Evening star., 1938-01-13
COMMISSION ACTS
TO JUSTIFY BOOST
|NCAR TOKEN RATE
Present Charge Will Not
Give Company Fair Re-
turn, Hearing Told.
ELGEN AND KEECH CITE
MANY FACTORS IN CASE
Former Calls Attention to Esti.
mated Net Income of Trac.
= tion Line in 1897.
BY JAMES E. CHINN.

The Public Utilities Commission to-
day sought to justify It's recent action
in increasing token fares to six for so
cents on the ground that even this
rate would not give the Capital Tran
sit Co. fair return on minimum
value of s23,ooo.ooo.
Called as the first witness before
the Public Utilities Subcommittee of
the House District Committee as it
opened a long-deferred investigation
of the transit company. Riley E. FL
gen, chairman of the commission, and
Richmond B. Keech, vice chairman,
outlined the numerous factors that led
to issuance of the higher fare order.
Mr.. Elgen. however. called attention
to the company's estimated net income
of s872,787 for 1887 under the former
rate of four tokens for 80 cents. and
said If it had been applied to the
, minimum S23,000000 value the COM
J pany would have received a rate of
return of only $40 per cent.
} Says Return Not Fair.
1.-The commission he declared,
recognized that under the pronounce
ments of the courts. including the Su-
preme Court, this did not constitute a
fair return. That, gentlemen, was
the situation that faced us with respect
to the law and evidence in this case"
The committee room was jammed
with transit officials and civic leaders
at the initial session of the inyestigat-
ing subcommittee. Extra chairs were
brought in to accommodate all the
spectators.
One of the first questions asked of
Mr.. Elgen by Chairman Randolph of
the subcommittee called for an explain
alton of the unpopular fare increase
order. But at the insistence of Repre-
sentative Dirksen, Republican, of H.
llnois, who was instrumental in initi-
ating the inquiry, the questioning was
diverted to the financial structure of
the transit company, and the opera
ton of the La Toilette Anti-merger
Act. Mr.. Dirksen said he wanted
first to build up "a proper back
ground"
Figures on Corporate Set-up.
Mr.. Egen read into the record
figures showing the corporate set-up Of
the transit company and its relation
ship to the North American Co. of
New York which controls it. He also
explained that for the purpose of the
transit merger in December, 1884, Con-
gress exempted the transit properties
from application Of the La Toilette act.
Mr.. Elgen also explained that fares
must be conditioned on valuation and
pointed out that the commission is
limited in its action by court decisions.
Then," remarked Representative
Drksen, "the whole matter of fares
Is contingent on the valuation of the
commission as modified by the courts"
That's 1t, precisely" replied Mr..
Elgen.
i want to get that firmly in mind"
said Mr.. Dirksen, because there is too
much loose talk about this thing and
We want to proceed fairly"
Other Factors in Case.
Other factors which the commission
took into consideration in raising
fares, according to Mr.. Elgen, included
higher labor costs and increased taxes.
He showed the company's pay roll is
now $l,225,000 higher than it was at
the time of the merger, and that
wages are absorbing more than II
per cent of operating expenses.
Admitting the return the transit
company would earn under the higher
fare might not be as great as the
courts allow, Mr.. Dirksen declared:
I'VE have got q ceiling like that
against which we can bounce. But
there's still a tremendous limit to
which the transit company can go to
get still higher rates."
Mr.. Dirksen next questioned Mr..
Elgen about a marked decline in pas
sengers. He pointed out that 214,-
100000 were carried in 1919 and 1885,
100000 in 1882.
"You find that same trend takes place
elsewhere" said Mr.. Elgen. Its due
to private transportation and the per-
fecting OF highways. 1t is not peculiar
to the District, and may not be as
pronounced here as elsewhere"