Evening star., 1933-11-16
GAS COMPAN|E
WORTH S465,00O
Klein Tells Utilities Commits
sion Valuation if Both
Were Reorganized.

1t would cost $465, 900 to organize the
Washington and Georgetown Gas Light
Companies if they were reproduced to-
day. August c. Klein, valuation engi-
neer of the Washington Gas Light Co.,
told the Public Utilities Commission at
valuation hearings today. Accordingly,
this sum was included as an overhead
expense in the companies valuation
figures.
Mr. Klein testified also that the as
sessed valuation of the companies lands
was $l,370,979. In computing taxes dur
ing construction. however, which he
said would amount to $146,000 for the
two companies, he did not use the as
seSSment figures, but used instead the
reproduction cost of the lands which
other witnesses previously had testified
amounted to s3,289 900. These taxes,
which would have been payable during
reconstruction of the plants, were added
as another item of overhead expense.
The hearings, which heretofore had
concerned themselves with more or less
tangible subjectS-land, buildings gas
pipe and so forth, reached more in
tangible and speculative phase yester-
day afternoon when Mr.. Klein launched
into testimony concerning overheads.
In order to comprehend the drift
O1 his ISIildIkS 1t ID 1lSISSSdIg W AC-
member that under the reproduction
theory which forms the basis Of his
testimony the two companies must first
be imagined to have disappeared COM
pletely from existence, buildings, gas
works, pipes and all. and then To be
reproduced, from the ground up, exactly
in the condition in which they were
{ before they disappeared.
To accomplish this metamorphosis, he
said, a general contractor would have
to employ engineers to decide what
machinery to install, what buildings
to put up in order to house the ma
chinery decide upon where to put the
buildings. where to lay the pipe and
and so on.
Commissioner Elgen remarked, how
ever. that the engineers wouldn't have
to find this out, they already would
know. Mr. Klein's reply to this was
that Mr. Elgen's theory, if pursued to
its logical conclusion, would mean no
allowance whatever for engineering
while it is well known that it would
! take some engineering to reproduce a
large gas system.
This conflict, like many others which
have arisen, was allowed to remain un-
| solved. 1t will come up again later,
when the commissions engineers take
the witness stand to explain their views.
Even more speculative was the ques-
ton of legal expenditures during con-
| struction. Mr.. Klein admitted that it
was impossible to say how much the
general contractor would have TO pay
| lawyers during the progress of the work,
but undoubtedly it would cost some
thing, and he put the figure at $9l 900.
This, he said, would go for fighting
damage claims and other legal sery-
ices. He said sums for public liability
and workmen's compensation insurance
had been included previously in unit
costs and the legal expenses were
intended to represent costs to be in
| CURED over and above the insurance
premiums.
Mr.. Clayton inquired whether he had
considered that a cyclone might blow
the works down during construction
and had included any insurance
against that
There was no individual or specific
inclusion of cyclone insurance. was
the reply.