Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-05
What Are Public Rights
In Car Fare Litigation?

To the Editor of The Star:
The car-riding public Of the District
of Columbia reads items of news con-
corning preparations being made by the
street railway corporations to take the
question of increased fares into the
courts, but we get no information as to
what effort will be made to protect the
great public interest involved in this
litigation.
We are told that the corporation is
going to ask the court to put into effect
at once the higher rates Of fare. To
us, this indicates that the court will
be asked to decide the case at the be-
ginning in favor of the rail lines and
hear and determine afterward. With
another period of long-drawn-out liti-
cation looming, during which time the
car riders would thus be required to
pay the higher rates, what considera-
ton will be given the great public in
terest involved if such an order imme-
diately be issued? In the absence of
any order of the commission fixing
higher rates, does there repose in q
court of equity, in advance of any con-
Sideration of the case, the power to
fix rates that the commission has not
ordered, but has emphatically denied
to these corporations for good and suf-
would like to know whether the lawyers
designated to represent the people will
refrain from agreeing to any present.
ments or allegations, Ito make up the
record" that the corporations may put
forth for corporation advantage alone?
Will that railway company. which so
tenaciously hangs on to its valuation"
as of 1925, really have any valuation
as of 1929 that the court may recog-
nize when the corporation asks for an
adjudication of the points at issue?
And should the commission and its
attorneys be prepared to stand on the
law for public protection and unwaver-
ingly uphold the right under that law
to make the actual valuation as of 1929
that alone may be used now as a basis
for consideration in a rate-making case?
Should they Scrupulously steer clear of
acceptance of any figures of valuation
put forth by corporation attorneys, cor
poration engineers, or corporation Off
GERS and directors, who possess no
authority under the law at any time or
under any circumstances to make a
valuation suitable to their particular
aims and purposes2
Will and should these peoples at
torneys maintain the right to ascertain
the actual and observed depreciation of
the railway properties that might be
deducted not only from the valuation
of 1925, but from all the railway physi-
cal property used and useful for the
convenience of the public" as it exists
further deprecated today?
Whether It is known to the peoples
lawyers that the valuation as of 1926,
set up "for rate-making purposes"
only, has been so construed by a rail-
way company or its spokesman as to
claim theoretical value for the stock
OF 166 to ITO Share-at time when
it would bring on the market no more
than $110 a share, as admitted, and
when it is now said to be far below
that price-and whether such con-
Struction is an indirect watering of
stock" that is in violation of the in
tent and purpose of the public util-
tiles act in its enumeration of the eIe-
mentS to be considered in ascertaining
the actual financial condition of a
public utility and the fair value of a
street railways physical property?
Whether the valuation as of 1925
has been or. is being construed and used
by any street railway company to take
from the car rider the potential earn
ings" under said valuation-not the
existing rate of fare, but "a rate OF
whether that construction of a court
valuation discloSes an intent and purpose
to take "all that the traffic will bear"
without consideration for the rights and
equities inhering to the public under the
law and in the unamended charters
originally granted to street car lines?
Whether such publicly disclosed in
tention and manipulation, If so dis
closed, is reason sufficient for court
of equity to rule in favor of the public
interest on the foundation principle OF
just adjudication that "those who seek
equity must do equity?
Whether the present rates of fare are
not excessively adequate and capable
Of producing returns of 10 per cent OIL
more under conditions of augmented
traffic, as demonstrated by a return ir
previous years of more than 10 pei
cent under a scent fare, a Just valu-
alton and high peak of passenger
support?
Whether a natural and orderly
progressive change in mode of trans
portation affecting passenger rail lines
may ever be utilized legitimately, under
a theoretical valuation, as reason Oh
excuse for imposing on all car riders
the obligation of making up losses sc
sustained by unrelated and unintendeC
competition? Whether, in fact, a court
in America has power over com.
munity of free people to decree thai
they shall be tribute bearers, with nc
added compensatory return, to main.
tain and support private corpora.
ton, which evidences no bushes.
ability to overcome nor enterprise tx
regain lost patronage, though it have g
free rein and an open field in which tt
achieve victory over such circum.
stances? And may it not also be true
that a court of equity is no proper place
in which to ask for the imposition OF
penalties upon the innocent in order
to obtain such relief?
X \ 4 X
Whether a theoretical valuation or
which the corporation relies for revenue!
to pay dividends on invested capital is G
valuation in its workings equitable tt
the public, when the car riders actually
pay in net revenues sufficient to give
to the stockholders all they are reason
ably entitled to, only to awaken to the
fact that this net revenue so paid in i
diverted In part to surplus and aWaJ
from the pockets of the corporation's
own stockholders? And whether sucf
segregation of net profits, temporarily OF
permanently, is equitable as between the
car riders who fully pay and the stock
holders who are lawfully entitled tC
receive? Whether, also, this segrega-
ton of net profits is employed or used
as device to exact higher fares?
Whether such lawyers for the people
should strive to show to the court thai
the obligation of contract may be seri-
ously impaired if a rate Of fare is
ordered or charged unreaSonably and
unjustly 100 per cent in excess of the
rate of fare originally specified in the
charter or charters of street RAILWAYS
when such organically prescribed rate
of fare constitutes the most vital com
pensating advantage to the public in the
contract NIrninh AIIrannI ~