As previously stated, these figures represent the claims of the comnies. They have not been checked as to computation, but agree osely with similar computations made by our accountants, as far property in the District of Columbia is concerned. It seemed tile to merely check their computations, and accordingly I used a ferent method.

A number of trend curves were examined and certain ones were ected as varying too greatly from the others. For example, the gineering News-Record curve was higher than all the others. e Bureau of Labor wholesale commodity index was considerably ow a group of others which agreed closely. Also the court of Deals rejected this index as being inapplicable. An average of ee closely agreeing curves was adopted. The greatest deviation m the average of the trends combined to make the average was er cent in 1920, the year of highest costs. I present as an exhibit curves used; and the two following tables for the two companies e prepared from these curves.

The statements referred to are as follows:)

LE No. 1.-Washington Railway & Electric Company (District of Columbia)stimate of cost of reproduction of physical property as of December 31, 1927

TABLE NO. 2.-The Capital Traction Co. (District of Columbia only)—Estimate of cost of reproduction of physical property as of December 31, 1927

The total figures shown on these tables represent an estimate of the reproduction cost new of physical property, exclusive of lands, materials, and supplies and working cash.

Taking first the figures so determined for the Washington Railway & Electric Co., showing the total reproduction cost of physical property, as above, $30,565,010; I deduct 15 per cent for depreciation, amounting to $4,584,752, showing a depreciated reproduction cost of $25,980,258. I then add back the land, which was found by the commission to be worth, as of July 1, 1914, $830,598, less the retirements of a portion of that land, $11,209, making the net amount, $819,389, making a total value of physical property, $26,799,647. The commission allowed intangible elements, $2,321,439; preorganization expenses, $341,500; preliminary operation expense, $35,500; total, $2,698,439.

These figures are those allowed by the commission as of July 1, 1914. The present practice tends toward including all these under one heading as "Going concern value." Ten per cent is usually allowed, and since 10 per cent is slightly less than the above, add, $2,679,965, making a total of $29,479,612, to which must be added materials and supplies at December 31, 1927, $204,937, and onetwelfth operating expense for 1927 as an allowance for working cash, $317,715, making a total for the Washington Railway & Electric Co. of $30,002,264. Then for the Capital Traction Co. the reproduc

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. COMBS. 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.