Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-31
Counsel for Federation of
Citizens Associations Files
VitrioIiC Brief in Utilities Case
"BROTHER ACT" CHARGED
between 2 COMPANIES
Recent Losses in Revenue Traffic
Held Motivating Cause, as
Returns Are Endangered.

Declaring that the real motive be-
hind the demand for higher street Car
fares was to allow the Capital Traction
Co. to continue per cent dividends
! on its stock, William NICK. Clayton
counsel of the Federation of Citizens
Associations, today filed with the Public
Utilities Commission vitriolic brief In
opposition to any increase in Washing
tons street car fares. The time for
filing briefs originally closed october %.
of time to prepare his reply to the
companies, which had claimed they
needed the increase to allow them to
obtain something more nearly approach
ing fair return on their valuations
than they say they have been earning
of late.
Mr.. Clayton assailed all of the COM
panies' contentious and urged the
commission not only not to increase the
fare, but promptly to cut fares for
school children to half.
Dividends Held Motive.
The crux of Mr.. Clayton's position
was that the real reason behind the de-
mand for higher fares was to allow the
Capital Traction Co. to continue the Z
per cent dividends on its stock, which
have been regularly paid for many
years. On account of recent losses in
revenue traffic, the company has made
up these dividends by drawing from
a cash surplus accumulated during the
prosperous war period
In order to do this, Mr.. Clayton said,
the commission is asked to grant the
Washington Railway & Electric Co., do
ing the brother act in the uniform
fare circuit" an additional $400, 900 in
higher fares, to be paid by the car-rid-
ing public in order that dividends may
not be reduced.
The brief summarizes the position of
the companies as follows: The Capital
Traction Co. has for many years been
paying 7 per cent dividends on its
100000 stock issue while the Wash
ington Railway & Electric has been
paying per cent on its $500 900 pre-
ferred stock and Z per cent on its
$6,50O,0 900 common stock.
Combined Surplus Reserves.
The companies have combined sur
plus reserves of $4,000, 1000 in cash and
depreciation reserves so full that the
Capital Traction Co. two years ago had
TO turn some of the money into earn
ings to prevent them from overfiowing;
the two companies issue some 1000 900
free passes annually, not counting the
free rides given to policemen and fire.
men in uniform, at revenue cost to
the company of something under $780,
900 a year; salaries of certain officers
of the Washington Railway g. Electric
Co. have been increased while there has
been no change in the wages paid the
platform men; no general officers salary
has been reduced; no additional stock
or bond issues are "even remotely dis
cerned in the financial horizon of either
company; no purchases Of new cars or
extension of trackage Is contemplated
by either company; no offer is made
to lift the "vexations nuisance tax" of
pay transfers between buSseS and cars
OF the same company.
Reluctance Is Charged.
Mr.. Clayton says that there is a
seeming acquiescence" on the part of
the Capital Traction Co. in the half
fare for school children proposition,
but on the part of its competitor only
the suggestion that high school stu
dents are old enough to pay the full
fare and the other students young
enough to walk.
he pointed out, which is party to the
case, does not pay the per cent tax
on gross receipts paid by other utility
corporations, and yet has public space
exclusively assigned to it on the streets
for parking.
Turning to the subject Of valuation,
much of the brief is devoted to an
exposition of the importance of this
subject, considered by Congress as Of
absolute and supreme Importance" !"
After laying this groundwork, the brief
examines the valuations presented by
the three companies and finds very
little to commend.
THE Capital Traction valuation" 1t
said, weak from recent judicial oper-
alton for the removal of its depreciation
appendix, dropSical from a badly gan
grened case of reproduction valuation,
did manage to stand upon its feet, but
with both arms clinging tenaciously to
the Constitution of the United States.
Repaying Good Turns"
"The Washington Railway g. Electric
valuation shuffled in supported on IA
year-old crutcheS, emaciated, wan and
pale, apologizing that it didn't really
expect to appear in the case, but was
forced in to obhge its old friend who,
in years long gone, had done it many a
good turn when both did the brother
act on the uniform fare circuit.
"The valuation of the Washington
Rapid Transit Co. was brought in on a
stretcher, but when counsel turned to
question, why it just wasn't there at all.
1.-The valuation of the Capital Trac-
tion Co., broken on the wheel Of public
opinion, discarded by the United States
Senate committee in its report to the
Senate on merger. set aside by some Of
its principal proponents, stands dis
credited by these most competent to
Judge impartially from the viewpoint of
the trained expert and analyst.
Valuation 10 Years Old.
"The Washington Railway g. Electric
valuation by the commission made in
1919 is 10 years old, Appeal to the Su-
preme Court of the District was taken
by the company the same year, and his
appeal is still pending.
The Washington Rapid Transit Go,
has never been finally valued, although
appeal after appeal to former commis-
sfons for the valuation Of this company
has been made on behalf of the pub
lic"
Speaking of the plea by the petition
ing company to be protected from COM
petition by the Washington Railway e.
Electric Co., the brief says that this
protection would cost the riders OF the
latter line 100000 annually. and that
the contention is utterly indefensible
| In both law and morals.
"There Is not line in either of the
charters of the companies or In the
| public utilities act or any other statute
of Congress locally applicable that
| directs, permits or allows such an un-
considerable act on the part Of the
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