Evening star. [volume] (Washington, D.C.) 1854-1972, 1951-09-25
Plea 10 Consider
Initiation Voiced
By Transit Man
Company Controller
Finishes Presenting
Case for Raising Fare

Capital Transit Co. today asked
the Public Utilities Commission to
recognize that the dollar isn't
what it used to be when it figures
a fair rate of return for the COM
pany.
This plea to consider the infla-
ton factor was made by the tram
sit company's final witness,
Robert E. Harvey, vice president
and controller, as he concluded
the companys case for an increase
lin street car and bus fares.
The transit company is seeking
elimination of tokens, now sold
three for 40 cents, and an increase
in the price of the weekly pass
from So to $2.25. The straight
Is cent cash fare would be re-
tanned.
Calls for 10 Per Cent Return.
Mr.. Harvey testified that the
transit company needs and should
get a 10 per cent return to provide
service, attract cap
ital, pay adequate dividends to
investors and generally stabilize
the concern.
He said the weighted rate
base set up by the PUG should
take the infiationary trend into
consideration.
The weighted rate base-With-
out going into the many ramif1ca-
ltions involved in establishing it
is the evaluation placed by the
PUG on transit company property
used and useful" merely for the
, purpose of setting rates. The PUG
must allow the company a "rea-
sonable return" on fair value.
which fair value is the rate base.
Based on 55-Cent Dollar.
!, Mr.. Harvey said the weighted
rate base for District operations
! of the company would be an esti-
y mated $23.5 million during the
q coming year, but that if the in
hation factor was applied, the
f base would be about $42.3 million.
e He explained that in making his
estimates he was using a 55-cent
r dollar, in contrast to the 100-cent
h dollar of the 1853 period. This
v period is the base point from
5 which the Labor Department call
s culates it's consumer price index
PUG Chairman James H. Flan-
: agan commented that the commits
d sion had no particular interest in
e the conjectures about the effect Of
IS imitation. but allowed Mr.. Harvey
Ie to present his argument.
Earlier Value Noted.
q Can you also prove that thu
1889 dollar was l00-cent dollar?'
he asked.
y PUG Counsel Lloyd B. Harrison
= warned Mr.. Harvey that when h
;, was cross-examined later hi
- should be prepared to relate every
dollar involved in the rate base II
:, the 1935-1939 dollar. He observed
= that much of the evaluated prop
= erty in the rate base was from
: a period before that, when the
- value of the dollar was different.
Il In other testimony, Mr.. Harvey
s declared that without the fare in
i crease, the company's return fol
9 the IL months ending June 80
1852, on its District operation!
would be only 4.6 per cent. With
the fare increase, the return woulc
be 7.35 per cent, he said.
The PUG in 1945 held that T.:
per cent was not an unreasonable
return for the company and latel
t, indicated 6.5 per cent to be rea'
IS sonable. 1t has not fixed, as such
s a definite rate of return.
% After Mr.. Harvey finished, thu
n hearing was recessed until 10 am
s. October to give the PUG and in
1t tervenors chance to study thu
transit company's exhibits. Tit
lie company officials will be cross
ID examined at that time.
lie j. E. Heberle, retired vice presi'
J. dent and controller of the com
lie pany, told the commission yester
s. day the company's fare boost pur
ar posal should bring in a 81, 342 So
ar annual revenue increase, accord
ing to his calculations.