Evening star., 1932-07-29
PHONE FIRM FIGHTS
VALUATION MOVE
At RATES HEARING
Company Seeks to Block
Evidence Presented by
Commission.
PROPER NOTICE HELD
NECESSARY FOR PROBE
R. A. Van orsdale, Utility Counsel,
Argues Separate Hearing Must Be
Called to Examine E;gureA

Arguments on a motion Of the Ches-
apeake g. Potomac Telephone Co. took
up the entire morning session of the
public hearing on telephone rate re-
duction before the Public Utility Com
mission today.
The arguments were directed to a
motion of the company to strike out ell
testimony and exhibits offered to prove
the value of the company's property on
the ground that rates cannot be set
without a proper valuation and the
evidence of value offered is insufficient
The company said in its motion that
1t had no notice that the hearings we're
to be held for the purpose of proving
value and that the public utilities act
insists on such notice as a formal pre-
requisite to any valuation proceeding.
The evidence on value introduced by
witnesses for the commission, the COM
pany claimed. afforded no basis on
which the commission could learn
whether or not the company is now
earning a reasonable return upon its
rate base.
Hits Commission Figures.
r. A Van OrsdaIe, counsel for the
company, opened the argument. He
quoted from transcript of the evidence
to show that the figures offered by COM
mission ss witnesses on the reproduction
cost OF the properties, less deprecia-
ton. were not based on physical in
ventory and that the company Is not
earning reasonable return on its
book value"
He made the point that ascertain
ment Of values has no place in a rate
proceeding, but 1t is an entirely Sepa-
rate proceeding governed by separate
provisions as to notice, etc The only
evidence of value which can be offered
In rate proceeding. he said, would
be the findings Of value as determined
by the commission under the law.
Since there has been no such finding
there can be no rate case.
Arguing for the commission, Assistant
Corporation Council William A. Rob-
ertS said that rate making is a legiSla-
tive matter and need not be preceded
by valuation. Valuation is useful only
in judicial test of whether the rates
| set up by the exercise of legislative
| power yield the utility the reasonable
| return guaranteed it by the Constitution
| of the United States.
Introducing evidence as to value, not
based on complete valuation. he said.
the commission had gone further than
| II Wdo ICQuucO 10 III CTueI 10 ASSURE IL
self that the company's constitutional
rights would be protected in any rate
order to be adopted.
Objection Left Out.
In the companys original motion,
filed at the outset Of the case. 1t had
been moved to strike out all evidence
relating to the depreciation on the
ground that this is a matter controlled
by the Interstate Commerce Commits
sion and not by the local commission.
In their revised motion offered today,
however, the company made no refer
ence to depreciation and did not press
the point in argument.
Mr.. Roberts, nevertheless, undertook
to argue the propriety of a consideration
Of depreciation by the Commission.
A consideration of depreciation has
proved to be the main bone of conten-
ton thus far, Commission witnesses
| claiming deduction of 8 million dol
lars should properly be made on this
score. Mr. Roberts argued that over
period of years accruals to deprecia-
ton reserves by the company had been
too high.
George P. Hoover started his rebuff
tai argument shortly after Mr. Roberts
conclusion. After ruling on the motion
sometime today, the Commission will
set time within which the company
is to prepare its case. The company
has asked for go days but the Commits
sion has notified it that only a limited
| time will be allowed.
The original notice in the present
case was served on the company May 2.