Evening star., 1950-04-05
Capital Transit
Puts Rate Base
AtS43,764,571.
Tops PUG Figure
By SIG Million in
Asking Higher Fores

Asking Higher Fores
The Capital Transit Co. con-
tended todaX that its rate base
should be s43,764.57l or about
SIG million more than the fisure
set by the Public Utilities Com
mission.
This argument was advanced in
the hearing before the PUG on
the companys application for
higher fares. The rate base is
the valuation of property used III
transit operations.
The commission has ruled Nst
the company is entitled to a,
per cent return on its rate baSt
This would be S3.2S2,324 on the
company'S figures. The COM
pany's operating income In la49
was S574.664
Two Ways Of Figuring.
j. E, Heberle, vice president and
controller of the company testi-
fed that under the company's
proposed higher fare schedule it
would earn return of Sl.959.S79.
He" said this would be a return
of As per cent on the rate base
as figured by the company and
IL per cent on the rate base as
set by the commission.
The company is asking for these
fares: IS cents cash, six tokens
for 80 cents and elimination OF
the weekly pass. Present fares
are l3 cents cash. three tokens for
IS cents and Sits for the weekly
pass
Mr.. Heberle arrived at his rate
base figure in this way:
He started with the historical
cost of property, as does the PUG.
He used figure OF $4.267.989 as
the present value of land. includ-
Ing right Of way. instead OF the
original cost figure of $l.236.536.
In the l948 rate case. when pres
ent fares were set. the commission
refused to allow this.
Adds $3.50. 900.
He added $3.50. 900. which rep
resentS the remaining balance Of
the excess of purchase price over
cost in an 1895 deal by
the Old Rock Greek Railroad Co.
Capital Transit contends this was
largely responsible for the Con-
necticut avenue development north
of Calvert Bridge.
The commission in the past has
refused to allow this sum-.
Mr.. Heberle also contended that
the historical cost of property
figure should not be reduced by
l9,980,6l0 in accrued deprecia- =
ton. but by a figure $7,770.079
less. for that sum was not earned
with 7l2 per cent return.
In another aspect of the claim
for higher earnings. Mr.. Heberle
contended that the company
should earn 10 per cent on tho
total invested capital of $32,863,-
LOG. which would be $3,286.3l0.
He said this is necessary to give
investors confidence in the COM
pany. attract capital and main
tain the companys credit.
The company's presentation OF
its case began yesterday afternoon
and may continue into tomorrow.
A recess may follow for study Of
the exhibits and testimony.
Mr.. Heberle testified yesterday
that:
/. The company can no longer
afford to sell weekly pass.
Plans Cut in Service.
2. 1t plans a Sc per cent de-
crease in service in the year end
ing next February 28. compared
with the last six months of l949.
with an attendant decrease In the
OF bus and streetcar
operators.
3. The company has been fur.
service for the last nine
months at less than cost.
Some of Mr.. Heberles testi-
mony was. in effect. a reply to the
of witnesses preceding
him, who pleaded for retention Of
the weekly pass.
He presented figures to show
hat the sale of the pass had
declined from an average of 2l4,-
'7l a week in March. l947 to
,0,762 week last February. The
average number of rides per pass
las increased from 80 in l945,
ne said. to 347 in l949.
Cites Revenue Ratio.
In 1945, he said also. the in
'ome from weekly pass sales was
more than from regular fares,
while last year the total from
'egular fares was sl7.216,753. as
against s8,959.834 from passes.
In my judgment" he said. the
major part of the remaining pass
purchasers are volume users, who
ire not paying their proper pro-
portion OF the costs OF service"
He said he believes the use Of
automobiles is responsible to a
arge extent for the company's
raftic decline. He gave a chart
m which 1946 figures were given
IN index number OF 100. On this
,asis, revenue passengers in the
District dropped to 75.4 in 1949.
automobile registrations increased
o 1896 and gasoline sales TO 1893.