Electric Co. was appealed by railway
to courts in December, :9l9, but leases
were never pressed, and no decision las
been rendered by the Supreme Court or
the Court of Appeals. But an attempt
has been made to forecast the decis-
ions. 1t has been assumed. for example,
that no depreciation whatever would
be deducted, notwithstanding that the
accrued depreciation as of July /, 1914,
found by the commissions engineers