Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-18
CAR FARE HEARINGS
WILL Be RESUMED
WITH v. R. f. CASE
Affirmative Arguments Before
! Commission Expected to
Cover Three-Week Period.
HOLD RATE RETURNS
TOTALLY INADEQUATE
Commissioner Hartman Will Have
Freer Hand Than in Traction
Company Case.

Public hearings on the petition of the
Capital Traction Co. will enter their
fourth week tomorrow. When the
hearing is called to order by Chairman
Mason M. Patrick of the Public Util-
tiles Commission the Washington Rail-
way g. Electric Co. is expected to begin
to put on its affirmative case. 1t took
the Capital Traction Co. three weeks
to do this and there is no reason to
suppose that it will take the railway
any less. Both companies are asking
for an increase in car fare to 10 cents
cash, four tokens for 80 cents. The
present rates are cents cash, six
tokens for 40 cents.
The Capital Traction Co. filed its
petition for an increase June Is, ask
ing that the Washington Railway G.
Electric Co. be made a party to the
case, but on July the latter company,
in answer to an order by the commits
sion making it party to the case,
filed an independent petition for an
increase of fare. This Is the petition
on which evidence will be introduced
tomorrow.
Returns Claimed Not "Fair."
The petition sets out that the fair
value of the company and its railroad
subsidiaries as of December 81, 1928,
was $19,210, 1899, and that the conf
pany earned a rate of return on its
value of 3.94 per cent in 1927 and 400
per cent in 1928. For the IL months
ended April 80, 1929, the company
claims to have earned q rate of 3.92
per cent on its true value. These
rates, the company contends, are not
fair" returns. On the contrary, thev
are totally inadequate, unreasonable
and confiscatory of its property and
1-trr Ia
ent has been deprived and Is being
deprived, of its rights and of due proc
ess of law guaranteed to it by the Con-
Stitution of the United States" The
company says further that since its
present rates of fare we're established
u922) it has never earned a fair re-
turn upon its value, and that the re-
turns earned have varied between ABA
and 1856 per cent. If this rate of fare
Is continued the petition holds, "its
property will continue to be conf1s-
Gated and used by the public without
just compensation and contrary to the
: Constitution of the United States and
without due process of law" Even after
the higher fares sought are granted,
: should they be granted, the petition
holds that the company would still re-
ceive less than a fair return on its
value. Nothing is stated in the petit
ton as to what the respondent would
consider a fair return.
Freer Hand for Hartman.
Commissioner Harleigh H. Hartman,
who asked countless searching questions
during the introduction of evidence by
the Capital Traction Co.'S case, will
have a freers hand with the railway
case. In the former case, objections
by the company'S lawyers restricted him
pretty generally to entries on the COM
panyS books subsequent to January ],
1925, the date on which the $25, 600, 900
valuation fixed by the District Court of
Appeals became effective. No such
court determination has ever been made
of the Washington Railway & Electric
Co.'S value. and there seems to be
nothing that would prevent questions by
Mr.. Hartman on entries in the COM
panys books since the beginning of
its history in the horse-car days.
S. r. Bowen, vice president and
counsel, and John S. Barbour, associate
counsel. will present the case for the
company.
The most outstanding development of
the past week was the filing by the COM
mission of an outline merger plan which
it would approve, with any modification
of detail which might be agreed upon
by the companies and the commission.
This plan. a 24-page document. was
sprung" on President John H. Hanna
of the Capital Traction Co. without
warning last Tuesday.
But Mr.. Hanna has not yet replied
whether his company would approve
such a scheme or not It follows close
ly the model of the original Wilson
merger plan, with the notifications
adopted by the Senate District commit
tee, and important changes written in
by the commission itself.
One of the changes that has escaped
notice thus far is that the commission
plan, in setting two-year period during
which fares shall remain stationary, Sc
lects the fares as they were on August
1, 1929. The plan was submitted Au-
gust Is and, of course, on August l the
fares in effect were the 8-cent-cash,
six-tokens for 40 cents rate against
which the companies are appealing. As
Stunning, therefore, that the companies
as result of the present rate case OBJ
tain some increase of fare, and that the
merger legislation is passed at the next
session of Congress, the fares would
automatically revert to the present level,
and remain there for two years. In this
connection it should be noted that the
old plan provided for only one year of
stationary fares.
w. X. T.. Out of Merger.
Under the commission plan, the
Washington Rapid Transit Co., which
operates the line of buses on Sixteenth
street, Is left out of the merger. After
the two rail companies are merged into
the new Capital Transit Co., the bus
company would be bought up at an APP
praisal approved by the commission.
One of the features CT the old plan that
caused much criticism was that Harley
p. Wilson, majority owner of the stock
in the company, would have been paid
S1,l46,00O for the bus company, which
has been losing money steadily for some
time.
The capitalization of the new COM
pany under the commission plan follows
closely that under the Wilson plan; au-
thorizing an initial capitalization OF
$49, 99I 900, of which $l2,000,000 is III z
per cent preferred stock, $19,883, 900 in
common stock and $l8,l08,000 In fund
ed debt
No valuation is established for the
new company. There is provision that
rights accruing to the respective merg-
ing parties shall be preserved to the
new company. The valuations will have
no bearing for two years, however. while
the rates remain fixed. The two years
would probably afford enough time for
valuation of the new company.
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