Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-09-13
Peoples Counsel Declares
Traction Request Based Only
on Dividend Need.
HOLDS BASIS OF "FAIR
RETURN" is OVERLOOKED
Asserts Increase Would Mean De-
cline in Number of Passengers
With Fall in Income.


application for a higher fare was de-
manded of the Public Utilities Commits
sion today by Ralph B. Fleharty, peoples
counsel. on the ground that 1t was based
entirely on the urgent neeG of the COM
pany to pay Z per cent dividend on
stock, instead of the basis of fair re-
turn.
AS an alternative motion. F1eharty ask
ed the commission to withhold its de-
cision on higher fare until March 81.
1929, pointing out that Congress would
have ample time during the interval to
pass on the pending merger agreement
between the two street railway COM
panies and the Washington Rapid Tran
sit Co.
With these two motions before the
commission. Chairman John w. Chill
dress announced that the commission
would take them under consideration
without passing on them Immediately.
Hearings were adjourned until Septem-
Der 81. On that date the case of the
Washington Railway g. Electric Co. and
other lines will be heard. the Washing
ton Railway and Electric Co. system
having been made party to the hear
lngs by recent order of the commission.
Statistics Are Presented.
Upon the result of the commissions
forthcoming decision hangs the state
of increased fares to 10 cents cash or
four tokens for 80 cents, which, IL
granted, would be extended also to the
Washington Railway & Electric Co. and
other lines and busses in the District
which now charge less than a 10-cent
fare.
Fleharty's motion to dismiss followed
swiftly the presentation of a mass of
statistics bearing on the financial status
OF the Capital Traction Co.. which he
declared is far more healthy than trac-
ton officials have sought to make it
appear to the commission.
Closing his argument against an in
crease In fare. Fleharty declared that
testimony before the commission tended
to show the non-existence of any ur-
gent need Of the company. On the
contrary, he claimed the record would
show a very healthy condition" with
large reserve, and depreciation fund.
marily on the ground that the company
had made out its case on the basis of
urgency for the purpose of continuing
payment of per cent dividend to
stockholders
1t the application of the Capital Trac-
ton Co had been made on the basis of
a fair return on its property values.
Fleharty told the commission. his mo-
t1on would be clearly out of order. On
the other hand, he contended that the
application of the traction company had
no place in court.
Holds Fewer will Ride.
Testimony purporting to show that a
resultant decrease in car riders would
onset any financial advantage from a
nlgher fare was produced today by
Fleharty.
j. d. Murray chief accountant for
the Public Utilities Commission. File
narty's witness. estimated that a tenn
porary decrease of approximately 10 per
cent In the amount of traffic would
!oiiow the adoption of a l0-cent cash
lare or four tokens for 80 cents. as
proposed by the car company
questioned by Fleharty the public
utility accountant declared in his opin
lon that would wipe out the increased
fare. At the most. he said. the Increased
revenue would equal no more than
$4,000. which would be wholly insufici-
ent to enable the company to contjr-
ue Its per cent dividend on stock
without digging into its surplus as 1t
has been doing in recent years.
Murray said he based his estimate
OF decreased traffic in part on a state
ment made by William H, Ham. presi-
cent OF the Washington Railway g.
Electric Co. which would join in the
commission. During the hearing on the
1922 rate case. he said, Ham testified
tnat as rates 60 up temporary reduc-
ton in traffic would follow.
Testimony Held Pertinent.
This temporary period. Murray be-
neved. would vary from three to six
months. Cross-examined by traction
officials. he stuck to his opinion that
the decrease in car riders would re-
suit in wiping out any increase In rev.
enue that might be expected from the
higher fare.
Taking into account the merger sit
uation in Congress, Murray's testimony
is doubly pertinent, in view OF the effect
approval of the merger would have on
any increase in fares granted by the
utilities commission in the pending
case.
The merger agreement makes binding
the continuance of the existing fare of
8 cents or tokens for 40 cents for a
period of one year from the effective
date of the merger. Should the mer-
ger be authorized by Congress in De-
cember or any period before the eXpira-
ton OF the present agreement on June
l. 1929 any increase in fares granted
by the commission now would remain
in effect only temporarily.
BY refusing to waive the legal To-day
notice with respect to the order making
the Washington Railway e. Electric Co.
a party IN the present rate hearing
Fleharty has gained some valuable time
from the point of view of car riders.
The case of the Washington company
will be taken up on September 81. Either
the commission must postpone the
scheduled hearing on the revaluation of
the Washington and Georgetown Gas
Light Cos set for September "a, or
1t will be unable to reach a
decision on street car fares before that
date.
Cites Other Decreases.
Assuming that Congress eventually
agrees to a street car merger. as trac-
ton officials are convinced 1t will do,
the temporary relief proposed by the
at this time would prove q
myth If Murray's estimate Is correctm
He based his estimate of a 10 per centy
reduction in traffic on charts covering
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