Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-07-20
Utilities Board Says Latest
Inquiry May Lower a
Valuation. U
OPPORTUNITY IS SEEN
FOR MUTUAL BENEFIT
Elgen Says c. g. P. Would Be
Ideal Place for Beginning Of
Federal Groups Work.

The Public Utilities Commission to-
DAY invited the newly established Fed
ersl Communications Commission 70
Join with II in making valuation Of
the properties Of the Chesapeake a.
Potomac Telephone Co.
The local commission already has
won 10 per cent reduction IN tele-
phone bills for subscribers here, the
case still subject 10 the Court Of APP
peals. However, in its letter inviting
the Federal body TO take a hand. 1t
points out that on new inquiry the
resulting valuation may be even lower
This move follows closely another
announced by the local commission
yesterday--the employment of An
drew Sangster. expert accountant. TO
study the telephone company's de-
probation figures, and the ordering Of
an investigation into proper and ade-
quate rates OF depreciation OF all
classes of property" of the company
and rules. regulations and forms Of
accounts regarding such depreciation"
Place 10 Start Work.
Commenting on his invitation to
the Federal commission today, Riley
r. Elgen, chairman OF the local COM
mission, said he believed the tele-
phone company here would be an
ideal place for the new commission
TO start the valuation work which
II is permitted To perform under the
communications act.
Members OF the new commission
Rafa llkF AL -,
progress on large and complicated
telephone plant. The local company
stands nineteenth among lib class
A telephone companies in the size
OF investment in fixed capital and
twentieth in operating revenues. Only
one company, that in San Francisco
has greater density OF telephone
subscribers per capital. Besides in
terstate messages, in which the Fed
eral commission would be particu-
larry interested, play an important
part In the revenues Of the Wash
ington company.
Speaking of the court case recently
won, the commissions letter said:
fundamentally. the base used was
tFended investment cost and, there
fore. a maximum f1gure. If a repro
duction program was adopted and
estimates were based upon the single
continuous impulse theory and other
normal processes in the determination
OF reproduction costs were followed.
the amount would be substantially less.
The commission has had in mind
making a revaluation Of the tele-
phone company's property In the Dis
trict of Columbia. which would in
clude determination of the original
cost to date of the property the re-
production cost new and reproduction
less depreciation. such as contem-
plated by your act.
Could Utilise Work.
1T occurs 30 us that in view of
the authority vested in the Federal
Communications Commission by Con-
Gress to make such valuations and
to determine such original costs the
work which this commission con-
templates could be utilized by your
commission. A part OF the cost Of
the investigation would be borne by
us and = part by the Federal Govern
ment. We believe 1t would be eco
nomically unsound TO pursue parallel
investigations.
I'VE would pursue this investigation
In manner which would meet the
needs Of both commissions. Duplicate
records could be made upon such
forms as would be acceptable to yoair
commission for It's files and at the
same time supply the needs of this
commission.
We would like to have your views
as 10 such cooperative project and
the extent TO which your commission
would participate in the expenses
thereof.
This commission is ready to order
an early retaliation of the company s
properties. Inasmueh as your body is
In a formulative state, it may be that
cooperation in this instance might
serve as test as to the esirability
Of pursuing such a course. Further
more, the property is compactly To-
Gated and at the headquarters OF your
commission. The field, engineering and
accounting work would be. therefore,
readily available TO the entire COM
mission.
You can rest assured that should
you decide TO join with the Public
Utilities Commission of the District
In such an investigation that you will
receive our hearty cooperation in Sc
curing for your commission the things
necessary in its valuation work under
your act