Evening star., 1928-12-06
DRASTIC CHANGES
URGED BY EXPERT
S6nate'S Utilities Prober
FIatIy Rejects Proposed
$50,OOO,OO0 Valuation.
CONTINUED from First Page. J

tContnued from FIRST Page.)
n1ents to include provisions specifying
the value of property or the method oi
adjusting such value from time to time
In my opinion the entire section re-
lating to values and the determination
nf fares in accordance Herewith coulC
wisely be omitted and these subjects
left for determination by the properly
constituted authorities when the queS-
tionS arise.
Sees No Need for Change.
Unif1cation may be brought about
without changing the status OF any OF
the parties to the agreement, and II
would seem that this Is the natural
course to follow so far as valua ion
and rate-maIing are concerned.
The proposed agreement creates a
situation which cannot be altered for
10 years. This is unnecessary and OBJ
iectionable. and it is recommended
that there be omitted from any unlf1ca-
tion agreement any attempt to change
the status of the property or the pow
FRS of Congress and the Public Utilities
Commission as to valuation and rate
making.
(b) The section of the proposed
agreement relating to the supply OF
noVer to the new company is complex
snG difficult of Interpretation. The
subject of future power rates to the
new company might we'll be left under
The general authority granted to the
Public Utilities Commission to prescribe
rates
A recommendation that several
rhanges in contract provisions with re-
spect to purchase of power by new
.ransit company from Potomac Electric
Power Co. Also the sale of power
facilities Of the new company to the
Potomac Electric Power Co., instead of
lease as now provided. (ThiS applies to
present power properties OF Capital
Traction co..
Would Not Ban Rivalry.
(c) Advises against contractual pro-
fision Of unification agreement protect
hR new company against competition.
Recommends instead provision that
competing transportation lines may not
be established without the issuance OF
b certificate that new line is necessary
Tor convenience Of public.
Id The unif1cation agreement pro-
rides that the new company shall
assume the liability Of the old COM
panies for injuries and damages. but
makes no provision for any transfer TO
the new company Of any funds for the
payment of claims. The old companies
should be required to settle all claims
for injuries and damages up to the time
bf the transfer of the property to the
new company, or the liability which the
new company assumes should be pro-
viced for either by insurance
DR. establishment of an adequate fund
represented by cash or securities.
(e) The uniflcation agreement places
upon the Public Utilities Commission
The power and duty OF passing upon
practically every act which the new
company will perform. Such q
provision is likely to be ignored in prac-
bice or to be productive of delay and
rresponsibility. If there Is necessity
for approval by the commission Of i'm
bortant matters, such approval should
Be provided for either by general act
Of Congress or specifically in the con-
tract.
Would Clarity Power.
DR.. Maltbie and the Bureau OF En-
eiency are in accord in recommending
that the arrangement under which the
merged railway company would OBJ
tain electric current from the power
company be clarified.
The two reports differ on the ques-
tion of giving the merged company
reasonable protection against competl-
hon. DR.. Maltbie would permit the
commission to authorize new transpor-
tation upon issuing certificate OF
convenience and necessity. The ell
tiency report took the view that there Is
no merit in objections to this clause In
the agreement as long as the company
Is properly regulated.
Pointing out that the agreement does
not specify the percentage Of return tc
be earned by the new company, but
leaves that to be determined by the
commission. DR.. Maltbie gives estimates