tion cost new of physical property, including land, materials, and supplies and working capital, as shown above, is $23,744,567,

Now, in this case, although the court did not deduct any depreciation, I have deducted it, for the purpose of showing what must be done to bring the value down to $50,000,000. Here again, I have taken off 15 per cent, $3,561,685.

Mr. CомвS. Depreciation?

Mr. BRAND. Yes; leaving $20,182,682. I have then added back the land, less retirements, $748,182, making a total of $20,931,064. In this case, the commission allowed intangible elements of value, $1,946,281; preorganization expense, $309,000; preliminary operation expense, $30,000; total, $2,285,281. And here again, as in the case of the Washington Railway & Electric Co., in lieu of the above I add 10 per cent, since that is less, or $2,093,106; total, $23,024,170. Materials and supplies at December 31, 1927, $104,508; working cash, at one-twelfth of the 1927 operating expense, $227,853; grand total for the Capital Traction Co., $23,356,531.

For comparison with the court valuation I now add back the depreciation deducted, $3,561,685; making a total of $26,918,216. The depreciable property of the two companies together amount to $54,309,577; the total for the Washington Railway & Electric Co., as shown above, $30,002,264, plus the Capital Traction Co., $23,356,531, making a total, at 15 per cent depreciation, of $53,358,795. I then add, as I did the other day, Maryland property claimed by the companies to be worth $4,763,224, at $2,500,000 flat. And the Washington Rapid Transit Co., claimed by the company to be worth $860,000, at $500,000 flat, giving a total of $56,358,795. The excess over $50,000,000 is $6,358,795-11.7 per cent of the depreciable amount for the two street-car companies.

Hence, in order to bring the property below $50,000,000, there would have to be deducted in excess of 25 per cent depreciation on both the Capital Traction Co. and the Washington Railway Co. In other words, the property condition would have to be less than 75 per cent, and the decision of the court of appeals in the Capital Traction Co. case would have to be disregarded.

The above figures are somewhat different from the ones I put in the record the other day, although the result is approximately the same. I have worked it out probably ten times, and have always come to the same conclusion.

In only one way am I able to produce figures below $50,000,000, and that is by using the Bureau of Labor's wholesale commodity index, and by keeping the allowance for intangibles at a minimum. Doing this, and deducting 15 per cent on each company, gives $44,000,000.

Now, if I may go to the other extreme and use figures based on the Engineering News-Record index, still deducting 15 per cent depreciation, but putting in the Maryland property and the Washington Rapid Transit Co. at the companies' claims, I get about $64,000,000.

Obviously, both of these extremes should be discarded; but the mean of the two is close to the figures developed by using our average of the three closely grouped curves. This is further indication that we have probably estimated fairly well the reproduction cost, new.

I was asked the other day, Mr. Chairman, to report the stock holdings of the directors of the Washington Railway & Electric Co. The question came up after Mr. Noonan had stated that he was informed that Mr. Ham and other directors were disposing of their stock.

I have therefore prepared it in a tabular form, showing the comparison of the present holdings with those of December 31, 1926. And I will say that the figures for the present were obtained, first, from the dividend records of the company, and then, inasmuch as the last dividend was a couple of months ago, we went to the transfer agent and got it directly from their records as of April 28, 1928. Would you care to have the table read? It shows, instead of any decrease in the holdings by the directors, an increase of 205 shares. The CHAIRMAN. I do not think you have to read the items, Colonel Brand, unless some member of the committee desires to have them read. They can be inserted in the record. (The statement referred to is as follows:)

The records of the Washington Railway and Electric Co. indicate the following shares of preferred and common stock in the names of its directors as of April 28, 1928, as compared to the number reported to Congress December 31, 1926:

Mr. BRAND. I would like to refer specifically to the fact that Mr. Ham has increased his holdings, instead of decreasing them.

I was also asked to show the age of the car barns of the two companies. I have an exhibit showing that.

The CHAIRMAN. That will be inserted in the record.

(The statement referred to is as follows:)

Mr. BRAND. I was also asked to present a table showing the number and ages of cars of the two companies.

(The statement referred to is as follows:)

Age of rolling stock as at December 31, 1927.--The Capital Traction Co. and Washington Railway & Electric Co.

Mr. BRAND. There is one thing I would like to explain in connection with this table about the directors. I made the statement that Mr. Harley P. Wilson owned no stock. There are about 50 shares standing in his name of preferred stock. But the records attached to the dividend list show that he is not the equitable owner of that stock.

I was also asked to present a statement showing the places where the city street car lines had been extended. I have a list compiled from the Electric Railway Journal for the year 1927. This list only shows city lines extended, and shows the abandonments, suspensions, and net extensions for the cities only which made extension. There were other cities in which abandonments were made, but no extensions. They are not included in this list..

(The statement referred to is as follows:)

101738-28-24

Statement of track extensions and partial suspensions and abandonments in various cities in the year 1927

Mr. BRAND (continuing). Colonel Gibson asked me several questions about certain cities. It is possible that it would be better for me to talk about that while he is present. I can not give information on all of them, but I can on one or two.

Mr. COMBS. In examining this chart which you have submitted, I observe that the highest point seems to be the cost of reproduction in

1920. I see by this chart that it was then two and one-half times the construction cost in 1914?

Mr. BRAND. No-in 1920?
Mr. COMBS. Yes.

Mr. BRAND. About that, yes; as I remember the chart.

Mr. COMBS. Well this chart [indicating] shows the high point of the curve there in 1920; it is approximately 250. I just want to be sure that I was reading the chart right. Is that the significance of it?

Mr. BRAND (examining chart). That is based on the American Electric Railway Association Index. I think the high point was 257. Mr. COMBS. That means then that the property would have cost two and one-half times as much to reproduce as it cost in 1914? Mr. BRAND. It would have in 1920.

Mr. COмBS. Yes, that is what I mean.

Mr. BRAND. Yes. That is, according to the American Electric Railway Association.

Mr. COMBS. Yes.

Mr. BRAND. According to our average, it would be slightly less than 250 per cent.

The CHAIRMAN. Have you anything further to submit, Colonel Brand?

Mr. BRAND. Well, Judge Hammer asked me if I would explain what the method of depreciation used by the Interstate Commerce Commission was. I find that the Interstate Commerce Commission, in its orders of November 2, 1926, ordered the railways and telephone services to use the straight line method. Those orders, however, have been suspended, as I am informed, and the commission is holding further hearings on the subject.

I do not think there is anything else, other than those cities that Colonel Gibson wanted information about.

The CHAIRMAN. Does the committee desire to ask Colonel Brand any further questions? If not, the witness will be excused.

The Chair is advised by Mr. Hayden, who represents the Central Labor Union, that he will be unable to appear to-night, but wishes to appear at 10.30 o'clock to-morrow morning. Does the committee wish to go on in the morning with the hearings?

Mr. BEERS. I do not know that I can be here in the morning. Mr. LAMPERT. That would be agreeable to me, Mr. Chairman. Mr. COMBS. Is to-morrow the fifth day, Mr. Chairman?

The CHAIRMAN. The Chair was instructed to endeavor to close the hearings in five days. To-morrow will be the fifth legislative day; to-day is the fifth calendar day. The chair thinks that Mr. Hayden should be heard in the morning, or any one else that the committee desires to hear.

Mr. COMBS. I understand that Judge Gilbert and Mr. Gibson had both expressed a desire to hear Mr. Wilson in the morning. The Chairman. I was so informed when I came in.

Does any one else wish to be heard on this pending resolution? I understand that Mr. Clayton desired to make a further statement. Mr. COMBS. I understood Mr. Noonan wanted to be heard also. However, he has already appeared as a witness once, and I think anything else he would offer would be supplemental to that.