Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-10-21
Citizens Federation Official
Sees Huge Earning Gain
for Capital Traction Co.
DELIVERS BROADSlDE
ON EVE OF DECISION
Utilities Commission, Anxious to
Decide Case, May Make
Ruling Tomorrow.

PI1i4iilIlS W Lldhc duUtIleI dbG6mpG To-
morrow to dispose of the long pend
ing application of the Capital Traction
Co. for 10-cent fare, William NICK,
Clayton, chairman Of the public util-
tiles committee of the Federation of
Citizens Associations, last night I'M
loosed final broadside against a fare
increase.
Clayton, who, with William A. Rob-
erts, his associate on the federation's
utilities committee, has led the fight
against 10-cent fare, declared that
the proposed increase would enable the
Capital Traction Co. to pay a 10 per
cent dividend on its stock, while the
Washington Railway & Electric Co.
could double its present z per cent
dividend payments.
Anxious to End Case.
The commission will resume hearings
on the gas valuation case tomorrow
morning, but under a prearranged
schedule it will adjourn about o'clock
in the afternoon to again take up the
higher fare petition and dispose of it If
possible. Despite reports to the con-
trary, it is known that the commission
is anxious to rid its calendar of the car
fare case so that it can give undivided
attention to the equally important gas
valuation proceedings.
Several days ago the commission was
reported to be ready to grant the in
crease on the ground that it could not
escape the public utilities act which
says that public utility corporation Is
entitled to earn a fair return on its
valuation, but developments since seem
to indicate that possible legal way has
been found to avoid such action.
william w. Bride, corporation coun-
sci and the commissions general coun-
sci, pointed the way with a suggestion
that the Washington Railway & Electric
Co. first be denied an increase, and the
Capital Traction Co. then told that it
would be idle to grant it higher fare
in view Of the announcement OF PreSi-
dent John H. Hanna that his company
would not accept 10-cent fare unless
the Washington Railway & Electric Co.
is similarly treated.
Bride to Be Called.
Serious thought has been given
Brides suggestion by members of the
commission, and indications are that it
sion when consideration of the fare case
is resumed. Bride also will be called
before the commission to give further
advice on his proposal.
The commission Is represented as
believing that if Brides plan is legally
sound and will stand up in the courts,
it will drop the Capital Traction Co.'S
plea for financial relief pending action
on the merger. What the commission
is particularly anxious to avoid is hav-
ing any move it may make, overthrown
by the courts. There Is no doubt in
the minds of the members that the
company will appeal to the courts
should their decision be unfavorable.
Although Brides proposal is to be
the dominant topic of consideration.
the commission is expected to devote
some time at least to a renewed dis
cussion of the necessity of a revaluation
of the Capital Traction Co. Col. Har-
riSon Brand, jr, vice chairman of the
commission, particularly is interested In
this question and he spent considerable
time at the Capitol yesterday making a
research to determine the motive and
the spirit which actuated Congress to
create Public Utilities Commission.
Sees 100000 Increase.
Osaytons closing attack against q
higher fare is contained in a prepared
statement which he distributed to Dis
trict building reporters. 1t follows:
Because the Capital Traction Co.
lacked some $4,000 from current
profits to pay a I per cent divident of
$40, 900 on its $12,000,000 of stock in
1927, having paid that rate of dividend
for the past years, the Public Utilities
Commission is asked not to increase
the fares on the Capital Traction Co.
to make up that amount. but is asked
to award the Capital Traction Co. q
fare that Is expected to yield an in
crease over 100000 year in net reve-
nue. and to pass on similar amount to
the Washington Railway & Electric Co.
Should the commission see 1t the
way the companies insist they must
and order this fare increase. the Capt.
tai Traction Co: would be able to pay
a 10 per cent dividend on its $4,000
900 of stock and the Washington Rail-
way & Electric Co. would be able from
the increase to run the z per cent divi-
dend now paid on its $6,500,000 COM
mon stock up to IA per cent.
THE Capital Traction Co. has over
q million and one quarter dollars ac-
cumulated profits available for payment
of dividends in its surplus fund; also
over million in its insurance and
other funds, and nearly three million
in its depreciation reserve, all made off
the car riders of the District of Column
oia.
Cites w. r. & E. Figures.
The Washington Railway & Electric
Co. has approaching 100000 on its
cash reserve; its depreciation Is fixed
On its books at 100000.
The Capital Traction Co. pays to the
,ar riders 8 per cent interest when it
oorrows from the depreciation reserve
by the company from the peo-
pie in their fares.
THE Washington Railway & Electric
Go. pays no interest whatever to the
;ar rider for the use Of the deprecia-
ion funds.
Contrast these dividend rates Of 10
and IA per cent on the companies stock
With the or per cent the car rider
'eceiveS from banks and trust COM
oanieS on money he loaned them.
Not only has the car rider the hot
md of the poker thrust into his hand
,ut his hands are clamped tight down
~, for fhNca vrhN orc loft fr rfrla tho