Evening star., 1928-03-07
MERGER VALUATION
INQUIRY APPROVED
Utilities Commission Permits
PubIic's Representatives
to Probe Methods.

The Public Utilities Commission let
down The bars today at the merger
hearing in permitting representatives of
the public TO inquire fully into the
methods and clements employed by the
two traction companies in determining
the fixed valuation contemplated In the
merger agreement.
William F.. Ham, president OF the
Washington Railway g. Electric Co, pre-
yiously had warned that, unless the
Public Utilities Commission agrees to
$50. 900 900 as a rate base. the present
merger negotiations are of
with today's ruling by the commits
sion. Mr.. Ham was put through an ex-
ha,lstive cross-examination by William
A. Roberts. vice chairman Of the public
utilities committee of the Federation OF
Citizens Associations. relative to all
methods uscd In calculating the valu-
alton. whether approved by the courts
or otherwise.
Companies Cite Precedent.
The action OF the commission in
paving the way for this inquiry was
based on motion made by Mr.. Rob-
ertS that he be allowed to pursue these
by the commission to the motions OF
S. r. Bowen and George r. Dunlop.
counsel respectively for the Washington
Railway & Electric Co. and the Capital
Traction Co. offering an objection To
such questions being brought up at this
time. Counsel had contended that in
the matter of the Capital Traction Co.
the final valuation and its method OF
presentation has been definitely set
tied, and that, In their opinion, a prece-
dent thereby being established i'll this
case, the Washington Railway & Elec-
trio Co is permitted TO make It's claim
for valuation upon the same principles
and basis.
while we do not believe that the
questions propoundcd by Mr.. Roberts
and Mr.. Clayton arc at all times reie-
want to the issue" the Public Utilities
Commission ruled, still We believe that
any questions asked having In view the
bringing out the fullest and most COM
plete information and data covering all
points at issue should be permitted. We
have decided that such questions may
be gone into by them with the provi-
sions only that any questions involving
legal matters should be covered In briefs
filed during the hearing. or In the sum-
ming UP at the end OF the case"
The fact that this Is a hearing In the
broad sense of the term and should not
be bound by legal technicallty.
Statistics Are Studied.
The entire morning was given over
To detailed statistics bearing on the
methods In arriving at depreciation
bettermentS. reproduction costs, retire.
ment of properties and numerous other
fa Ia LAT All
Washington Railway 81 Electric Co,
When the hearing recessed at noun Mr..
! Ham finally was excused.
The traction official, in reply TO one
| OF the numerous questions, said his
company has never reached an agree
ment with the commission as To the
actual cost of properties In service III
| 1914 lie estimated the present his
| torieal or actual cost az OF January,
| 1928, at SIS, 5,a06,b0o. but explained that
| this Is only about half the actual cost
based on reproduction values. which. he
said, have doubled sifice 1914,
Ham testified to n total accrued de-
probation reserve fund Of $i,ai0 o65 05
created, he explained. through charges
| to operation expenses fixed BY the Pub
| lie Utilities Commission,
w. u. g. 4. Income Shown.
In closing statement he put In
statistics showing the income OF the
| Washington Railway Il Electric co
I'm the District Of Columbia available
| for return upon Investments with sup"
porting statistical data for the years
| lpl4 to 1897. inclusive.
| In 1914 the operating revenue was
| $9,7ai,443. the operating income $9a7 =
| 63O less expenses. taxes and miaeellan-
eo,la. and lair value ot $ia,aaa 400.
| The return for that year was 8.a6
| per cent.
| For 1927 the operating revenue WAS
| ST., 81. .Ona the operating incnme, STAn,-
| ahb and the fair value, Sia,a61 800, ON
which the return was ap3 per cent,