Evening star., 1928-09-10

suit in an increase of fve-sixths of a
cent in token fare.
In asking for a higher fare, Mr..
Hanna stressed that directors of the
company were prompted to do so by
desire to maintain the per cent divi-
dend paid for the last 10 years on its
stock. 1T is true that the public utili-
ties commission should give no consid-
Grafton to the question of stock at this
nearing" Mr.. Hanna admitted in ex-
planning that the matter of stock divi-
dendS do not rightly belong in connec-
ton with a return on valuations
We would have no right to ask the
commission to consider stock were il
not for the fact that the company is
earning very far from reasonable re-
turn" Hanna added.
To pay the Z per cent dividend last
year, he admitted to Mr.. Clayton, the
company had taken $l32,546 from its
surplus. If the dividend had been
instead of per cent on the outStand-
ing S12,000,000 of stock, he admitted
the deficit would have been only $12,-
600. He declared the company in re-
cent years had been earning so far be-
low a reasonable return that the direc-
tors would no longer defer asking the
commission for prompt relief on the
application already three months old.
Called Reasonable.
"Our point of view is largely to pre-
serve this per cent dividend" Hanna
declared. He added that the rate of
fare requested would not constitute
more than a reasonable return on any
valuation placed on the company's
properties.
Earnings of the company as of July
81, 1928. were 3.8 per cent as compared
with earnings of 1856 per cent for 1927,
Mr.. Hanna told the commission.
In making application for a higher
fare at this time, Hanna pointed out
it is not being tied to the merger, ex-
cept to the extent that if the COM
panies were not ultimately to merge, he
would be asking for a much higher fare
than now
Replying to questions as to the effect
the merger would have on any in
crease at this time, Mr.. Hanna declared
that the increase, if granted, would
automatically go out of existence and
the present fare of 8 cents cash or six
tokens for 40 cents would continue for
one year from the effective date of the
merger
THE rate we are asking now would
be effective only until the merger takes
effect" he insisted
A straight Scent cash fare, Hanna
explained, would result in an increase
of S447,209 in net operating income
after deducting $82,174 for taxes. A
straight 10-cent cash fare, with the
alternative OF -four token for 80 cents.
would bring about an increase of
S386,506 in net operating income, de-
Quoting S7l,005 for taxes
Scores Change Making.
In giving preference for a I0-cent
fare. with tokens. Mr. Hanna explained
that the difficulties in making change
for an 8-cent fare would be so great
as to make this inadviSable
While the records show that moro
income would be derived from an 8-cent
cash fare without tokens. he said it would
be more equitable to the public to pay
the alternative fare, since most of the
car riders use tokens.
About IS per cent of the business
Hanna believes, would be on the
71a-cent rate
j. E. Heberle, assistant to President
Hanna, followed him on the stand He
produced figures showing the operations
and income Of the company through a
period of wears and brought UP to date
es based on the previous valuation by
the Court of Appeals in 1925.
The fair value as of Decembsg 81
i927. was stated as $26.024.599. -..