Evening star., 1928-12-06
Senate's Expert FIatIy Re-
jects $4,000, 900 Valuation,
0. KID by Efficiency Bureau.
CRITICIZES PROPOSED
RATE BASE ADJUSTMENT
Advises Against Provision Protect
ing New Company From Com
petition-Would Leave Fare.

The $50 .000,0 valuation proposed as
the basis for street railway merger in
Washington is fatty rejected and other
drastic changes in the unification agree
ment are recommended by DR.. Milo r.
Maltbie, utilities expert, whose findings
were made public today by the Senate
District subcommittee, when it met to
begin consideration of the problem.
DR.. Maltbie's recommendations are at
variance with those of the Bureau of
Efficiency on a number of points, par
ticularly the valuation, which the ef-
ficiency experts suggested be accepted
tentatively to hasten the benefits of
marger, with revaluation at the end
of 10 years or sooner.
Would Omit Subjects.
Declaring that companies are seldom
merged with valuations approved by
legislatures or Congress, DR.. .Maltbie
tells the committee the entire section
relating to values and the determina-
ton of fares could wisely be omitted
and these subjects left for determina-
ton by the properly constituted au-
thoritles when the questions arise
The report also declares that ulti-
mate control of the merged lines prob
ably would be In the North American
Co., through its control of the Wash
ington Railway & Electric Co.
The subcommittee adjourned shortly
after receiving and making public the
Maitbie report, and probably will not
have another meeting until next week.
In the meantime the members will study
the reports of both Dr. Maltbie and the
Bureau of Efficiency.
Following the meeting, Senator VAN
denberg, Republican Of Michigan, in
commenting on the Maltbie report, said:
i think it is well sustained analy-
sis, which requires far more proof to
justify the $50,000,000 valuation as
part of hte new contract than is yet In
evidence
Senator Vandenberg also said that he
did not believe the Bureau Of Efficiency
report was as much vindication Of the
merger agreement as has been indi-
Gated. The Senator called attention to
one paragraph in the bureaus report
In which 1t was stated that the most
reasonable course Is to permit the COM
panieS to merge and value them after
a sufficient time has elapsed to co-ordi-
thus effect the economy and public ben
eft expected from unified operation.
The Senator said that that paragraph
OF the efficiency report, If read inde-
pendently, reflects his state of mind a.
the present moment.
Mind Open on Subject.
Senator Vandenberg emphasized that
these were his preliminary views of the
report, and that he was still of an open
mind to study the question. He de-
clared that the valuation and the uueS-
tlon OF economy are regarded as Specu-
lative today and added: Speculative
arithmetic should not be frozen into a
permanent contract. am in favor OF
a merger, but the fair thing is to pro-
ceed on the general structure proposed.
poStponing these speculative questions
to such time as they can be reduced
to a definitive basis.''
Senator Vandenberg indicated that he
was considering whether 1t would be a
fair solution to permit merger on a
status quo basis for five years and at
the end of that time settle those uues-
tions which he regards being Of spec
ulative nature today.
He pointed out that both reports
agree that the power chapter should be
rewritten.
Capper to Study Report.
He also stated that both reports agree
that the merger contract would permit
the imposition of a super-fee by the
North American Co. In connection
with this question Senator Vandenberg
said he did not object to such a fee in
itself, provided it was subject to the
supervision of the Public Utilities Com
Senator Capper said he wanted to
study the Maltbie repore before express
ing his views concerning it.
Senator King of Utah also declared
he wanted more time to study the re-
port before commenting.
The ultimate conclusions of DR.. Malt
bic, as stated in his report, are:
That a uniication of the street rail-
way and bus lines would be productive
of many advantages to the public and
to the companies"
The proposed unification agreement
should be modified or altered in these
respects.
(a) After examination of all avail
able data and of the property, I do not
recommend the acceptance of S50.000.-
900 as the present value Of the property
and as the amount to be used as the
basis for determining fares for a dec
ade.
The proposed method for adjusting
this rate base from time to time does
not commend itself.
It is not customary for merger agree
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