Evening Star Newspaper, December 5, 1928, Page 4

Give your scalp g treat! Don’t grow bald with irritating alcoholic shampoos! The base of Conti Shampoo is pure olive oil. It cleans, nourishes and protects. No alcohol to dry the scalp... Easy and pleas- ant to use. Rinses freely and thoroughly. CONT} CASTILE SUAP SHAMPAD 50¢ at all drug and department stores Tay Your Bills Start the Christmas Holidays with a (lean Slate $6,000 $500.00 It is not necessary to have had'an Ac- count at this Bank to Borrow. THE MORRIS PLAN BANK TUnder Supervision U. S. Treasury 1408 H STREET, N. W. DEAD LETTERS —aren’t all buried ‘in the Dead Letter Office. Many find their way to your desk daily and are thrown into the ‘waste basket. BREWOOD'S Engraved Business Stationery ~tells your story clearly —forcefully — on quality paper with a cleverly de- signed letterhead. BREO®D Business Stationery 611 12th St. N.W. Semi-Annually USE THAT CHRISTMAS SAVINGS CHECK TO OPEN AN ACCOUNT ‘ With The Columbia Permanent Building Association 1§ 733 12th Street N.W. ] Main 352.353 M v MINE EXECUTIVES EYE LEGISLATION Leaders in Industry Convene Here for Opening of An- nual Convention. ‘With the eyes of leaders in the min- ing industry focused on pending tariff and taxation legislation, the American Mining Congress opened its thirty-first annual convention at the Mayflower Hotel at noon today to consider vital problems affecting the industry and its widely interallied interests. Government officials, members of Congress and leaders in the various branches of the mining industry were scheduled to deliver addresses on the various phases of domestic and interna- tional mining activity. Upward of 500 delegates, including official delegates appointed by the governors of several States, are expected to register before the convention closes Saturday. Following & Iluncheon meeting at which Secretary of Labor James J. Davis was expected as the principal guest, the formal business sessions of the convention were to be opened by President J. G. Bradley of Dundon, W. Va, who is president of the Elk River Coal & Lumber Co. This session will be devoted to international mining discussions under the leadership of Mr. Bradley, Legislation Occupies Attention. ‘Mining legislation is expected to play an important part in the sessions of the convention, at which attention will be directed to various bills pending in Congress affecting the industry as a whole. These will be outlined to the delegates by leaders of the Senate and House as well as spokesmen for the American Mining Congress. ‘The joint congressional committee on internal revenue taxation is about to consider the application of the per- centage principle in determining mine depletion, a question of utmost impor- tance to the industry. Should a tax re- vision bill be considered at the short session, the depletion question would be taken up. Otherwise the change in the law would await the time when Con- gress again revises the tax law. Con- sequently, leaders in the Ameriean Min- ing Congress are keeping in close touch with the situation on Capitol Hill and will be in conference with members of the mining committees of both houses as well as those which are dealing with the tariff and taxation programs. Pending tariff proposals of particular interest to the mining delegates will be discussed during (the session. With these matters pending, the tariff and taxation discussions promise to be among the most important during & THE EVENING STAR, WASH NGTON, D. C, WEDNESDAY, DECEMBER 5, 192 DELEGATES TO MINING CONGRESS H. E. Willard (left), delegate from Cleveland, and former Gov. Jesse Fy McDonald of Colorado, who are attending the American Mining Congress, now in session at the Mayflower Hotel. —Star Staff Photo. “GIVE AWAY” FIRS TAXED AS DEALERS Concerns Distributing Jew- elry on “Coupons” Required to Pay Extra Assessment. By the Assoclated Press. Concerns giving away jewelry to con- sumers for coupons issued with its pro- ducts have been adjudged taxable as dealers in jewelry by the United States Court of Claims, in a test case involy- ing $16,944 assessed against Colgate Co. The court has also rendered the convention. N * At the afternoon session Mr. Bradley is speaking on the work of the Ameri- can Mining Congress as a clearing house for mining; J. W. Furness, chief of the minerals division of the Bureau of Foreign and Domestic Commerce, on the flow of minerals in world trade, and Baltimore & Ohio $3.50 Philadelphia $3.25 Chester | $3.00 Wilmington AND RETURN Next Sunday, Dec. 9 . Washington Ar. Philadelphia . . o o RETURNING Lv. Philadelphia . + « o LrChester . . o oo o 7.50M Ln. Wilmington . . . . 8.10M (Standard Time) Same Day Consult Ticket Agent 735 1047 ceen 730 K H. Bentley Mackenzie, former American commercial attache to Buenos Aires, on mining in Argentina. Convention Committee Named. The first business of the convention was the appointment by the board of governors of its manufacturers’ divi- sion of a committee to decide the time and place for the next annual conven- tion of practical coal operating officials and national exposition of mining equipment and machinery. Attending the convention are official delegations appointed by Govs. Donahey of Ohio, Adams of Colorado, Balzer of Nevada, Fisher of Pennsylvania and Graves of Alabama. Among delegatés representing other mining and metal societies at- tending the convention are Prof. Louis H. Cook of Washington, delegate of the American Society of Mechanical Engi- neers; Director George Otis Smith and H. 1. Smith of the United States Geological Survey and W. M. Corse of Washington, representing the American Institute of Mining and Metallurgical Engineers; H. D. Miser of the Geologi- cal Survey, for the American Associa- tion of Petroleum Geologists, and N. G. Hough and W. V. Brumbaugh of Wash- ington, representing the National Lime Association. Reports Are Made. Reports on the mining industry were made at a luncheon tendered the dele- gates this afternoon as follows: A. G. Mackenzie, Salt Lake City; J. D. Conover, Miami, OKkl: W. E. E. Koepler, Bluefield, W. Va.; G. Chester , San Francisco; J. D. Zook, Chi- cago; C. Lorimer Colburn, Denver; Dr. E. H. Wells, H N. Eavenson, Pittsburgh; Philadelphia; Henry C. Rives, Reno, and Stephen S. Tuthill, New York. One of the most important sessions of the convention is scheduled tomor- row when wndmrm.;- glls ]t}:;a coalfllncg:‘s- and proposed legislation affecting f{’wxu be considered from many angles. Reduction of the number of surplus mines, which has created a serious situ- ation in competition, likewise is a mat- ter which undoubtedly will be given prime " copsideration by the ‘experts of the industry. FRENCH COURTS HIT BY SENATOR NYE Refusal to Permit Extradition of Blackmer to U. 8. Character- ized as Unfriendly Act. ‘The refusal yesterday of the French courts to allow the extradition sought by America of Harry M. Blackmer in connection with the inquiry into the Government’s leases of oil flelds drew sharp criticism from Senator Nye, Re- publican, of North Dakota, the chair- man of the Senate public lands com- mittee, “I don't see how the American peo- [ | ple,”” he said, “can regard the action of France as friendly or considerate. The average American is going to wonder how much it cost Mr. Blackmer to win that action. The French courts have been considering the Blackmer defense as political persecution, whereas the American public looks on the case aside from any political motive. I hope the time will never come when America will be coming 'to the defense of such scoundrels in the way France has come to the defense of Blackmer.” Washington officials seemed to regard the action of France as final in the case. o MAN HELD ON GAMING CHARGES AFTER RAID Seven Witnesses Detained to Ap- pear Against Leo Wallack in Court Today. Raiding an upper room of a building in the 1200 block of New York avenue yesterday afternoon, Detectives G. R. Browning and John R. Lefoe of the first precinct _ yesterday arrested one man on a charge of ‘setting up a gaming table and held seven others as | witnesses. The man charged was Leo Y. Wallack a judgment in favor of the Government in an action brought by the Ward Bak- ing Corporation to recover $59,085 excise taxes. In the Colgate case, it was shown that $3,000 was being expended an- nually in each of about 50 stores on the coupon premium distribution and redemption system. Government counsel, who showed that over 920,000,000 coupons had been redeemed for pre- miums in four years, successfully con- tended that this constituted ‘“dealing” in the tax-sense. The Ward excise taxes were placed upon the corporation’s capital stock by the commissioner of internal revenue for the years ending June 30, 1925, and June 30, 1926. The instance involved the purchase by William B. Ward of| stock in the Ward Baking Co., followed by organization of the corporation, which subsequently claimed exemption from the assessment on grounds of be- ing & holding company. The Court of Claims held, however, ‘that the corpora- tion was engaged in trade expansion and so subject to the assessment. PERMIT FRAUD COSTS COLORED DRIVER $300 Man Paid $15 to Secure License for Friend Who Failed in Tests. Discovered attempting to get an auto- mobile driver’s permit for another per- son, John Arthur Smith, colored, was yesterday convicted by Judge John P. McMahon of misrepresentation in ob- taining & permit and sentenced to pay $300 fine or serve 45 days in jail. According to testimony, Smith had been paid §15 by Sterling Bailey, also colored, to get a permit for him. Bailey had previously attempted to get a per- mit and failed to pass the tests. Smith appeared at the Traffic Bureau, swore he was Bailey, passed the tests and was given a 10-day permit, it was testified. When he returned to get the permanent permit discrepancies in his statements had been discovered and he was arrested by Policeman Schrier of the Traffic Bureau. % James Walter Carter, colored, who posed as a licensed instructor for Smith, was also tried on the same charge, but sentence has not yet been imj Police are now looking for Sy Sy e d. ailey. WEALTHY TEACHER PLANS TO RESUME SCHOOL WORK Made Million From Radio Inven- tion and Will Return to Study of Mathematics. By the Associated Press. NEW YORK, December 5—A 42- year-old former professor of mathe- matics who has made almost a million dollars from his invention of the neu- trodyne radio circuit has renounced business to devote himself to the study of mathematics. Prof. Louis A. Haxeltine invented the radio hook-up while teaching mathe- matics in Stevens Institute of Technol- ogy, at Hoboken, N. J. Today he start- egymr Oakland, Calif,, to do mathe- matical research and writing. During his 18 years as teacher, he ex- plained. he had no time for adventure in the realms of pure mathematics. Now he has money to indulge this hobby and his four others—walking, swimming, ca- noeing and tennis. BANKER SENTENCED. Two South Carolina Men braw Terms for Embezzlement. FLORENCE, 8. C., December 5 (#). —Sentences of eight and seven years in the Atlanta Federal Penitentiary were imposed by Federal Judge Ernest Cochran yesterday on two South Caro- lina bankers who pleaded guilty to charges of embezzlement and misappro- priation of national bank funds. 1. T. Welling, cashier of the Carolina National Bank of Darlington, was sen= tenced to serve eight years as a result of the shortage in his accounts of $130,000. S. G. Godfrey, vice-president and cashier of the First National Bank of Cheraw, received the shorter term. His accounts were short $55,000. Both banks closed last month. CAFE BURGLARIZED. of the New York avenue address, who gave $2,000 bond for his appearance in Police Comrt today. —— Kashmir State, India, is bullding many roads over its lofty mountains. Scott Smith, manager of a cafe at 1313 E street, today reported to the fonce that thieves last night entered he place and stole $150 in cash and a check for $26.80. Entrance was galned through a rear door, Y CLASH INPENDING ON ARMY PROGRAM Two Conflicting Bills Recom- mend Changes in Pro- motion Scheme. In the rush of legislation scheduled for the short session of Congress, none is more important from the standpoint of some 5,000 officers of the Regular Army of today than the two bills now before Congress providing for recom- mended changes in the Army promo- tion scheme. Consideration of the two major bills now before Congress, on which hearings were held at the last session, will again bring up an 8-year- old fight within and without the War Department, in which considerable feal- ing been aroused because of the claimed inequitable features of one of the measures. Legislation sponsored in the Senate by Senator Black of Alabama, and in the House by Representative McSwain of South Carolina, is characterized by some 2,600 officers, who have been in the Army since the outbreak of the World War, as directly leading toward their forced retirement from the serv- ice. This legislation is in conflict with legislation along similar lines sponsored by the War Department, whose terms of promotion, however, are vastly dif- ferent. Secretary of War Dwight F. Davis, has submitted an adverse report on the Black bill to Senator David A. Reed, chairman of the committee on military affairs, who is sponsor for the War Department bill, which' would re- vise the promotion system of the Army in a manner which fits in with War Department recommendations. Situation Briefly Outlined. ‘The situation, briefly, is this: The War Department bill, officially pre- sented and with the backing of the chairman of the Senate military affairs committee, is designed to give officers in the Army promotion based upon length of service. It affects every of- ficer. in every service. The Black and McSwain bills are de- signed to rearrange the promotion list on the basis, it is claimed, of selecting certain officers and jumping them over the heads of others, These men are officers who_served during the World War, but who did not come into the Regular Army until July, 1920, and members of the classes of West Point who have been graduated since the war. Action on the War Department bill is claimed by its proponents to have been interrupted -and held back by controversy on the bills introduced by g?nax:or McSwain and Representative ack. Meanwhile charges of lobbying on be- half of the promotion scheme under the Black bill have been shunted back and forth in Army circles in the Capital, with proponents of the War Depart- ment measure claiming the opposition have organized a lobbying campaign and have hired a paid lobbyist from the recelgta of assessments of $2 each levied on the officers who would be favorably affected by passage of the Black measure. . World War “Hump” Problem Cited. Intermingled in the problem is the So-called World War “hump” in the size of the commissioned personnel of the Army, by which several thousand officers commissioned during the war, remained in the service after the con- flict, thereby greatly increasing the commissioned personnel above the nor- mal output of West Point in time of ce. This problem will be normally ndled, it is claimed, by retirement. A minority report from the committee on military affairs on the Black bill, declares the latter measure is essentially class legislation fostered by particular groups of officeres, who seek a high place on the promotion list at the ex- pense of others. “They seek to have an incident of the service that is favor- able to them,” the report says, “deter- mine their positions on the promotion list no matter who may be adversely affected, “The legislation will be disruptive to morale and will promote disintegration in the conmnissioned personnel of the Army. It will be the first instance of position of officers being changed or ‘jumped’ on the prometion list and but the beginning of a series of efforts on the part of various groups to attain preferment. “This legislation is contrary to the consensus in the Army, as reflected in the reports of 58 boards of promotion list officers convened throughout the Army, 42 of which were opposed to a revision of the present promotion list.” Promotfon List Dates From 1920, “The present promotion list dates back to 1920, when the Army re- organization act became effective. The fundamental unsoundness of the bill,” the report continues, “lies in the pro- vision that all of the 5,000 officers F. | shall now be arranged according to the rank they happened to hold in 1920. For those officers who were already in the Regular Army it would be the height of injustice to arrange them, even among themselves, on the basis of the grades they happenéd to hold June 30, 1820.” So, within the usually quiet circles of Army commissioned personnel a warm fight is going on over the always slow business of promotion pro- cedure. Those who would be affected by the provisions of the Black bill— about 2,600 officers—claim they will have to leave the service immediately if the measure is passed. The pro- ponents of the .Black bill claim they should not be placed behind the men who remained in the service after the World War,'” And behind the scenes the friendly scrap goes on. . Belgradé, Serbia, 500,000 inhabitants, has four churches, SENATORS OPEN TRACTION MERGER STUDY TOMORROW (Continued from First Page.) power and one dealing with capitaliza- tion of the merged company. ‘The bureau points out that substi- tution of the $50,000,000 valuation in lieu of the original cost of the proper- ties as a basis for handling deprecia- tion would result in increasing the annual depreciation charge of $500,- 000. This could be avoided, the report suggests, by including in the merger legislation a proviso for a continuity of accounting for depreciation on the present basis of the money cost of property to the existing companies, and the transfer to the new company of their accumulated depreciation reserves. On this basis, the bureau declares, the new company will probably be abie to earn a reasonable return on the $50,- 000,000 without an increase in fare. Power Clause Held Vague. ‘The bureau' calls the electric power clause vague, and recommends that a definite unit of measurement be estab- lished for the power furnished the new compahy, and that the merged railway company receive its just propor- tion of future decreases in power pro- duction costs. On the subject of capitalization, the bureau says it finds that the balance sheet of the Capital Traction Co. for June 30 last shows its net current assets had increased nearly $600,000 over the estimate on which the merger is to be based. The bureau recommends that instead of issuing additional capi- tal stock to cover these assets, the ex- cess of current assets be used by the merged company to set up a funded re- serve. ‘The report states that Washington compares favorably . with other cities in street car facilities, and that fur- ther improvements would result from consolidation. The savings resulting from unified operation are estimated in the reron at_approximately $1,000,000 annually. The bureau tells Congress it has learned the Amalgamated Association of Street and Electric Railway Employes has withdrawn opposition, upon assur- ances that company officials will recog- nize the union and contract with it. ‘The bureau outlines in its report the results of a study of the accounting methods of the local companies, made by the Interstate Commerce Commis~ sion. The report stated that the Cap- ital Traction Co. has been keeping its books in accord with standard practice, except in the accrual of depreciation, which it keeps on a sinking fund in- stead of a straight line basis. Several exceptions to accdunting methods of the ‘Washington Railway & Electric Co. are discussed. Summary Prepared. Following is a summary prepared by the Bureau of Efficlency to accompany its voluminous report on the local street railway situation: Briefly, the general conclusions of the bureau are: That in order to give the public a more satisfactory street car service cer- tain definite improvements and econo- mies must be effected in the operation of the system; That such improvements and econo- mies are only possible by merging of the several street railway gmpert(es: ‘That & merging of the properties would result in large savings in operat- ing expenses; That in order to effect such a merger a valuation of the properties must be agreed upon; ‘That the valuation of $50,000,000 pro- posed as a rate base by the street car companies would probably be legally sustained at the present time in view of the recent decisions of the District courts and the Upited States Supreme Court; That, therefore, the sum of $50,000,000 be accepted tentatively as the basis of the proposed merger in order that the improvements and economies following the merging of the properties may be- coxgfi immediately .available to the public; Urges 10-Year Limit. That this basis be accepted with the proviso and understanding, however, that this valuation shall stand for 10 years only or such shorter period as Congress shall determine; That the property shall be subject to revaluation in accordance with the rules of law prevailing at that time; That three modifications to the unification agreement be made: First, in regard to continuity of depreciation accounting; second, in regard to the power contract of the new transit company; and third, in regard to the capitalization of the new company; ‘That on the basis of the figures of contemplated net increase of revenue there appears to be no justification for any increase in fares as a result of this merger or as & result of the rate base recommended in connection with it; ‘That, in'view of the uncertainty with respect to the time that would be required to bring about the econo- mies of unified operation, Congress may wish to extend beyond one year the period during which no increase in fare shall be granted; Decline Is Cited. ‘That, in connection with the general problem, the declining tendency of the business of the street railways, as shown by the number of gers carried annually, should not be over- looked. To the students of the prob- lem in the Bureau of Efficlency this decline is an indication that, in the future, a valuation may not be so much a factor in the determination of fares and charges. as has been the case dur- ing the past 10 years. It may be that a time is approaching when these street railways will have to consider, in determining their fares and chal , not “what the traffic will bear,” but what will so increase business as to enable them to continue in profitable operation. In discussing the proposed rate base of $50,000,000 the Bureau of Efficiency points out that this is a compromise figure which falls midway between the reproduction cost now as computed by the companies on the basis of the court decisions in the Capital Trac- tion Co. case and the original valu- ations of the Public Utilities Commis- sion at 1914 prices brought up to date by adding net additions at cost. There is good reason to doubt that a revalu- ation at this time would result in a lower figure, in view of recent decisions of the Dsitrict Courts and the United States Supreme Court which favor the cost of reproduction as the measure of fair value. On the other hand, the Interstate Commerce Commission has adopted & method of valuation which results in a lower value than that arrived at by the bapplication of the current reproduction cost doctrine. The proposed rate base is limited to a perlod of 10 years, and there is nothing in the agreement to prevent the Public Utilities Commission rom_starting a valuation in time to APPROPRIATE SITE ‘WANTED In or adjacent to the finan- cial section of Washington by a syndicate for the purpose of erecting an athletic and social club with accommodations for a membership exceeding a thousand. Reply by letter only, giving location, ete. L. J. WALKER Wardman Park Hotel Washington, D. C. have it completed at the tion of the 10-year period. Therefore, if at some future time the v‘%l:ed stth‘o? Iglola preme approves me by tluegn“gnutd ‘Commerce Commis- slon, the local transportation properties may 'frcperly be revalued by the Public Utilities Commission in accordance with the decision of the court. The 10-year limitation on_the rate base also safe- guards the public interest against future decline in prices and a consequent de- crease in the value of the street rail- ways from a reproduction standpoint. Suggests Depreciation Rule. The report states that the substitu- tion of the valuation of $50,000,000 in lieu of the original cost of the properties as a basis for depreciation charges would result in an increased annual charge for depreciation of approximately $500,000. This could be avoided by including in the legislation authorizing the unifica- tion a provision requiring a continuity of accoumting for depreciation on the present basis of the money cost of the property to the existing companies and the transfer to the new transit company of their accumulated depreciation re- serves. On this basis the new transit company will probably be able to earn a reasonable return on the $50,000,000 valuation without an increase in fares. ‘With reference to ths power clause of the unification agreement, the Bureau of Efficiency believes it is so general and vague In its terms that it may fail in its purpose because no unit of measure- ment is provided by which variations of the amount of power consumed or in the production cost may be determined. It is therefore suggested that the inter- ested parties agree in advance that the power contract between the new tran- sit company and the Potomac Electric Power Co. provide that certain units of measurement be used in computing the cost of power to the new company and that the new company be granted its Just proportion of future decreases in power production costs. A final suggestion for modifying the agreement relates to the capitalization of the new transit company. It is pointed out that on the basis of the Capital Traction Co.'s balance sheet of June 30, 1928, its net current assets had increased neatly $600,000 over the orig- inal estimate on which the agreement was based. Additional capital stock will have to be issued to the ‘Washington Railway & Electric Co. for these cur- rent assets, thus destroying the parity of stock ownership between the two companies, To prevent this it is sug- gested that the excess amount of cur- rent assets contributed by the two com- panies be set up by the new company as a funded reserve without issuing any stock against it. Bus Inclusion Favored. In the opinion of the Bureau of Ef- ficiency, a unified transportation sys- tem should include both street cars and busses so co-ordinated as to render the particular service for which each is best adapted. The acquisition of the bus company is therefore essential for the pui s of the proposed uni- fication, and it is not a matter of great moment whether that end be accom- plished by absolute merger or stock ownership. The section of the report entitled “Economies of Unified Operation” con- tains an analysls of 10 reports prepared by 6' engineering organizations at vari- ous times during the last three years. Reduced to comparable bases the esti- mates of these engineers indicate that the eventual savings from unification should, in their opinlon, approximate $1,000,000 per amum. All the en- gineers are agreed that the largest economies will result from the more efficient routing of cars on a unified system. In addition, the engineering reports list certain indirect savings, in- cluding the consolidation of barns and shops, the reassignment of cars to barns and the reduction in general overhead. For the purpose of ascertalning the relative efficlency of the street rail- ways of Washington and other cities the investigators of the Bureau of Ef- ficlency made & number of comparisons of operating results on various unit bases. These comparisons are favora- ble to Washington in view of the sepa~ rate operation of the two companies and ‘the underground condult system used by them. There is little doubt 1330 G ST MERGER REPORT MAY AID APPROVAL Utility Experts See Way - Paved for Ratification of Agreement. ‘The Bureau of Efficiéncy’s general approval of the transit merger plan had alded materially in paving the way for formal ratification by Con- gress of the unification agreement now pending before it, according to views that under unified management the comparisons should be even more fa- vorable to Washington because of the economles and service benefits which may be expected from a co-ordinated transportation system. Union Withdraws Objections. ‘The investigation of the Bureau of Efficiency indicates that the controversy over the inclusion of a labor clause in the unification agreement has been sat- istactorily settled. The Amalgamated Association of Street and Electric Rail- way Employes has withdrawn its ob- Jection to the agreement on the basis of assurances from company officials that they will recognize the union and enter into contracts with it. In a final section of the report on “The North American Co. and Its Re- lation to the Public Utilities of the Dis- trict of Columbia” it is stated that the North American Co. now owns about 1 51 per cent of the voting stock of the Washington Railway & Electric Co. If the unification agreement is approved the Washington Railway & Electric Co. will cease to exist as an operating com- pany and will become a holding com- pany controlling, not only the Potomac Electric Power Co., but also the new Capital Transit Co. But the rates, service, etc., as heretofore, will be sub- ject to the regulation and control of the Public Utilities Commission of the District of Columbia. At the request of the Bureau of Effi- clency, the Bureau of Accounts of the Interstate Commerce Commission made a special examination of the accounts of the Capital Traction Co. and the Washington Railway & Electric Co. and affiliated street railway companies for the five-year period 1923 to 1927. The examination of the accounts of the Capital Traction Co. shows that this company has been keeping its books in accordance with s.andard practice, with one exception—namely, the accrual of depreciation upon the sinking fund in- stead of the straight line basis. Reserve Held Overstated. ‘The restatement of the accounts of the Capital Traction Co. on the latter basis for the five-year period shows that the depreciation reserve was overstated $341,000. On the other hand, several exceptions are taken to the methods of accounting used by the Washington Railway & Electric Co. The uniform system of ac- counts for electric rallways requires that substantial reconstruction of continu- ous structures shall be accounted for on the basis of retirement of the cost of the affected property before reconstruc- tion and a charge to the property in- vestment account of the cost of the re- placement property. Nevertheless, this company charged the entire cost of work of this character to operating ex- penses except in so far as charges were made to property account with respect to net additions and betterments and also with respect to arbitrary charges made to the depreciation reserve. As a result of this practice and certain other deviations from the uniform system the depreciation reserve of the Washington Rallway & Electric Co for the five-year period was overstated $592.000. the in- vestment account was understated $438,- 000 and the net operating income was understated $1,150,000. KITT CO. expressed today by public_utility ex- perts and attaches of the Public Utilis ties Commission. Although the bureau prepared the Teport primarily as a text book of in- formation on the transportation con- ditions in the District for the Senate District committee, those in close touch with public utility affairs feel con- fident that it will have a far-reaching influence on the committee, as well as the House and Senate, when the pact comes up for ratification. Similar to Previous Report. The report, in the main, differs little from the recommendations of the Pub- lic Utilities Commission, which sent the merger agreement to Congress last SPHHK after an exhaustive investigation of its terms and provisions together with a favorable report recommending only a few minor modifications in the original text. Although members of the utilitles commission a dnthe attaches have not seen a copy of the bureau's compre= hensive report and base their conclu= sions on a hasty and cursory examina= tion of newspaper accounts of the docu= ment, they are inclined to accept it as an indorsement of the plan in general. The commission members and attaches, however, do not propose to make any comment on the report until after they have made a careful analysis of its contents. Advocates Gratified. As the proposed $50,000,000 initial rate base for the merged company is con- sidered the very heart of the unification agreement, the bureau's tentative ac- ceptance of it under certain prescribed conditions apparenily gratified merger advocates. There had been fears that the bureau would urge a lower rate base since valuation engineers of the Inter- state Commerce Commission had made a study of the property values of the transportation companie for the bureau. The theory of valuation used by the Interstate Commerce Commis~ sion, the bureau pointed out, however, would result in a lower value than that arrived at by the application of the re- production theory formula used by the local Utilities Commission. The $50,000,000-rate base was ap- proved by the Utilities Commission on the basis cited by the car companies— that it is a compromise between the valuation of $62,000,000 they are en<" titled to by application of the pri ciples laid down by the Court of A peals in the Capital Traction Co.’s valuation case. The bureau, however. recommended that the $50,000,000 fig- ure stand for 10 years or a shorter period as Congress shall determine, after which a revaluation should be made of the merged company. Fare Factors Differ. ‘The merger agreement indorsed by the commission also stipulated that the rate of fare should not be changed until at least one year after consummation of the unification; whereas, the bureau declared that on the basis of the fig- ures of contemplated net increase revenue there appears to be no justifi- cation for any increase in fares as & result of this merger or as a result of the rate base recommended in connece tion with it. Apartments Available The Highlands “A Most Desirable Permanent ddress” Conn. Ave. & Cal. St. O ne of Washington's exclusive Apartment Hotels offers suites from 2 to 7 rooms, furnished and unfur- nished. Rentals Moderate Wardman Management 1330 G ST. 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