Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-02-21
HEARING ON W.R. 7.
MERGER IS ENDED.
RULING IS DELAYED.
Mass of Testimony Offered
to Show $685. 23 for
Lines Excessive.
ATTORNEYS ALLOWED
/ 10 DAYS FOR BRIEFS
Estimates of Valuation Differ
Widely Saunders Holds
$4,000 Price Is Limit.
BY DON S. WARREN.

BY DUN >. WARREN.
Public hearings before the PUBLIC
Utilities Commission on the proposal
of the Capital Transit Co. to pay
$539.623 for the Washington Rapid
Transit Co. was concluded shortly
after noon today, with the record
showing mass of testimony by COM
mission witnesses that the proposed
purchase price is too high.
The commission reserved decision,
allowing attorneys for the two COM
panies, as well as Peoples Counsel
William A. Roberts and Commission
Counsel Human D. Folsom, 10 days in
which to file briefs if they wish to
do so.
The commission did not indicate
what it's decision would be.
Estimates Differ Widely.
A variety of estimates of value were
laid before the body at its three-day
sessions. In support of its proposed
purchase price, which includes pur-
chase of note owed by the w. R. T.
to the North American Co., for $327,-
253, the Capital Transit Co. submitted
an appraisal of $623,665. This was
countered by commission witnesses.
Commission Chief Accountant Byars
NICK. Bachman said the net worth was
$300,246. Commission Chief Engineer
Fred a. Sager said the reproduction
value, less depreciation, was S325,336.
At this mornings session, commits
sion consultant. Henry ]. Saunders,
advised the commission no purchasers
would be justified in paying more than
$4,000.
Saunders submitted exhibits to show
that only the sum of $4,000 in cash
actually had been placed in the bus
concern by its investors. Records show
the book cost of properties total $780,
2lo. but Saunders found that $40, 600
OF this sum came out Of passenger
revenues
The Capital Transit Co. and the
Washington Rapid Transit Co. have
aEesc The total price should be
SsjJ So Or nearly 100000 more than
Sanders said any purchaser would be
!E-saEtsc u pairing. Both concerns are
lz15e- the financial control of the
N1E1h American Co, utilities holding
cr.rrcrz.fc-
Merrill Gives Statement.
A-G.as- important development this
morning vas q statement by E. D.
ME-- president Of the W. R. T. that
T1Els os believed the stock of the bus
ccEcs-- TO De worth considerably
EEs" than rhe $40 par which is pro-
prseo 20 De paid. he did not know how
EIca more.
Saunders said sS5 900 worth of stock
Il toe ". r. T. should be disallowed
as an element of value because the
company received no cash for that
amount of stock. OF the sum, $4,000
worth Of stock was issued in the early
days Of the company to w. E. Reed
"tn full payment for his franchise to
operate passenger motor buses within
the District and elsewhere" and $25 900
worth was bonus stock authorized to
compensate certain persons for raising
100000 in cash for use of the COM
pany."
A company witness, Edward Roberts,
had appraised the value of the w. r. T.
at 1923, 1865, to support the proposed
purchase price. consisting of $212,370
for the majority of the stock and
s327,253 to pay for note owed by the
w. r. T. to the North American Co.
During debate about the par value
Of the stock this morning, G. Thomas
Dunlop. Capital Transit attorney, in
sisted that the president of the w. r.
T. be allowed to state his opinion of
the present value of the stock. At
$40 par, the price for the stock would
be $4,000.
Folsom Grills Merrill.
When Merrill said he thought it was
worth considerably more, Folsom
promptly started a grilling.
would 1t be worth three times par?"
he asked.
ut might be to some purchaser. I
couldn't give that much"
eff you had the cash, would your"
asked Folsom.
That might depend on other in
vestments," Merrill said.
well, how about two and half
times?" Folsom persisted. Figuring
showed two and half times would
make the price $4,000, or approx
mately what the Capital Transit pro-
poses to pay for the stock and the
North American note.
Dunlop then argued there was no
basis for the question since the note
also was involved. Folsom responded
that in buying the note the street car
company was proposing to meet that
obligation while getting in return the
stock in concern In which the note
had been cleared.
Commission Vice Chairman Rich
mond B. Keech closed the debate with
the declaration: ''Mr. Merrill said he
thought the stock was worth more
than $40 par, but has said he did not