Evening star., 1928-02-29

sion"
Valuation: 1T may be desirable TO
digress a moment to review very briefly
the history of the valuation Of certain
of the public utilities since the passage
of the public utilities act in 1913. About
year after the passage OF this act. the
Public Utilities Commission proceeded
o value the property Of all the public util-
ties subject to their jurisdictions. These
valuations we're conducted with unusual
thoroughness. One of the first valuations
completed was that Of the Potomac Elec-
| trio Power Co. In 1917 The Potomac Elec-
| trio Power Co as we'll as the Capital Trac-
| & Electric Co. felt that the commls-
| sion had erred in certain Fundamental!
principles in these valuations
Won Appeal of Test.
THE valuation of the Potomac E!ec-
/ tric Power Co having been determined
by the commission in 1917. two years
| in advance of the valuations OF the
Capital Traction Co. and the Washing
| ton Railway g. Electric Co, 1t was un-
! derstood by all parties concerned that
| the Potomac case should be considered
| the key case. It was taken first to the
| Supreme Court of the District OF Co
| lumbia. with decision favorable 10
| the commission: IL was then taken 20
| the Court of Appeals Of the District
| of Columbia with a decision fayoraoie
| TO the company: IL was then taken 70
the Supreme Court Of the United states.
| which refused TO take JurisolcIion
| thereby leaving the decision OF the
| Court Of Appeals Of the District Of
| Columbia final. and the principles
therein outlined binding in other cases
| pending before our courts. Final set
| tlement OF this case was reached by
| agreement between the commission and
| the company December 81. 1924. ana
I confirmed by the Supreme Court OF the
| District OF Columbia.
with the Potomac case out OF the
| way the Capital Traction Co. carried
on its appeal, finally reaching a con-
| clusion by decree OF the Court OF Ap-
] peals OF the District Of Columbia def
| nitely fixing the value OF its property.
| January l. 1925, as SIS. .T56,8So.
| The Washington Railway & Electric
| Co. had not proceeded with its case
awaiting determination Of the Capita!
| Traction case.
| Estimates Submitted.
| Some time after the determination
| of the Capital Traction case our repre-
| sentatives had conferences with the
| Public Utilities Commission, In which
| 1t was suggested that We figure our
value according 10 the principles laid
| down in the Capital Traction case ano
| submit these figures TO the commission
| for their accountants to re-check. which
| has been done
The value OF the Capital Traction
Co. as have stated. on January =:
| 1925, was s25, ,756 $50. with additions Of
/ S26T. 169 since that date 10 make total
! value within the District OF Columbia
| of s26,o24,559 and adding the value or
their properties IN Maryland. Sio2.'3l
| makes total of $26.427,290.
| Applying the principles Of the Capital
| Traction case In the valuation OF the
| Washington Railway & Electric Co we
/ had n value within the District OF
| Columbia on January l. 1928, OF
| $40, ,sS5, ,263. adding 10 this additions
| since that date Of $955.l0l makes
| total value OF the Washington Railway
| & Electric property within the District
| Of Columbia as Of December 81. 1877,
OF S3i. sac. .664. and adding the value az
| its propcrtv in MARYLAND. 81 Soc. .iSS,
| makes a total value " $35. Iollo'.
The two railroad companies there
| fore have total valuation oi
! So. .l2s4&T.
Bus Valuation Omitted.
"But the question before this coW-
mission Is not whether these figures
are exact in every detail out are Such
| as to enable them 10 satisfy their rallt0S
| that the value ot this new transit prop
ertv is At least $50 900 900, cannot
| see how II Is possible for any one
| properly informed ~ have any ceuht
upon this matter. You Will have noticed
| that in this computation no allowance
| Is made for the value ~ property ~
the Washington Rapid Transit Co. M
| cn,dcd III the merger.
| 1t would further appear that no one
| can question the reaScnahleneSS ~
| : per cent return. The customary tal'
| Is per cent There are NerS Few III
| stances where courts or COMMISSIONS
| have fixed rate of return as low rs
| per cent. Iii Il list " recent court
| decisions covering ~ eases, many W
| them United States supreme CoN'I
| cases there is one instance OF pcE
| cent return three ot II. per cent
| return. and t9 of All per ceot.
| We have accepted the $Sooeo.ooo
| not because VIZ are not, III our 1acS~
| ment, cutitlcd ~ larger valuation, nHt
| upon the rather nnStStent demands W
| Mir Wilson for merger even II accom-
/ nitSIltN Nt SNIitc sNt iitNV ~ RAAN NNNHN
! panicS and In the belief that the cnln~
| mission could easily satisfy Itself that
| the property MAS worth III excess vi
. Sso. .nOu. 900 We have In the past been
of the opinion that the value should
| be determined under the pre\ iSsenS ~
, the public utility act
| The pnrlN,Se ~ economical power
| supply proyiSion Mir. tlam said. Is that
/ the new company viii tc able ~ secure
! It's power AZ 4 etsSt not III excess NJ the
| present aggregate rV,St cf power to the
| separate railway companies
! The public is dtCrctly benefited ev
! the provision ot The aetcemeut that
! the new company shall stant ttre
/ transfers tn any etInstt!ng portion rt
It's street railway tines Within the MS
! trlc, Mr, Nam said
| With respect to vellet t,>,m the
! hnrdrns NJ special poliTeWen aud pay
| lns Mr tlam said. The ctanunisNtt,n has
! previously recommended a. lS,nsESNAS
| that the companies he relteved tvpun
| these burdens. "tor which there h
under present conditions nc iustigtea~
| ton
We should think the puniic would
he thoroughly III Accord With the pso-
vlAlans Designed 10 pranate the ettt~
| crnvV NJ the service aud tiVtcase the
| ability " the new COMPANY ~ supply
| the Transportation which Is needed ey
| the ruhlic and that the legislation ea,
| ta,ned ta ettecluate this agreement
| should include pvoVS,tn fer the
| reasonable pectettlnn ct the new CONT
/ many asAVnSf SatA Air