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THE EVENING STAR. W! HINGTON. D. ¢.. THURSDAY. DECEMBER 6, 1928 For Impaired Vision —~Consult an Eye Physici(ln A little thought brings us to realize to what ar. increased ex- tent we are using our eyes under modern conditions, compared with those of a gen- eration ago. EDMONDS == O PTI GCIAN 915 Fifteenth Street WASHINGTON Makers of Eve Glasses and Spectacles Exclusively since 1899 3rd & Eye Sts N.E. OCGUE Cleaners Phone Atlantic 25 Call and Deliver WORLD’S LARGEST DRY CLEANING PLANT DON’T WORRY VOGUE CLEANERS TAKE Out Soil and Put Back Style [ ] We cordially invite vou to inspect our large and modern plant. See where vour cleaning is done. With the Winter season your cedar chest will dis- close many erticles that with proper cleaning will do full justice to another season’s wear. If you are interested in dry cleaning —VOGU ANERS SERVICE interest you. Blankets, Dra- peri Men's and Women's Wearing Ap- parel can be restored to Dry clean- Rugs, look like new. ing improves the wearing abilities of fabrics . . . makes them look better and increases sanitation. The finest imported rugs, fur coats, dainty evening dresses are cleaned and pressed by hand with the greatest of individual care. will Call Atlantic 23—Miss Gray—Personal Service Dept. THE GREATEST OF ALL PIANO CLUBS VERY year hundreds of prospective piano purchasers anx- iously await the announcement of our $2.00 Xmas Club, This year the advantages to Club Members are greater than ever. First, the big saving in price—made possible only through quantity buying for this great club. Then the very easy terms. FREE FREE _gOLLS ROLLS FREE FREE MUSIC MUSIC LESSONS LESSONS IMMEDIATE DELIVERY If You Choose The pianos are all ready in our stock and can be delivered immediately to your home. This is the greatest opportunity of the vear to own a beau- tiful new Piano-Player or Baby Grand on very easy terms. Investigate this great club offer im- mediately. This is the twelfth consecutive year of this club, and the values are twelve times greater than ever! GS OPEN EVEI ARTHUR JORDAN e or 15 & Hamlin—Knahe—Chickering Fischer—The Ampico DRASTIG CHANGES ljects $50,000,000 Valuation, 1 0. K.d by Efficiency Bureau. (Continued From Fourth Page.) | rates of fare shall remain in effect for | a period of one year. | “Just what is intended by the words ‘shall be entitled to earn a reasonable | rate of return’ is somewhat uncertain; but probably they mean that the new company may fix the rates of fare to be charged until the net income derivea | therefrom shall cxceed the reasonabl> rate of return, whatever that rate may s fixed by the commission or the courts, except that all charges for transfers between street railway lines in the Dis- trict of Columbia shall be abolished as soon as the agreement has been ap-| proved and the necessary legislation enacted. “So far as the agreement is con- cerned, there may be charges for trans- fers from street cars to bus and vice versa. Report questions whether the Public | Utilities Commission would hav~ any power or discretion over fares-and irans- fer charges until the company has earn- ed a reasonable rate of return. Questions also the power of the Pub- | lic Utilities Commission over service if | the company is not earning a reasonable | | rate_of return. | “The decisions in the Capital Trac- tion case have been analyzed and in my opinion the decisions of the courts do not constitute a final or sacred rul- | ing, except and until a revaluation is | made by the commission, and, if nec- essary, the matter is again passed upon by the courts. Modification Is Seen. “Further, in my opinion, as already | stated, if the matter is completely, ade- | quately and properly presented to the | courts, the valuation which they have fixed will be considerably modified. “It is even clearer that if the Wash- ington Railway & Electric Co. secures an adjudication as to the value of its proverty on a complete, up-to-date and | properly presented record, the value of its property will not be found to be $36.000,000.” Report, arguing against inclusion of rate-base of $50,000.000 in agreement, says: “If the companies or their stock- holders are sure of their legal position, | there is no need for concern merely because the two systems are brought under the control and management of one company. If, however, htere is any doubt of the ability of the companies to obtain from the courts a valuation of $50,000,000 or more and to maintain it for 10 years * * * the companies will be in a stronger position when Congress has approved the contract. Report questions whether prices upon which present valuations by reproduc- tion method are based will remain as {high as now. “Whether prices will in- crease or decrease or remain stationary is a gamble. Is it wise for public au- | thorities to tie to a 10-year program which involves a forecast of price trends? Further, if it is fair that cur- rent prices should now be an important factor in determining values should not utilities be entitled to any increment and required to assume the loss due to declining values? Calls Value Optimistic. ‘‘One must be extremely optimistic to {hold out the expectation that the value | of the present property of the two street railway systems in Washington will ex- ceed $50,000,000. “In the light of the preceding discus- sion of the rate base clauses of the agreement, I suggest that they be elimi- nated and that the commission be left with the general power of regulating fares without limitation or restriction in the contract. The commission will then be in position to deal with the question of increased fares when it arises under the conditions that then obtain and subject whatever provisions may be es- tablished by law and by the rulings of the courts. “Unificatiion has been brought about in scores of cases without any attempt to delimit or expand the powers of the companies upon the one hand and of the regulatory bodies upon the other. “I can see no reason why, in all fair- ness to all of the parties affected by unification in Washington, there is any | necessity for a variation from the usual | method which has been found so gen- erally satisfactory elsewhere. The pub- | lic and the companies will be benefited | by unification wholly apart from any | change in their status as to valuation and rate making, and it seems unneces- sary to bring in a subject which has been and will be the topic of such great differences of opinion as to the value of the property.” Differences Pointed Out. Report says it is impossible to fore- cast accurately savings that will be| affected by unified operation and points | out the great differences between esti- | mates of various experts and authorities. | “At one extreme, there are the state- ments of certain officials that the re- duction in operating expenses due to unification alone will not be very large. | At the other extreme, is the estimate of Mr. Hansel, who pictures a reduction in operating expenses and taxes amounting to $2,377,000, which is over 25 per cent of the total expenses and | taxes of the two companies. Between these two extremes there are the esti- mates of Mr. Bibbins, Messrs. McClel- lan and Junkersfeld, and Messrs Bar- tholomew and associates. These three have been made at various times for the North American Co. Mr. Bibbins estimates the savings at $841,000: Messrs. McClellan and Junkersfeld at varying amounts, depending upon cer- tain conditions, but somewhat over $1,000,000 in each case, and Messrs, Bartholomew and associates at $968,000." Report. points out that Mr. Hansel's estimate made on a different basis than the others. Income Cut Is Seen. Report, after discussing various sav- ings likely under unification, as well as losses of gross revenue, states: “Upon the basis of the preceding analysis the gross revenues of the new company would be $260,000 less than in 1927, and net income, $2,592,000, after deducting the taxes charged in 1927. These changes will cause certain alterations in taxes. * * * The net effect of these changes would be to reduce the net income to $2,537,000. “This amount would represent a re- turn upon a rate base of $50,000,000 [ of less than 5.1 per cent; and if in | order to earn the net income ‘set forth | above it would be necessary to add to the rate base, which is quite likely, this | percentage of return would be reduced | to less than 5 per cent. “The agreement does not fix the rate of return, but leaves the rate to be de- termined by the commission with ap- peal to the courts. At a 6 per cent rate the new company would be en- titled to an increase in its net income of $463,000; at a 7 per cent rate an increase of $963,000 (or a total net in- come of the new company of $3,500,- 000). “In order to earn a net income of $3,500,000 the new company would have the right under the contract to increase fares appreciably. As higher fares would increase gross earnings as well as net income, the gross earnings tax and the Federal income tax would be increased. In order to increase net income by $963,000 the company would be obliged to increase its gross by con- siderably more, or about $1,140,000. Fare Rate Speculative. “What Tate of fare would be neces- sary to produce a net ingome of $3,500,- IN MERGER URGED Senate’s Expert Flatly Re-i | of $2,400,000 to' be approximately cor- | clearly is unjustified or illegal.” ! | f| Dinner Speaker i . FREEM. BISHOP TO SPEAK. AT DRIVE OPENING Right Rev. James E. Freeman Will Address St. Thomas’ | Church Workers Tonight. Right Rev. James E. Freeman, Bishop of Washington, will make the principal address at the opening campaign din- ner tonight in St. Thomas' Church hall | in the drive for funds to raise a 17.-1 000 debt on the parish house. Senator Walter E. Edge of New Jersey also will make an address. Maj. Ennalls Wagga- man, chairman of the campaign com- mittee, will preside as toastmaster. The guests will include members of | the vestry as follows: Melville Church, | Theodore W. Noy A. P. Crenshaw, ! Charles J. Bell, Col. William Baird, Needham L. Jones, Lester A. Barr, Er- nest Wilkinson, Maj. Waggaman and Senator Edge. ; | The women of the church will fur- nish and serve the dinner under the | direction of Mrs. H. E. Copenhaver. Her assistants will include Mrs. Paul | B. Fenlon, Mrs. John C. Davison and | Mrs, William C. Prentiss. The 90 campaign workers will make their individual reports after the din- ner. LAUDS KELLOGG PACT. Evangelist Declares U. S. Agnini Will Lead Peace Move. Rev. Kirk B. O'Ferrall, who is con- ducting the evangelical mission in the new parish hall of St. Stephen and the Incarnation Episcopal Church, Six- teenth and Newton streets, in his ser-| mon last night on “The Tests of Life | and How to Meet Them,” launded the Kellogg peace pact as indicating that | this Nation will again take up the lead- ership for world peace and the elim- | ination of war, which leadership was temporarily abdicated as the result of | misunderstandings and disillusionments growing out of the peace treaty at Versailles. Tonight Dr. O'Ferrall will preach on “The Prodigal Son,” and tomorrow night, when the mission closes, on “Yes- terday, Today and Forever.” Large crowds are attending the mission. be required or some schedule approxi- mately equivalent to a 10-cent cash fare, with four tokens for 30 cents. “In general, it may be said that the above estimates understate rather than overstate the amount of increase in fares necessary to produce a 7 per cent return upon a rate base of $50,000,000. “The companies have not prepared estimates of the additional capital which will be needed for additions and betterments and unification purposes. After paying for the stock of the Wash- ington Rapid Transit Co. the new com- pany will have net current assets of about $1,800,000, assuming the estimate rect as the amount of net current as- sets which will be transferred to the new company. Materials Are Included. “A considerable part of this sum will represent materials and supplies and part_cash, which will need to be re- tained for corporate requircments. “It seems probable that the required expenditures will be in excess of the funds available in current assets and the amount in the depreciation reserve. “The new company wil probably need to raise additional capital by the issuance of securities. - “As previously pointed out, the new company will be controlled by the North American Co. through the ownership of stock in the Washington Railway & Electric Co. The North American Co. is a holding company. It does not maintain any management, engi- neering or _construction departments, and the only charges that have been made by that company to subsidiaries | have been for portions of salaries of | certain officers of the parent company | who are also officers of the subsidiary or controlled companies, for certain ac- counting, financial and statistical work which has been performed for subsidi- arles by the parent companies and for services in relation to stock registration, bond coupons and fiscal matters. The Washington Rallway & Electric Co. has not made any payment to the North American Co. for any of such services. Charges Not Uncommon. “It is not uncommon for parent com- panies to make charges to subsidiaries for financial assistance and advice, en- gineering and accounting services and general supervision and management. “These charges are usually the sub- ject of much discussion in rate cases, and if the North American Co. were to adopt the practice of charging the new company any fee of such a char- acter the reasonableness of the charge would be a matter for consideration and determination by the Public Utilities Commission. “The courts have generally upheld such charges, provided they appeared to be reasonable compensation for serv- ices rendered, and they have been loath to overturn any arrangement unless it Christmas Jewelry Shop at_the friendly store —you're always greeted with a smile—with no obligation to buy. Specializing in Perfect Diamonds Large assortment bar pins, searf pins. with complete line of standard watches. Charge Accounts Invited M. Wurtzburger Co. 742 Ninth St. N.W. i & % i % % % 000 under all of the circumstances that seem likely to obtain in 1930 is specu- lative. The best estimate that I can make is that ap §-cent cash fare would RS LI I BB T, Open Evenings THE GREAT SAVINGS Whenever you go into an A&P Store you have the assurance that the utmost in value is offered . . . the assurance, too, that only fine quality foods are hefore you, and always at a price you know is the lowest possible consistent with fine quality. T E MEAT MARKETS |=—— U. S. Goot. Inspected Meats, Selected Poultry and I EG Of Fresh Fish at the lowest possible prices consistent with Lb. 33¢ the high quality. Zhe Genuine Spring Lean End Pork Chops. . ........ Lean Fresh Shoulders. .. ........"™ 2l¢c 236 Shoulder Lamb Roast Lean FreshHams............. 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