Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-02-20
1-CENT FARE RAISE
WOULD YIELD CAR
MERGER RIPPER CENT
Utility Experts Say Increased
Revenue Would Provide
Rate Return.
NEEDED INCOME SET
AT $500, 900 PER YEAR
Balance of $1,625, 900 Would Have
to Be Raised Through
New Earnings.

n OHe-CenC increase over the present
rate OF street car fares would enable
the proposed Capital Transit Co. 10
earn per cent return on the $50.
100000 valuation provided In the merger
agreement, according to calculations
made today by public utility experts at
the District Building. Their findings
were based on study Of the net earn
ings OF the three transit companies
last year on the assumption, of course,
that conditions which obtained during
that 12-n1onth period will continue
during the first year Of a unified oper-
alton.
The combined earnings Of the Wash
lngton Railway and Electric and the
Capital Traction Cos. in 1927 totsIed
sl.8O0.000. The utility experts added
TO this 5000 900 which the consolidated
company would save in the salaries Of
crossing policemen and paving assess
ments. making a total OF $4,000. coo.
FROM this they deducted sl25.ooo as
the revenues from pay transfers be-
cause the merger plan provides for free
transfers from one car line 70 another
This would make the net earnings Of
the consolidated company sl,875.0o0
SI.625.oO0 Needed.
A return Of per cent on the pro-
posed $4,000. 900 rate base would
amount to $500 000 Sub.ractirg the
theoretical net earnings Of sl,S75 900.
which the present rate Of fare would
Weld the experts showed that this
would leave balance Of 81 625 900 to
be made UP TO produce s3.5o0 600.
AS the two car companies carried
l35, 5,0o0 900 pay passengers last year
l-cent fare raise would add 81 $50
600 to the income. making a total IN
come Of s3.225 900. o. S215.oc0 s,or-
Of the amount needed to produce the
desired return of $500 900. To this
$275oC0 the experts added q loss o.
$50 900 which the Washington Rapid
Transit Co suffered last year. thereby
making the net income fan short by
s337 600 Of the $500. 600 return. How
ever these experts pointed out. the econ-
omies that would be effected through
unified operation would more than
oget the ss37 GOO shortage.
Irrespective Of whether the merger
Is corsumrnated. the utility experts be-
heve that a fare increase Is inevitable.
It was pointed out tha: the Capital
Traction Co has been drawing On its
surplus for the last two years 20 pay
dividends and that Il threatened some
time ago to petition the Public Utilities
Commission for authority 20 increase
fares Should the merger negotiations
fail this company. the experts predicted.
probably would immediately Apply for
higher fare and that the commission
would be forced 20 grant Il. and apply
il also 20 the Washington Railway and
Electric Co. although the ot5ctals ct
this company have repeatedly declared
ktchaF
rleharty Studies Agreement.
The utility experts view the increased
fare propaganda as mere merger oQya-
boo Regardless of whether there IS a
merger or not. thay declared street car
fares are going higher. and IL Is likely
tha. the fare Under merged operation
would be lower than II the cor;-
pan.eS continued 20 operate trGs-
psnSeCrly
Ralph 3. Flshsrty, peoples counsel
before the Ctiiities CoTIiSSscr. CON-
ti2ued his study Of the merger agree
risnt today preparing - 9csr the Pubic
Utilities committee c: the Federation
~ Citizens Associations IN crgNoS,cg
certain Q. It's features when the co.gs-
r.iSicn begins hearings February -.
William A Roberts vice cAssgniar o.
the committee, invited Nc. Fasha-,y 20
attend = meeting os the corar,I:sse
Thursday night SO which Harley =.
Wilson. principal owner q the Wash
il,s,cn Rapid Transit Co, and author
II thc merger plan. proposes - answer
questions regarding the agreement
which the members may rrcpoGnd.
Committee Prepares Report.
The committee. Mr., Roberts ar
noUncsIi viii definitely map cut is
plan cf attack ou the agreement when
the federation meets IN special $SSSsca
Saturday night ~ consider tire merger,
The tenor Of the discussions as the
federation; meeting las, Saturday nlSAs
indicated that tse Committee GSsN VIII
rtert wi1h stubborn cyyANis>ssa when u
attempts ~ egNsica,: the cgSs0lsatteG -
the ten ce'eesscnS Il has scl;>5 - tire
r,eYgsr aSssS,sitt II lis nsSSSas sNrsn.