The Washington times., 1934-06-16
Act Cited

The District Of Columbia Utili-
ties Act Of March 4, 1918, in
terms applies to telephone com.
panies. Paragraph 16 Of that act
provides:
Every public utility shall carry
a proper and adequate deprecia-
ton account. The commission
shall determine the
proper and adequate rates of de-
probation of the several classes
Of property Of each public utility
Each public utility shall con-
form its depreciation accounts to
such rates >.
"An moneys In this fund may
be expended in keeping the prop
erty Of such public utility in re-
pair and good and Serviceable
condition for the use to which it
is devoted or invested, and, if in
vested, the income from the in
vestments shall also be carried in
the depreciation fund"
The Interstate Commerce Act
applies to corporations transmit
ting intelligence by wire from the
District Of Columbia to the States
OF the Union. Plaintiff comes
within this class. The Transpor-
tation Act Of 1920 amended the
Interstate Commerce Act to pro-
vide in section 20(5)-
The commission may, in its
discretion, prescribe the forms of
any and all accounts to be
kept by carriers subject to the
provision of this act, including
the accounts, records, and memo
randa OF the movement of traffic
as well as Of receipts and ex-
pend1tures of moneys"
The commission shall, as
soon as practicable, prescribe. for
carriers subject to this act, the
classes OF property for which de-
probation charges may properly
be included under operating cx-
penses, and the percentages of
depreciation which shall be
charged with respect to each of
such classes Of property :"
On December 81, 1881, the bal
ance in plaintiffs depreciation
account of $6,70O,0OO (the COM
pany claims the balance derived
from annual accrualS of depreci-
alton was only $5,800,0OO0 This
entire account was used for the
enlargement of plaintiffs plant.
1t was a bookkeeping account
and did not represent moneys
which were invested in securities.
It has never been the practice
OF the company to credit this
account with interest upon the
balance therein.
In 1921 the commission insti.
tuted a proceeding known as
formal case 102 for the consid-
Grafton Of rates of depreciation
to be charged by public utilities,
including plaintiff. Plaintiff OBJ
jected that Jurisdiction over it's
rates of depreciation had been
transferred to the Interstate
Commerce Commission by the
transportation act Of 1920. On
September 2, 1921 defendant COM
mission expressed the opinion
that there was grave doubt as
to it's jurisdiction over the tele.
phone company insofar as rates
Of depreciation were concerned.
Early in 1924 defendant COM
mission resumed hearings in for
NAL case 102 in the matter of
depreciation charges; plaintiff
moved that the proceedings be
dismissed as to it for lack of
jurisdiction. On May 7, 1924,
the commission filed a draft or
der. It concluded that para
graph 16 required a segregated
depreciation fund and the credit
ing Of interest thereon at the
rate Of 4 per cent, but stated
that an exception might be nee
eSSary in the case Of plaintiff
over whose rates Of depreciation
and the method by which depre-
citation shall be accrued the COM
mission evidently has no juriS-
diction. The draft order con.
tinued:
IF this utility elects to con-
tinue its present practice of &C.
cruing depreciation on the straight
line basis, and this method is
finally required by the Interstate
Commerce Commission, the Public
Utility Commission believes that
that fact must be taken into con-
sideration in determining the fair
value Of this company's property
in future rate cases."
Thereafter defendant commits
sion made no effort to take juris-
diction over plaintiffs deprecia-
ton charges until Order 1913 was
made