Evening Star Newspaper, December 1, 1927, Page 5

UNLIMITED 1-MAN CARS ARE FAVORED Universal Transfers Are Also Included in Hansel Merger Plan. (Continued from First Page) effective service, an eight-hour day and a six-day work week; the right of employes,in “addition to agreed-upon rates of compensation, to participate in net revenue gains arising from co- operation with the management, pro- Vided the share received by employes is invested in the securities of the corporation and held and voted col- lectively by trustees elected by them® and the right to arbitration of any difference as to rates of pay and work ing conditions. Referring to the values, report pointed out that those established by | the courts as a basis for rate-makin purpbses are inapplicable as a bas for sale or exchange and that the final determinate of capital value of a transit entity in the terms of sale ange is its income producin qualities. “It is obvious that, all else being equal,” the report said in this connec- tion,” the value of a going property measured by its ability to earn is the capitalized net operating income, or in other words, the capitalizati net operating income on the of the golng price for money irrespec- tive of the investment or of the cost of production. Routing Plan Offered. “The inexorable economic the ‘value’ of a transit entity is, fore, that aithough value e great the cost 'of plant and cost of operation may be small. and, re versely, value may be small, although | the cost be great. | “It is axiomatic with respeet to merged transit entities that the value | of the merger company is usually greater than the sum of its merged | parts, frrespective of whether such value is measured for the owner or for the public. The reasonablene: of the division of this added incre ment between the interested parties determines ultimately the possibility and advisability of a mergel Discussing the operation transportation units under unification, the report stressed the importance of | routing of car and bus lines and offered a routing pian which the firm | believes would give a satisfactory | scrvice at a justifiable cost and at | the same time show proper recogni tion for the need of an orderly ar- rangement in the city center so as to avoid congestion or to reduce it to a minimum. The routing plan developed provides a system®of 14 routes, only 4 of which are through | routes—two_operating east and west | and the other two operating north and south. The principal points of the sug- gested routing systems as affecting the traffic in the central business district are: The present complicated and con- gested movements at Fifteenth street and New York avenue have been eliminated and simplified to one turn- ing movement between Pennsylvania avenue and Fifteenth street; all street car traffic has been removed from New York avenue between Eleventh and Fifteenth streets, new routes have been laid on Twelfth and Thir- teenth streets between E and H streets and all street car service has been removed from F street between Eleventh and Fourteenth streets. Through Routes. The through routes north and south, | cross the central business district, on | Beventh and on Fourteenth streets, and the two through routes from east and west operate on C street and Pennsylvania avenue. The other routes operating into the city center are looped back on four loops as follows: Thirteenth street loop, formed by Twelfth, Thirteenth, H and E streets; Lleventh street loop, formed by Ninth, ¥leventh, E and K streets or New York avenue; G street loop, formed by ¥, G, Ninth and 11th streets. Very little change was made in the general plan of the motor bus routes, but they have been consolidated so that as a result fewer streets are oc- cupied by busses than heretofore. The major changes have been the exten- sion of the South Washington bus line to the intersection of Fourteenth and Water streets southwest and the es- tablishment of a new cross-town serv- ice on P street between Dupont Cir- cle and First street and Florida ave- | nue northeast. The Burleith bus line | has been eliminated. It also is plan- ned ro route the Chevy Chase de.luxe | service and the new Cleveland Park | de luxe service directly south on Con- | necticut avenue from the bridge, in-| stead of detouring by way of Seven teenth and Eighteenth streets. The Massachusetts avenue route has been extended southwardly from Dupont | Circle to Potomac Park. Reduction in Expenses. One of the most important items in the consideration of the advantages of unification, the report declared, is the reduction in operating expenses which may accrue to the operating company. “It is readily apparent that many economies may be effected,” it said. “but in many eases they are Mmore apparent than real, and it is our opinion that the tendency has been rather to exaggerate them than to overiook them.” In advocating general use of one- man cars, the report said that the re- sultant saving, estimated at $900,000, 1s 80 large and so important that it cannot be lightly passed over. “The principal objection to one-man ear operations.” the report declared, to arise from the fact that the mind has become imbued with the thought that one-man cars indi- cate a ‘one-horse-town.” That such a tement cannot be supported by facts is most evident when we realize the extent to which one-man cars are being operated throughout the United Rtates. Two hundred and two street nourishing corBY:s MOTHER’S BREAD eAsk Your Grocer About It of the T railway companies are operating one- man cars exclusively and are using a total of 8,743 cars. Two hundred and sixty-six companies supplement their | two-man car operations with one-man | cars and are operating a total of 12, | 608, and, all told, there are 468 com- anies in the United States operating ,351 one-man cars. Every one of our |large cities has extensive operations { jof this character and many of the| | most important ones may be cited as | ! operating one-man cars exclusively. | he general statement can be made that we can see no reason why | | modern, efficient, and safe one-man cars may not be operated upon all | street railway lines in the city of | Washington and that their operation | wiil supply good service in every way the equal of that supplied by the two- iman operation and in many cases superior; that the additional man is not justified by necessities; that his compensation constitutes an econo- mic waste, but if the citizens do not | desire the operation of such equip ment and feel that their city is de- preciated by its use, they should be |entirely excluded, but the citizens | should” understand that to obtain th | service of two-man cars it will caus | pe decided increase in ¢ ‘ fare: A section of the report devoted to ements affecting valuation for of the transporiation com- xplained that the situation in regard to the W. R. & L. I much beclouded by reasqn of its asso- | ciation_with an ownership of the Po | tomac Electric Power Co. *“‘Considera- | tion of this ownership brought to light | the fact that the only reason that the | company has been able to continue its | corporate existence and pay its divi- | dends,” the report declared, “is be- { cause of the liberal contribution made |to it through the earnings of the Po- | tomae Electric Power Co., whose stock 1it owns, and not through any earnings | brought about from street railway | operations. | “Under present-day methods of | regulation, it is decidedly in the public | interest that there be a complete divorcement of power and railway wanies. While the car rider has benefited to an extent by the 2 of the railway company | | by the power company. it questionable whether the power u has been so benefited. There is no | r n why power company investors | hould be deprived of their return in rder to help the car rider. “Recognizing these facts, one of the fundamentals of any plan should be | the complete separation of the power company from the railway company. Capital Traction’s Position. “The Capital Traction Co., however, is in a vastly different condition and its book records are unhampered by B s and counter charges. Thi ny is able and has been able for 1 period of years to earn a 7 pe dividend upon its outstanding capital stock, and the fact that in the last two vears it failed to earn the full amount by a sum of $40,000 is not a matter for great consideration, but merely an indication that it is receding from its exceptionable position in the trans scheme of this community.” The general basis of a merger agree. lm nt, as outlined in the report, fol- o “In any plan of merger we recom- mend the community and the compan:; should agree for a term of 50 that the operaticn of the transporta- tion lines should be conducted along the plan hereinafter described, and it is the hope that this agreement will remove all cause jor litigation and that henceforth all parties will ear- nestly strive for the success of the un- dertaking. Thecompany to agrée not to sue for nor attempt to obtain the valuation to which, from recent court decisions, it is wnanifestly entitled, viz,, $61,000,090, but will negotiate to determine not a valuation, but a rate base for the purpos> of this agree- ment, the community, after having agreed o the establishment of a rate base, to agree that such rate hase will continue through the life of the con- tract. ““The community to agree that com- petition with the company, whether by rail lines, motor bus lines, or by other means of transportation, shall not be permitted; and to effect this agree- ment and still guard the community against the possibility of being de- prived of additiohal service which might be both necessary and con- venient the company should be given a sixmonth option on any franchise which it is proposer to grant. If, in such an event, however, the company declines to accept the franchise and exercise its privilege under this option, then the community to be at liberty to grant the franchise to any other party which is willing to accept it at the same terms as it was available to this company. The company also to agree that as new capital becomes | necessary the rate base shall be in- creased only by a sum sufficient to pay the charges on the new capital, and, on the other hand, the commun- ity to agree that such additions to th rate base are proper. Having reach- ed this agreement, both parties agree that the standard of service to be rendered in the future shall be in ac- cordance with the standard promul. gated by the Public Utilities in their | ord . 188, as amended by their | order No. 4 | Provides For Reserve, “These regulations are sufficiently | stringent and yet flexible enough to ure a satisfactory service and ob- viate that additional expense which so | often occurs in agreements of this kind, which provides for the setting | up of a separate board which must deal with these matters and from time to time determine the service. Furthermore, it does not destroy the company’s initiative and interest in supplying service of a proper quality | in the most economical manner. It | is not generally recognized that in supplying such service a considerable amount of ingenuity may be exer- cised, with surprising resuits, in the elimination of waste and unnecessary expenditures.” According to further details of the merger plan, the consolidated com- pany should agree to appropriate from its surplus a surplus reserve fund of £1,000,000 which would be placed in the custody and under the control of the Public Utilities Commission. All excess net income of the company | ibove the asreed return would be paid is fund and when it 1 of $1,500,000 the street wr fare would be reduced. If, how- ever, the earnings of the company are inot sufficient to pay the operating expenses and the agreed re | [the e | purcha especially THE EVENING STAR, WASHINGTON, turn, then the company would call on the Public Utilities Commission to supply the Geficit from the surplus re- serve fund. When and if ihe surplus reserve fund became diminished to $500,000, ths fare would ihen be in- creased, following the same procedure as proposed for the decrease. “The outstanding objection to most contracts such as this we are discuss ing and to the theory of regulation in itself based upon determined value” continued the report, “is that the company having its value determined and its rate of fare limited is without incentive to establish economical methods of operation or to employ the | greatest ingenuity of the management | economical and | toward a successful, efficient operation of the company. 1t is therefore proposed that a base re- turn be allowed upon the rate base and that the surplus res the net income up to thi wise, there shall be no additions to the surplus reserve fund from the net in come of the property unless and ex cept as it shall excced 2 per cent in addition to the base return. Would Divide Return. “It is recommended that as the net | exceed the base return and up to the total of 2 per cent this surplus shall be divided equally be- tween the compan nd the District of Columbia, the division to be as fol- lows: District of Columbia, 1 per cent; management of the company, one-half of 1 per cent, and employes of the company, one-half of 1 per cent. “The share of the District of Co- lumbia, or the public, shall be de posited annually to the credit of three public trust fund commissioners, com- posed of the prestdent of the company, the chairman of the board of Comm sioners of the District of Columbia and the chairman of the Public Utili- ties Commission of the District of Co lumbia. These trustees of the public shall establish a trust fund and use all cash and accruals, (1) in the pur- chase of common stock of the com- pany to the amount of 335 per cent of the par value of the total amount outstanding: and (2) in the purchase of the preferred stock and mortgaged in debtedness of the company. “The company to execute an option to the District of Columbia giving the right to purchase after due notice not exceed 331 per cent of the common and any part of the preferred stock of the company at any dividend period at a price for either, of $110 per share. “A company to issue its common and preferred stock under the condi- tion that any part of it, may be called atter due notice at any dividend period at a price of $110 per share.” Would Take Over Taxis. The report recommends that the consolidated company after unification is complete and operation has started under this contract take steps im- mediately to acquire all other trans- portation agencies in the District, in- cluding taxicabs, sight-seeing busses, suburban and interurban bus lines and interurban railway companies. These companies, the report said, should be acquired at a fair price, which would be approved by the Public Utilities Commission. In the case of the suburban lines, which are operating interstate, and without author and under the ju- income may risdietion of no commission, should it become evident that the company cannbt be acquired at a fair pri then the merger company, the report explains, should immediately proceed to set up a competitive operation in the interests of the public. The cost of these lines would be added to the rate base and their entire earnines and expenses would be included under the merger contract. Advantages Explained. “The advantages of having a com- plete and co-ordinated system are numerous,” the report said, “in thal the parking and operation of the large sight-seeing busses, which is now such a great traffic problem, could be more casily and readily solved in a co- ordinated company and similar man- ner, but in a lesser degree the same stafement is true of the taxicab operations. It will also simplify and facilitate regulation in general. There have been no estimates made as to the cost of acquisition nor operating results of these various auxiliary operations; since it is manifestly im- possible within the short space of time at our disposal to gather the complete statistics and nec y _records of these many companies and individuals which are nect for a correct appraisement and estimates In the merging of the transit prop- erties the Hansel firm found that if the rerouting, as it suggested, be- comes effective and if the rolling stock is replaced now approximately $8,437,000 of the present proper vepresented by trac special wor miscellaneous items and equipment will ultimately be abandoned. The ent inv t in physical prop- | it facilities shown in |its” report is $52,241,025. The esti- mated additions to the property be- 1se of replacement of rolling stock, he building of new track and special work is estimated at $7,100,000, which, added to .the present investment, would make a total investment of 1$59,341,025. “If the investment was rewritten | as of date when these additions and | deductions were made,” the report | added, “the net book investment In | physical property, called road and | cquipment, would be £50,904 cluding the financing, incorpor | etc., but not including any working pital. This would indicate the | cost of progress, as illusirated by the | improved facilities considered as a whole, at $8,437,000. Cost of Progress. | “However, no company, under ex- sting conditions, could be expected to undertake the whole burden of this cost of progress. These companies or a merged company would not, without substantial concessions on thie part of the community, have the earn- ing power to earn on such a rate base, but it is believed that a rate base agreeable to both parties can be negotiated if the interested parties meet with open minds, agreeable to consideration of the rights of each other. “While it is reasonable to assume that the gross revenue under the pres- ent fare will be increased as soon as the unified plan is in full operation, even though the car rider is given more extended and complete service under rerouting and rearrangement of tracks and pays no transfer charge, we have not considered any such Interest of a Friend is united with the experience ahd facilities of a strong, old-established bank in Union Trust Company fiduciary service. Your heirs enjoy sympathetic consideration; your estate benefits by thoroughly business- like management. We will be glad to answer your questions about vur service as Executor and Trustee. You will in no way be obligated. UNION TRUST COMPANY OF THE DISTRICT OF coLumelA A X N[ Sid STARTING AT— MY SOOI AR NNK XXX Successful ney West (INCORPORATED) 14th & G Streets N, W. Men Select THE SAXON By STEIN-BLOCH ~ Its style stands for ability and stability. The fixed firmness of lapel, short in its sweep, gives chest, and dignifies. In two or three button peak or notch lapel models; developed in light or dark mixtyres, D. C, THURSDAY. revenue increase and estimate that under the unified system with one- man cars and tax relief the net operat- ing income, based on the assumption of complete unification as hereinbe- | fore set out in detail, would be about $3,675,000. “It must be remembered that thix! estimated income cannot be enjoyed until unification has been achieved and that in the earlier period of opera- tion and until the unification is com- plete, the earnings will be less than this amount. Then, too, it should be kept constantly in mind that the operating expenses, as of December | 31, 1926, have been the basis of our | computation. Therefore we do not | give any consideration to any chang in unit costs in arriving at the: figures. Principal Object of Merger. “Even though the system he unified, | if it is operating with two-man cars | without tax relief, the earnings on a 10-cent cash fare basis would be $259, 000 less than if the present fares are continued, tax relief is granted and | one-man cars are operated. “The principle object of unification is to produce a well constituted and prosperous transportation company since it is only such a public servant that can give adequate service to the public. It has been shown that uni- fication, remission of taxes and one- | man car operation produces an earn- ing power not held by any of the con- tituent companies. It is also shown that these companies can now earn the return to which they are entitled by the law of the land, eve. at the maximum rate of fare. This report demonstrates the manner of increas- ing earning power. A meeting of minds with generous consideration to all rights involved, private, public and corporate, is necessary to fix a capi- talization and a rate base which will be fair to all concerned.” \HONOR VON STEUBEN |AT ANNIVERSARY RITE The 150th anniversary of the land- ing of Maj. Gen. Baron von Steuben at Plymouth, N. H., to aid the cause of American freedom was commemo- rated with the placing of a wreath on his statue in La Fayette Square at impressive exercises under the auspices of the Concord Club today at 10 o'clock. Gustave Bender, financial secretary of the Concord Club, eulogizing von Steuben in an address, quoted from the writings of George Bancroft, his- torian, as follows: “To the cause of our country in the time of our distress he at the sacrifice of a secure career devoted the experi- ence and skill which had been the fruit of long years of service under the greatest master of the art of war of that day. He served under our flag with indefatigable industry and a courage that shrank from no danger.” The committee in charge of the ceremony was composed of Richard Brauner, president of the club; Paul Riedel, vice president; A. C. Machler, secretary, and Mr. Bender. Dz OUR METAL INSULATED CABINET PREVENTS A cabinet cooled to 40°, containing three bottles of milk (44° stood in a hardening room at 8% to 10° below zero from 11 A.M. to 3 P.M. At that time two out of three bottles showed LEUKEMBER 1, only a slight displace- ment of cap due to freez- ing, This test showed that the milk cabinet will protect milk from freczing at a_tempera- ture of 8° to 10° below zero for about four hours. You should have one! Simply phone or write— Wise Brothers 1927. ALL OUR PRICES RE LOW! It is not so much the reduced-price weekly specials that we are proud to offer; our greatest achievement is the very low range of our regular prices, on ALL our items, day in and day out throughout the year! And the high quality never varies. Specials for the Week End FINE GRANULATED | LOOSE OR PACKAGE | PURE LARD ssss |2 Lbs 29c Fancy Florida Oranges Medim ... 290 Lage.....39c Fo2 49c¢ These Are the Best Orange Prices Offered in Town— Compare Before Buying Elsewhere SMALL LEAN CALAS Lb., 17%c Ik, 3 ca. 28¢c Cans, =\ || CAMPBELL’S BEANS 2 Cans IS¢ SUGAR CURED HAMS Lb., 21c Evaporated Mi —— SUNNYFIELD PANCAKE - FLOUR 3 Pig. 25¢ - ( SUNNYFIELD BUCKWHEAT FLOUR 3 rrgs. 25¢ | RS . White House e " Y{ Another | NEW STORE Opens Tomorrow at 1310 N. Capitol On West Side of North Capitol Near New York Avenue KARO B. L. SYRUP No. 1Y, Can, 12¢ SNOWDRIFT For making better Cakes, Biscuits, Pastry and for Frying 1-Lb. Can 220 \ Golden Crown Syrup Sm. Can, 9¢ Sultana Maple Bl. Syrup Can, 14c N.Y.STATE Sweet Apple CIDER 8 O’Clock COFFEE Lb., 33c Wilkins B’FAST COFFEE %b. 22 . 42¢ | pkg. LUCKY STRIKE | and Other Cigarettes Including Camels, Piedmonts, Chesterfields, Sweet Caporal, || '-Gal. Jug 1-Gal Jug Yorktown and Old Gold Lse. Phs. } Cart. of 10 | 32¢ 59C 12Y%c i$1.19 ]Ptu. depositon returnable SUPER SUDS|| Lge. Plg 9c Watch for the Special Coupon Giving Free One Pkg. With Each One Purchased Redeemable in All Our Stores Special Until Sat. Night LUX TOILET SOAP 2 Cakes 1 5c Gt . ) . Special Until Sat. Night RINSO For a Whiter Wash No Scrubbing or Boiling Lge. Pkg. 2 zc WILDMERE Fancy Selected EGGS Every Egg Guaranteed in 34-Lb. Prints Cart L 59¢ of 1 Doz, 44€ Ffresh Fruits and Pegetables Sweet Potatoes. . . .. ...5 lbs., 12¢c | Crisp Celery........: .bunch, 10c Maine Potatoes. ... . ... .5 lbs., 13c | Iceberg Lettuce. . ..... . head, 11c Yellow Onions. ........31bs., 10c | Late Howe Cranberries. . . .lb., 22¢ Cabbage. ................Ib, 2¢c | Fancy Box Apples. . ... .3 lbs., 25¢ Fresh Spinach. . ..........Lb.,9¢c | GrapeFruit............each,10c Friday & Saturday Meat Market Specials PRIME RIB \\‘f LEAN ) ( LOIN OR RIB FANCY CREAMERY BUTTER Wonderful Mellow Flavor Lb, 52C 4 A Decidedly Better BUTTER e Roast of Beef || Fresh Hams Pork Roast 1. 29c )\ _1.23c i1 25¢ | Shoulder Lamb Roast, 1b. .29¢ | Phila. Scrapple, @b. ..........18 Fr. Ground Beef, Ib. . . .......23c | Taylor’s Pork Roll, Ib. .......55¢c Loffler’s Skinless Franks. .Lb., 35c | Fr. Sausage Meat, Ib. . .......35¢ Lean Strip Bacon, 1b. . .......25¢ | Green Link Sausage, 1b. . . ....35¢ 'Sliced B’fast Bacon, Y, Ib. ...20c | New Pack Sauerkraut, 2 lbs.12V;c FRESH FISH & OYSTERS King Fish, Ib. . ........15¢c | Croakers,Ib. . . ........15¢c Sliced Halibut, Ib. . . . .. .35¢c | Pan Rock, Ib. . ........30c Fillet of Haddock, Ib .....22c | White Perch, Ib. . . .. ...18¢c Salt Water Oysters, pint 35¢; quart, 65¢