Evening star., 1936-02-20
ESTIMATE LITTLE
MORE THAN HALF
|. OF 0FC.T.C.'ScLA|MS
Capital Transit Witness Is
GriIIed on 20 Per Cent
"0verhead" Additions.
C0NSULTANT FOR BUYER
SAYS $3.50, 1928 BARGAIN
View Is Questioned Closely by
Attorneys on Requirements
and Future Business.
BY DON S. WARREN.


Testimony that the present value
OF the Washington Rapid Transit Co.
is 1925, 1886, or little more than half
the valuation submitted by witness
for the Capital Transit Co., was placed
before the Public Utilities Commission
at noon today by its chief engineer,
Fred A. Sager.
This development came after COM
missions counsel had spent the morn
ing severely grilling the company wit
ness, Edward Roberts, New York, on
methods he had employed, in an effort
to show an allowance of 20 per cent
should be made in valuing the bus
company properties for going con-
cern" and other intangible "over-
heads
The Capital Transit Co. proposes to
pay s539.823 for the w. R. T. and
Roberts appraisal of s623. 665 was pre-
sented to show that the proposed
purchase price was we'll below the
estimated value. Sager declared the
value to be nearly 100000 less than
the estimate made by Roberts.
Methods Under Fire.
Throughout the session, methods
employed by the New York consultant
in his calculations were under attack
by Hinman D. Folsom, commission
counsel, and by Peoples Counsel Will
liam A. Roberts. At times, Commits
sion Vice Chairman Richmond B.
| Keech interposed questions.
The witness at one time admitted
| to Folsom he did not have actual fig
ures to support some of his claims Of
what should be allowed IS overheads
and going value.
Folsom repeatedly asked Roberts
what net earnings in the past expert
ence OF the w. r. T. the witness had
used in forecasting future increase in
business and revenues. Roberts finally
turned to exhibits to show the COM
pany had made net earnings of S7,l21
in 1884 and of S42,744 in 1885.
Folsom apparently was striking at
the point the bus concern prior to
1884 had for years made no net
| profits.
Reproduction Cost Rated S1,0ss,732.
The debate revolved around an
exhibit prepared by Roberts intending
TO show the reproduction cost of the
ous concern would be S1,059,732, with
out allowing for depreciation of equip
ment and properties. On deprecated
basis he figured the value to be $685.
665.
The reproduction cost of physical
properties, he said, was $3.50 1922. to
which he added 20 per cent, or S17o.-
O64, for overhead expenses and go
Ing value" He argued that in some
cases he had studied allowances of
from to % per cent were made for
such intangible values.
On a deprecated basis Roberts fig
ured the value of physical properties
to be S4l4,254, to which he added
s39,346 for working capital" and
then with the Intangible items
brought the total present value to
$623,665.
Peoples Counsel Roberts and Fol-
som both referred several times to
the fact many of the fleet of 70
busses of the company are old and
must be replaced. The witness
previously had estimated the COM
pany must replace 81 of these within
about four years.
The witness insisted, however. the
question of how soon old busses must
be replaced would not affect his
Judgment on the value New buses,
he argued, would serve to increase
the business of the concern.
Rules Tags Unnecessary.
Capital Transit offlcels today were
informed unoficially the Maryland
attorney general had ruled the COM
pany busses could traverse Chevy
Chase Circle on the Maryland side,
without buying Maryland tags, so
long as the busses did not stop on
that side.
William B. Bennett, assistant to
Company President John H. Hanna,
said he did not know yet whether this
would mean the buses would be run
around the circle instead of making a
short turn on the District side. He
said to make the change would cause
busses to run considerable additional
miles over a period of time.
He suggested the matter may turn
on the question of whether the COM
pany can establish an off-street term
nal for the busses somewhere near the
circle.
At the same time, Bennett an
nounced that operation of some of the
Connecticut avenue buses over CAL
vert Bridge and down Eighteenth
street to I street would be started
Sunday. He said the final schedules
had not yet been completed. The
remainder of the Connecticut avenue
busses will continue to travel over