Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-02
Public Utilities Commission c
Lack of Full Membership
Given as Reason.
VALUATION OF COMPANY
PROBABLY TO BE MADE
Court Decree Two Years Ago Null
fed Last Rating, Which
Totaled $24,6s6,000.

A delay in the contemplated move Of
Ralph B. F1eharty, peoples counsel, be-
fore the Public Utilities Commission to
seek revision in telephone rates pend
ing the appointment of the commits
sion's complete personnel was recon-
mended today by B. NICK. Bachman,
chief accountant of the commission.
Bachman's recommendation is con-
tanned in report to Fleharty in answer
to his recent request for information as
to the commissions valuation of the
telephone properties and the rate of re-
turn it has earned since the compro-
mise agreement of two years ago, which
prevents existing rates from being dis
turbed before June /.
Hoover Expected to Act.
One position on the commission has
been vacant for several months due to
the failure of the Senate to confirm for
mer President Coolidge's nomination OF
Col. Harrison Brand, jr., and another
vacancy will occur May 81, when the
resignation of John w. Childress, chair
man, is to become effective. President
Hoover, however, is expected to fill on
of these posts within the next 10 days
Bachman'S report pointed out thai
the commission probably would have to
make an entirely new valuation of the
telephone company properties in view OF
the court decree Of two years ago which
nullif1ed the commissions last value OF
$24, 686,000. In this case rates coulC.
not be changed until the value is f1xeo
The company's return, based on tho
commissions original valuation o.
GO2 nm faI Ao,
been in excess of z per cent, a rate
which the commission heretofore has
considered fair and reasonable. On
the later valuation of $24, $3.50, 900, how
ever, the company, according to thu
report, did not earn in excess of
per cent. except during the year ending
last February.
Excess Totals S118,948 in Year.
The excess of per cent earned or
the original valuation, Bachman found.
amounted to s1l8,948 for the year end
ing February %, whereas the exces~
on the later value, which was set aSi6c
by the court, was $3,082 for the sam
period. The report, however. shove.
there is a general trend toward in
creased earnings.
1.-The company continues to build u
an enormous reserve for accrued d.
probation" Bachman said. 1.-The &C
crual for 1928 amounted to $1,129,71t,
or over 20 per cent of the total operat-
ing expenses. This sum plus maintc
nance costs, comprised Al per cent c
the total operating cost. The balanc
in the reserves at the end of 1928 W
| sc, 306 ass, or about "a per cent OF tn
book cost of the property"
Proper Rates Undetermined.
The commission, Bachman explainet..
has never determined what are tn
proper and adequate rates of depreci2-
ton. having been advised by the Inter
state Commerce Commission that it
had Jurisdiction over these items. How
ever, the rates used by the company TO-
its accruals, its reserve and the han
ding of this reserve, he said, really ar
the most vital of all questions atfectlnS
rates.
In connection with the revenues an
earnings for 1928, Bachman pointed Oh
| the year was abnormal. due to the fac
that it was a presidential election year.
and consequently there would have
been marked increase in revenue fro;1
subscriber stations as well as from mes
sage tolls.
According to the report, there was a.
average increase in local messages :.
month of 711,l43 and in toll message
Is, 440.
apparently most of the increase WIS
handled without any great increase Ii
expenses" the report declared, "as tn;
expenses increased only Is per cent
over 1927"
I'm view of the unsettled questions.
and particularly in the absence of the
finding of any value has been approved
by the commission Bachman said, mo
effort should be made to modify rates
at the present time, and the valuation
should not be revised until the person.
mel of the commission is complete. when
it can review the case and decide what
action should be taken"