Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-20
TRACTION MERGER
PLAN HELD USELESS
President Ham Declares
Commission Without Power
to Effect Proposal.
CONTINUED From First page.)


eer?" asked Mr.. Clayton.
"I think Congress should delegate
the power to the commission or to some
other body to approve the agreement"
replied Mr.. Ham.
"Do you still think Congress should
delegate to the commission power TO
alter or amend the charter Of the
street car companies" asked Mr.. Clay
ton.
At this point the three members Of
the commission got together in whis-
pered conference, and a few minutes
later Chairman Patrick announced that
there were several matters in connec-
ton with the questions raised which
must be considered by the commission,
and recess would be taken until later
in the day.
Shows Construction Cost.
To show the increased value of the
with 1914, William F. Ham, president OF
the Washington Railway & Electric Co.,
presented figures showing the cost OF
various articles used In street railway
construction then and now.
Before he entered upon this line Of
testimony, Commissioner Hartman asked
whether the company had made any
change in its method of accounting as
a result of the report of the Bureau of
Accounts of the Interstate Commerce
Commission made for the Bureau OF
Efficiency in connection with the
merger investigation.
I'VE have made no changes" said MIR.
Ham,
AS illustrations of the way price levels
>have increased, Mr.. Ham said that the
average wage paid in the way depart
nlent of the company in 1914 was $86.67
for q 10-hour day, while now the aver
age Is $16780 for an 8-hour day. He
gave detailed wage figures for various
classes of workmen in that and other
departments, all showing big increases.
Wheels Cost More.
AS illustrations of the increase in the
cost of material he said cast iron wheels
between 1914 and 1929 had increased
n cent pound, or from u cents to
2 cents. Brake shoes had increased from
$40 to $50 ton, steel yokes from $50
to $3.50 a ton, slot rail from $40 to
$3.50 ton and trolley poles from SO
to $3.50 each.
At the request of Commissioner Hart
man he introduced index figures show
ing the comparative cost of electric
railway construction from 1913 to 1928.
With the cost in 1913 considered as 100
per cent, the index figure went up to
244.7 in 1920 and after that began to
fall until it was 202.4 in 1926. For 1928
the index figure was 203.1. Mr.. Hart
man asked Mr.. Ham whether he was
familiar with the change made by the
Labor Department in the basis of its
index figures recently and the reasons
for making It,
YES" said Mr.. Ham, "I think they
preferred to start with figure of two
or three years ago as a basis rather
than keep on going back to figures
which are only historically interesting"
Mr.. Ham then filed an exhibit which
showed for the years 1922 to date
operating revenue, operating expenses,
income available for return on value,
fair value and percentage return on
fair value.
Exhibit Reviews Revenues.
According to this exhibit, the COM
pany's maximum return on fair value
during the period was 452 per cent
in 1928, and the lowest was 500 per
cent in 1926. During the IL months
ended April 80, 1929, the company
earned return, according to the eX-
hibit, Of All per cent. Although the
company'S operating income showed
decrease between 1927 and 1928, the
company's income available for fair re-
turn showed an increase through cut
ting of operating expenses. The OPP
Grating revenue in 1927 was $5,287,-
493.40, and the operating expenses
$4,510, 764.45, leaving income available
for return of $776,72895. In 1928 the
company made in operating revenues
1921 ,926.35, but their operating ex-
penses were cut to $4,403, 1892, leav-
ing income available for return of
$8l8,196.43.
Chairman Mason M Patrick of the
commission asked Mr.. Ham to ex-
plan this increase in income available
for return.
Greatest Saving.
Mr.. Ham replied that the higher
income available for return in 1928 was
due to lower operating expenses result
ing from the fact that the District
appropriation bill was delayed in pas
sage that year, which caused a delay in
street improvements and consequent
delay in work by the car companies on
their tracks.
Chairman Patrick asked what the
greatest item of saving was from the
years 1922 to 1923 and Mr.. Ham said
1t was from the use of one-man cars,
which had saved the company during
that period $4,000, which would have
been spent If two-man cars had been
Little Black Book" Reappears.
Commissioner Hartman's little black
book" filled with typewriter questions
prepared after study Of the washington
Railway 81 Electric Co.'s accounts, made
its appearance again yesterday after
noon. BY the time the days session
ended Mr.. Hartman had asked Mr.. Ham
to answer "a of these questions. The
witness was able to answer some Of
them, but others he said he would an
Swer after he had consulted the records.
Several pages of questions were turned
over to the Stenographer for 1ncorpora-
ton in the record of the hearing. The
answers will be furnished later by Mr..
Ham.
Mr. Hartman said he could not find
any relationship between the amounts
which the company charged against its
as no longer useful and the amount
which had been put in the depreciation
account during the time the retired
property was in service. Mr.. Ham said
there was no relationship between the
two.
Criticism was directed by Mr.. Ham
against the rates fixed by the commits
sion several years ago by which the
company should accrue depreciation re-
serves. He said the commission had
made a fundamental error" in fixing
these rates as in fixing valuation.
Differences in the accounting methods
of the Washington Railway & Electric
Co. and the Capital Traction Co. were
developed by~some of Mr.. Hartman's
questions. He brought out differences
in their treatment of depreciation and
to their capital accounts or their valu-
alton figures. Mr.. Ham gave examples
of bettermentS which his company had
added to its claimed valuation as the
base upon which it requested increased
fares: !. "a