Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-05
1GCENT FAREPLEA
AGAIN IS ATTACKED
BY UTILITIES BODY
Commission Says Street Car
Companies Have Failed to
Prove Valuation.
STUDY HELD HAMPERED
BY LACK OF INVENTORY
Brief Filed With Justice Wheat
Says Desired Records Were
Not Furnished.

A fresh attack on the Decent street
Car fare was made by the Public Utili-
ties Commission in a brief filed before
Justice Alfred A Wheat in Equity
Court today. The court has under con.
sideration a petition by the Capita
Traction and Washington Railway &
Electric Cos. for an injunction COM
handing the commission to increase
cents cash. four tokens for 80 cents
The present rates are cents cash, six
tokens for 40 cents.
The brief states that the companies
have not met the burden of proving
what their valuation is. of proving what
their operating return is. or exactly
what the return would be should the
increased fares be granted.
Two Questions Are in Issue.
1.-TWO questions of fact are in ISSUE,
the brief said, 1.-The amount of net
operating income from street car serv-
ice In the District earned by each
company and the fair present value of
each on which return is to be COM
puted. The burden of proving both
rested on the companies and their
failure with respect to each was stated
in the commissions decision.
The reported earnings of both
companies cannot be correct because
their accounting practices are directly
opposite. It is apparent that the COM
panies' failure to meet the burden OF
proof left the commission without a
record on which it could approximate
the actual net income from street rail-
way operations or make any reason
able estimate of the return being re-
ceived on either the claimed minimum
or fair present value.
THE evidence with respect to present
value affords even less basis for a
final audit. There has been no in
ventory of the properties of either
company for a period of Is years prior
TO the hearing.
THE accounting entries deal with
money, not units of property. The
commission was asked to rely for prop
erty changes, due to retirements, upon
bookkeeping entries which admittedly
were not in conformity with the ap-
praisal. The record does not show
the property in existence or that used
in carrier service.
only on inventory can disclose
structures in place but not in use and
not retired in the accounts. Only an
inventory can disclose property used in
whole or in part for non-carrier pur-
poses. No other means can disclose
vacant buildings or expensive Struc-
lures built for uses to which they are
no longer devoted. The public, in
equity. is entitled to have the companies
submit an inventory before they are
granted an increase.
AT the opening Of the hearing the
commission pointed out the necessity
for proving the present value. The
Capital Traction Co. stated that it had
no intention Of proving present repro
duction costs.
Appreciation Deductions Not Made.
There was no showing of an invest
msnt figure, record money outlay,
reproduction program or any of the
recognized factors essential to the de-
termination of value
'"rhe record contains extended proof
that the properties are in a deprecated
condition and that they had been in
spected for depreciation by the COM
mission. Yet the companies make no
deduction for appreciation. Accrued
depreciation is very much in issue in
this case, and it seems fair summary
of the evidence that 20 per cent of that
part of the claimed minimum value
which includes physical property and
OverheadS attaching to it, should be
rejected to Offset actual depreciation.
This would amount to $4,448, 492 for the
Capital Traction Co. and S2,446,777 for
AAAC " doAA4lASlOll halfway O. w.
The plan OF avoiding valuation by
adding accounting sums to inventory
figures, which produces the companies
alleged minimum, necessarily works to
their benefit and the public detriment
The Importance of this issue 10 the
public is apparent"
One OF the elements of the case chal-
1enged in the brief was an estimate by
the companies that if the new rate of
fare was put into effect, 85 per cent of
the revenue passengers would buy
tokens instead of cash. At present,
63.5 per cent of the riders buy tokens
and the number has been declining for
some years The commissions brief says
that there is no reason to believe that
this percentage would ensue and that
If the same percentage bought tokens
after the increase as now, the return
on the claimed minimum valuations
would be TAT per cent for the Wash
ington Railway & Electric Co. and 5.73
for the Capital Traction Co.
Asks Separate Consideration.
The two cases." the brief says, must
be considered separately. The alleged
needs of the two lines are not the same
IF the income and value figures of the
Capital Traction are accepted, those OF
the Washington Railway & Electric
must be rejected because their accounts
are on an opposite basis.
The carriers do not request rates
which, according to their figures, would
produce a compensatory return. APP
parently the traffic would bear no more
The constantly decreasing patronage at
IN even lower rate concurrent with a
rapidly increasing population is evil
dence that the requested rate would
exceed the value of the service to many
With rates at this maximum possible
level. there would be no justification
for uniform fares unless each company
met the burden of proof and made 9
clear showing that any lower fare
would be confiscatory for it,
The brief was prepared by Commits
siOner Harleigh H. Hartman, the lega
member of the commission. The cast
was orally argued last week before
Justice Wheat.