Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-03-20
Pepco RATE War
To Be Resumed
On Monday
Exchange by Counsel
Nearly Flares Into
Physical Violence
BY DON S. WARREN.

table-will be resumed at 10 am.
Monday.
An adjournment over the week
end was ordered by James H. Flana-
gan, chairman of the Public Utilities
Commission, at the end of full day
featured by many legal maneuvers,
pickering, and challenging and
counterchallenging of mathemati-
cal calculations and taking of ex-
ceptions of rulings on admissibinty
OF proffered exhibits.
Fisticuffs almost developed be-
tween A. j. Swanick, of counsel for
the Treasury Procurement Division,
and Lloyd B. Harrison, an assistant
corporation counsel before the PUG,
after yesterdays session ended, fol-
lowing an exchange of epithets be-
tween the two, who have been seated
side by side at the counsel table
each day.
Resume Row Outside.
Frequent quarrels had developed
between them throughout the case,
IN private exchanges that didn't get
into the'record, as Mr.. Swanick con-
stantly prodded Mr.. Harrison about
progress of the case, with Mr.. Har-
rison responding Gin kind"
AS the crowd of lawyers and others
went out of the hearing room after
yesterdays session, the pickering be-
tween Mr.. Swanick and Mr.. Harrison
was resumed and reporters heard
the latter say in response to some
verbal thrust from Mr.. Swanick: IF
you had any brains you wouldn't use
your tongue so much"
This led to more serious argument,
with Mr.. Swanick declaring he
wouldn't stand" for certain remarks
made by Mr.. Harrison, but adding
that Mr.. Harrison was protected
by his gray hair
BY that time the two were sur
rounded by many others. Chairman
Flanagan, coming by to hear only a
challenging remark by Mr.. Swanick,
told him IT this goes on we NAV
have to exclude you from the coun-
sci table" Mr. Swanick replied that
Mr.: Harrison had INDUCED in name
calling.
Series Of Calculations,
Before all this happened, the dis
cusslon was enlagred to include
among other things, a series of new
calculations presented by David A
kosh, an OPA rate analyst, at the
request of Harry R. Booth. OPA
counsel, to show that "by figuring
backwards" rates should be reduced
by certain amounts if considerations
were given to what income tax saw
lngs the company would get under
certain rate reduction proposals. By
this process, he arrived at one figure
that rates might be reduced by as
much as 1880, 900. ..o ,,-: -
This rather startling development
led Chairman Flanagan to remark
to counsel for intervening Govern
ment agencies that: The incidental
effect OF adoption of Mr.. Kosh's pro-
posed formulas would be- to- deprive
the Treasury Department of between
roughly 100000 and $1,100,0O0 in
tax receipts which might be quite a
price to pay for departures from the
regular procedure under the sliding
scale plan"
Thurman Hill, Treasury Depart
ment representative, 8 said this
showed "just how big hearted we
are" and thereupon he announced
he adopted for the Treasury the
position taken by Mr.. Booth in the
Kosh testimony.
Kosh Offers Exhibits.
Mr.. Kosh made his calculations in
the reverse of the ordinary methods.
He started of on the premise that
II the net operating income of the
company was to be reduced by GER
tain amounts it would be necessary
to reduce consumer rate schedules
| by certain amounts.
His first exhibit was intended to
show that if excess profits net
income" was to be reduced by
$3l5, $40, the company would enjoy
Federal tax saving of $255 ,587, and
that the net cost to the company
WOuiO UC Uut 1CS,oo1.
There were three such exhibits
the last showing that If Pepco rates
were reduced by more than $780,
900, the company would enjoy a
Federal tax saving" of more than
81, Tic, 900, and that 1.-THE cost" to the
company of such a rate cut would
be only some $781 900.
In part, the testimony Of Mr.
Kosh was intended as a refutation
of earlier testimony given by v. A.
McElfresh, chief accountant of the
PUG, but later Mr.. Harrison recalled
Mr.. McElfresh to the stand and he
testified there were errors in Mr..
Kosh's calculations. Winding up
such counter arguments, Chairman
Flanagan declared his belief that
Mr.. McElfresh had been consistent
throughout"
Sharp Exchanges.
Earlier, there were sharp ex-
changes between Gregory Hankin,
PUG minority member, and counsel
for intervening Government agen-
cies, on one hand. and the company
over questions about depreciation
accounting. After S. R. Bowen and
William K. Laws. of company coun-
sci, had objected to some of Mr..
Hankin's questions, Chairman Flan-
agan said:
I'VE nave ruled out similar line
OF questioning by the Government
as improper in this case. We have
attempted to keep the minority
member of this commission within
bounds. We do not want to be
arbitrary, but we have ruled out a
similar line of questioning by counsel
for the OPA.'
Mr. Hankin argued that he asked
a different" question and, without
replying directly to Chairman Elan
agan, told Mr.. Laws: You would do
better to prepare yourself and to
read the statute under which we are
operating here"
This led to sharp exchange be-
tween Mr.. Hankin and Mr.. Laws,
during which Mr.. Hankin demanded
an answer to question to the COM
pany lawyer.