Evening star., 1938-08-31
$24,0OQ,0DO SET
AS VALUATION Of
CAPITAL TRANSIT
Surprisingly Low Figure
CIimaxes Struggle of
Eight Years.
$53, 600, 900 WAS CLAIM
MADE BY THE COMPANY
Long-Awaited Decision Is Not
Expected to Have Any Effect
on Fares at Present.
BY DON S. WARREN.

Properties of the Capital Transit
Co., used and useful for transportation
IN the District. were valued today bv
the Public Utilities Commission at
S24 900 000-less than half the sum
Claimed by the company as the proper
base for consideration of its fares or
rate of return.
Inc order was issued as a climax to
struggle of eight years to arrive at
the fair value of the transit properties.
Inc valuation proceedings were started
oacK IN 1880, prior to the consolida-
ton OF the Washington Railway e.
Electric Co., the Capital Traction Co,
and the Washington Rapid Transit Co.
Inc merger of the electric lines took
e1fct December l, 1888, and the w. r,
/. was bought on January II. 1886.
Ihe commission found that the
properties of the merged companies
were appreciated to an extent of a.
per cent, or by s15.746,e39, from an
appraisal OF what it would cost to re-
produce the transit properties, not
counting land or working capital.
The iong-aWaited decision is expect.
ed TO have no effect at this time on
fares of the transit company since the
net return being received by the COM
pany, by almost any method of figur-
ing, is far below per cent-the lowest
rate to which the commission has held
any OF the utilities under its control.
Fares OF the company were increased
during the last year from a token rate
OF four for 80 cents to six for so cents,
When uniform fares and universal free
transfers were ordered into effect.
The value fixed by the commission
was taken as of the date of December
81, 1885. To this S24,O00.0OO figure.
OF course, would be added sums repre-
senting the value of any property,
rails. street cars, buses or other equip
ment added since that time. in any
computation to bring the value cur
rent!y up to date.
Value Startingly Low.
The value found by the commission
for the merged company was startling
ly low in view of the claims made by
the company and previous values
found by previous commission MEM
bers and in one case by the District
Court.
The company claimed that the "ir-
reducible" value was no less than
53.6O0,OOO
In 1919 the Public Utilities Commits
sion. making an original valuation of
the then two street car companies,
|, ,o1, -
Railway & Electric Co. to be sl6.l06.-
1868 and that of the Capital Traction
Co. s14270,495. making a total for
the two of s3O,376, 1868.
In 1924 an issue arose between the
commission and the Capital Traction
Co. over its value in a rate case and
it was carried to the court. which de.
clded that the value of the traction
company was $30,9O6,SSO. The court
made no finding as to depreciation
since the traction company MAIN
talned sinking fund.
The commissions decisions also
recalls that some years ago during
agitation for merger of the two street
car companies. company spokesmen
demanded that the agreement to be
considered by Congress carry a state
ment that the value of the merged
properties was some $50,000 900. The
merger plan underwent many changes
and any statement as to the value
OF the merged property was elm
mated from the enabling act passed
by Congress. This left the decision
as to value in the hands Of the
Public Utilities Commission.
1888 Income Was s414,S23.
Records of the commission show
| that the merged company had a net
| income of $414,823 in the year 1885,
the date for Wh1Chs the commission
now has fixed final value. Taking
the commissions finding that the
value then was S24,000,0O0, the net
income amounted to 131 per cent.
Calculation shows that the company
would have had to receive a net in
come OF $l,44O,000 to bring its rate
OF return up to 6 per cent.
The company finding was stated in
an order running so pages in length
in detail the huge mass of evidence
and argument submitted by agents
OF the company and the commits
sion and by spokesmen for civic groups
at the formal hearing, which was held
in the spring of 1887.
AS usual, the commission followed
several different valuation methods
in arriving at its $24,OOO,OO0 figure.
1t considered the historical costs but
found this none too dependable, be-
cause many of the old records as to
actual prices paid for transportation
properties were missing In this con-
nection is considered what was called
book costs. 1t also considered the
(See VALUATION, Page A-53