Evening star., 1938-09-20


of value and al ::$$$:$
lowed insufficient
amounts for other - -
elements and will u
file at the proper
time our objection to the value
stated by the commission" declared
President Merrill in the August issue
of Transit Lines, company publica-
ton.
The Public Utilities Commission OF
the District of Columbia, after ex-
tended hearings. which were completed
more than a year ago, has stated that
the value of the property Of the Capital
Transit Co. used and useful in the
service of the public within the Dis
trict of Columbia. as of December 81,
1885, was $24,000000.
Points to Additions.
This, of course, does not represent
the full value of the property owned
by the company for several reasons
There have been added to the property
since December 81, 1885, many items of
property-new street cars, new buses
new tracks replacing old tracks. addi-
tional land and buildings. and addi-
tional machinery and tools, costing
more than S6,000,0o0.
According to our estimates the pres
ent value (cost of reproduction less de-
preciation) of property in Maryland,
including Glen Echo Park, amounts to
An additional $l.750,000; other prop
erty owned by the company but not
used in transportation service amounts
to nearly Sl,50O,000: cash and other
current assets, less current liabilities,
amounts allowed by the commission,
amount to some s700,OO0 The total
Of these various items. plus the S24,-
100000 mentioned by the commission,
amounts to more than S34,000,0o0.
Earnings Fall Short.
"A business with keen competition
and many uncertainties must have
higher return than a more stable, GER
tain business with less risk of loss. If
We assume that per cent is a reason
able return for business presenting
the uncertainties and difficulties of
transportation operation, and using the
$24,000.000 valuation (Which we think
Is too low, the return to those who
have invested their money in the
company, which ought to be expected
from the operations within the Dis
trict of Columbia would be $l,680,000
The actual return for the investors
from the entire operations of the COM
pany, including both Maryland and
the District of Columbia, for the year
1887 was only S828,026. Nearly all of
this return, namely, s6s0,253, was nee
essary to pay to bondholders and others
who have loaned money to the COM
pany. so that only s137,773 was left
for more than 1000 stockholders who
have furnished very substantial part
OF the money necessary to provide me
property which is needed for the
operations of the company.
From the figures already given, it is
evident that even on the low valuation
proposed by the Public Utilities Com
mission, the company fell short of
earning fair return in 1887 by about
ss50,000, if we compute it on the 7
per cent basis. To the extent that
the return is less than fair return
on fair value the investors are not
being treated fairly"
Transit Shares Lower.
Activity in Capital Transit and
Washington Gas Light preferred
claimed attention on the Washington
Stock Exchange this morning.
Before the call Transit moved down
% of a point from the last previous
sale to 8ls, with Is shares, 10 and 4
changing hands.
After the call Gas Light preferred
sold at 99l2, down J.. of point from
the last previous sale. Four 10-share
lots, two 30-share lots and a 5-share
lot changed hands
Potomac Electric 512 per cent pre-
ferred moved at 1l4l4. up quarter
OF a point from the last previous sale
on 5-share transaction. Eight shares
of National Union Fire Insurance sold
at 5i2, down y point from the last
previous sale.
d. C. Accountants to Attend.
Among more than 1900 certified
public accountants from all parts of
the United States who will attend the
Slst annual meeting of the American
Institute OF Accounts at the Neither
land Plaza Hotel, in Cincinnati, from
September Is to 29 next will be the
following from the District of Colum-
bia:
William Gordon Buchanan, Colo
RADIO Building; James A. Councillor,
partner in James A. Councillor & Co.,
Tower Building; c. Vaughan Darby,
9l2 Pepco Building; Frank Glanday,
1900 E street NV; Wayne Kendrick,
partner in Wayne Kendrick g. Co.;
Leland G. Sutherland. with Price,
Waterhouse & Co., 502 American Sc
eurity Building
Bank Election Planned.
The Federal Reserve Bank of Rich
mond announces that in a November
election. successors will be named for
two directors of the bank, whose terms
expire December 81, 1888 They are:
L. E. johnson of Anderson. w. Va,
class A director, and Edwin Malloy of
Cheraw, S. c., class B director.
Member banks belonging to group 3
will choose successor to Mr.
johnson, while those in group will
name a successor to Mr.. Malloy Each
bank is entitled to nominate one can
didate. Nominations must be made
by resolution of the various bank
boards and certified on or before Octo-
ber "a. On october 81 list of can
didates will be sent to the banks.
Polls will open November and close
at 2 pm. November Is.
Two Washington banks will have
voice in the group election: The
Columbia National and the Nationa