Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-08-10
Commission Considers Pro-
posaI Relative to Power
and Gas Light Properties.
PHONE SYSTEM WOULD
WAIT DIAL INSTALLING
Main Purpose of Street Car Inquiry
Is to Prevent Another Fare
Increase.

Railway & Electric and Capital Trac-
ton Co.'S, ordered several weeks ago by
the Public Utilities Commission as
sequel to the action of the District Su-
preme Court in increasing car fares,
likely will be a forerunuer OF an ex-
haustive investigation of the value of
other utility corporations IN the Dis
trict.
The commission let it become known
yesterday that 1t is considering pro-
posal to revalue the properties of the
Potomac Electric Power 90. and the
Washington Gas Light Co. as well as
the car companies. The Chesapeake &
Potomac Telephone Co. probably will
be spared a revaluation for some time
at least until the installation of its dial
system in the District is completed.
The revaluation of the car companies,
however, is to be undertaken first and
preliminary plans have been made to
start about September /. BY that
time the commission hopes to have its
new engineer, provided in the current
District appropriation act, who will SUI
pervise the technical work involved in
the proceedings.
Purpose Of Retaliation.
Although the primary object of vir-
commission, is to bring about reduc-
ton in rates, this Is not wholly true In
the case of the car companies. The
main purpose of revaluing the proper
ties of the traction lines at this time. 1t
was revealed, is to preclude the COM
panies from going back to the courts
within the next year and asking for a
still higher fare.
With the present fare of 10 cents
fNy2rs fnL fnF
Commission is confident that neither Of
the car companies can earn, under
present conditions, a fair return on
their respective valuations. Thus, they
will be in a position to appeal to the
court at any time for higher fare and
probably gss 1t, unless thwarted by such
a proceeding as a valuation, which, 1t is
estimated, would take about two years
to complete.
A new valuation Of the car COM
panies also is desired In view of the
possibility of a merger. It is felt at the
Commission that 1t can bring about
reduction in the valuation of the Capt.
tai Traction Co., though there Is some
doubt whether the revaluation proceed
ings would have the same effect on the
value of the Washington Railway 81
Electric Co.
The commission is anxiously await
ing the July financial reports OF the
car companies to determine what effect
the higher fare has had on their in
come. These reports are scheduled to
be submitted the latter part of this
week.
In view of the inroads made on the
street car business by the low-rate taxi
cabs, however, the commission feels
certain that the higher fare has beep
of little or no benefit to the companies.
During the first six months of the
current calendar year the two COM
panies lost 1898 900 revenue passen-
gers in comparison with the same
period of 1929, and the 35-cent cabs
are held to be largely responsible.
Assessment Of Cost.
The first step in the revaluation of
the companies will be an assessment
against them for the cost Of the pro-
ceedings. Under the law, this assess
ment is amortized and charged to oper-
ating expenses by the companies. The
money will be used to hire engineers,
accountants and a clerical staff. Every
piece of property of both companies
will be inspected and appraised. Rates
will be drawn up showing the deprecia-
ton of the various items of property
and a tentative figure set for the
valuation.
Then will come public hearings, at
which the valuation force will read its
conclusions into the record and SUBJ
NIT itself to cross by law
yers for the companies. The companies
also have the p&vilege of putting in any
evidence they desire to combat the
figures submitted by the commissions
experts. After this procedure the COM
mission will fix the new value.
The valuation proceedings at this
time were urged by Richmond B. Keech,
peoples counsel, before the commission
as move 70 bring about possible
reduction in fares. Fares are based
upon valuation, because the law pro-
Vides that public utilities shall be per-
mitted to earn a reasonable rate OF
return on the fair value of their prop
erty. Thus, If the valuation claimed
by the companies could be reduced
enough to show exorbitant profits there
would be hope of reduction in car
fares.
On the present valuations the COM
panies admittedly are earning less than
reasonable" return. In the case OF
the Capital Traction Co., which Is
earning less than per cent, $S,0O0,-
600 would have to be deducted from its
present value before its return would
begin to approach per cent, which
the courts in this Jurisdiction have
held to be reasonable 1t Is regarded
as doubtful If any such result as this
will be obtained, but Mr.. Keech's posi-
ton is that the public, whom he repre-
sents, is entitled to certainty in the
matter Nf valuation IF 1aihlip utilities