Evening star., 1951-10-10
Initiation Plea
Backfires on
Capital Transit
OfficiuIs Admit Plan
Would Boost Rates
Above Toxicub Fares

The inflated dollar, dragged b.
Capital Transit Co. into the Pub
lie Utilities Commission fare in
crease hearing. today trapped tn,
transit company in way tina
was not contemplated.
Robert E. Harvey, vice presi
dent and controller of the com
pany. under cross examination
revised his estimates of the rat,
base on which a fair return il
calculated to more than STA mil.
lion. This is three times the pres.
ent base.
PUG Counsel Lloyd Harrison
declared:
II put no credence at all OF
your estimate of a rate base us.
ing the inflated dollar. But tt
clarity the matter, I have a few
questions to ask"
Mr.. Harrison continued, "Art
you prepared to state what the
cash fare would be if you got the
rate of return you deem reason.
able on your inflated rate base?'
Asking Specific Fare
Mr.. Harvey said he had not
made the calculation and added
the company was asking fol
specific fares.
The specific request is the elimi-
nation of tokens, now sold three
for 10 cents, and an increase in
the price of the weekly pass from
50 to $2.25.
The straight 15-cent cash-fare
would be retained.
Daryal A. Myse, transit attor-
ney, interrupted at this point and
Mr.. Harrison then demanded of
him:
Are you bold enough to ask
the PUG to fix fares on that in
fated base?"
Mr.. Myse responded that he felt
the PUG should approve the def
mite rates requested. He described
them as "a half loaf" and said
the company felt they should be
higher. He added that if the
PUG did not approve the requested
rates, its duty then was to fix
rates to accord fair return and
that the imitation factor was a
legitimate part of such q deter
mination.
Says Question Avoided.
That's not what I asked" Mr..
Harrison said. THE counsel has
refused to answer the question.
Mr.. Harrison told reporters he
had not made the calculation
either. but said use of the inflated
rate has undoubtedly would jump
bus and streetcare fares above
that of taxicabs.
Mr.. Harvey explained that he
had arrived at his STA million es-
innate of the rate base by using
the wholesale price index. This
index records the increase IN
prices ever past years Of some 800
items, 40 per cent of which are
involved in the transit company
rate base. according to Mr.. Har-
vey.
The rate base, without going
into the many ramifcations in
volved in establishing it. is the
evaluation placed by the PUG
on transit company property
FUSED and useful" merely for the
purpose of setting rates.
The PUG must allow the COM
pany reasonable return and in
the past it has indicated this to
be about SIS per cent.
Mr.. Harvey has contended a 10
per cent return would be equit-
able.
$50.4 Million Estimated.
Using the consumer price index,
MIR. Harvey estimated the rate
base would be $50.4 million. He
voiced the opinion that the higher
inflated" rate base, which he
calculated by using the whole
sale index, was more realistic.
PUG Chairman James H. Flana-
gan adjourned the hearing until
October 90, both to give the PUG
staff time to work up it's recon-
mendations and so that transit
company income figures for July,
August, September and October
would be available.
F. Gloyd Await. another transit
attorney, objected to the delay,
declaring "in the meantime Cap
ital Transit is suffering under
conf1scatory rates."