appears to have decided that in work of this sort the cost of removing and relocating the tracks should be borne by the public. In the case of the street-car tracks between the Union Station and the Capitol the circumstances especially justify the proposed reimbursement. The street-railway lines are further removed from the Capitol, and it is probable that the revenue of the companies will be reduced by the change made necessary in the extension of the Capitol Grounds according to the plan adopted in the act of March 4, 1929. It seems to be equitable that since the only purpose of the removal and the relocation is to add to the beauty of the Capitol Grounds and since the companies will probably suffer in revenue, the cost should be publicly borne as part of the general work of improvement. The street-railway companies appeared before the Commission on the Enlarging of the Capitol Grounds during the early part of this session of Congress, complained of the very heavy burden imposed upon them under the act of March 4, 1929, and urged that recoupment be authorized for the expenses of this work. The street railway companies took the position that while they would go forward with the work without resort to questions of the validity of the law, they urgently requested recoupment of the cost. Appended hereto is a copy of the memorandum of the street-railway companies filed with the Vice President of the United States as chairman of the commission. A further difficulty has developed in that the whole work planned by Congress requires the removal and relocation of a 20-inch gas main on First Street NE. The act of March 4, 1929, orders only the relocation of street-car tracks. The street-car companies can not go forward with the track work until the gas main relocation has been completed. It is necessary that the gas company do its own construction work. At the present moment the street car companies, despite their preparedness to go forward with the work in order to avoid delay of the general project are unable to proceed on account of the gas main situation. The first amendment added to the measure provides for the relocation of gas mains and other substructures with authority for recoupment of the expenses. The total cost of all of the work including trackage, gas mains, etc., will be approximately $360,000. The second amendment provides that nothing provided for in this measure shall be considered by the Public Utilities Commission of the District of Columbia, or any other public authority, as adding to the property of the companies for purposes of rate adjustment. WASHINGTON, D. C., January 15, 1981. Hon. CHARLES CURTIS, Vice President of the United States, SIR: We refer to the hearing afforded by the Commission on Enlarging the Capitol Grounds, December 8, 1930, to the Capital Traction Co. and the Washington Railway & Electric Co., through their respective presidents and counsel, regarding the cost of removal of certain existing street railway lines and their relocation, in the vicinity of the Senate Office Building. We are now informed by Mr. David Lynn, Architect of the Capitol, under date of December 17, that the commission having considered the matter at a meeting on December 11 have decided to adhere to their original recommenda tion. This leaves the matter either for the street railway companies to appeal otherwise to Congress or to consider what, if any, other action is feasible to avert the very heavy cost which the existing law charges against them. As to the first alternative of appealing otherwise to Congress, we recognize that remedial legislation must be dealt with by the Senate and House Committees on Public Buildings and Grounds in the usual method of legislative procedure. As to other measures for averting the cost imposed upon the companies, we realize that any resort to litigation to determine the validity of the impost would be protracted and final adjudication would be long delayed. We further realize that the relocation of the street railway tracks is a fundamental part of the completion of the extensive improvements of the Capitol Grounds provided by the existing law. After deliberation, the companies have determined to proceed under the present mandate of the act entitled "An act to provide for the enlarging of the Capitol Grounds," approved March 4, 1929, and the work will go forward with proper expedition on the part of both companies. In taking this position, however, we wish to point out that our primary reason is to avoid an obstruction to the progress of the work now being done and planned to be done, and the present employment of labor on the entire undertaking as scheduled. In this work, the street railway companies are confronted with a burden on their reserves for ordinary and necessary replacements of approximately $400,000. Financial programs covering necessary repairs on their street-railway systems in the District are disarranged and their capital accounts are materially affected by the removal of existing property and construction of new installation. While the Capitol Grounds act requires the removal of tracks from existing streets and avenues and the building of new tracks elsewhere, there is nothing in the act which provides express franchise rights for operation of the new trackage. All existing track is covered by charter or other authority, which creates the franchise for operation thereof. These matters involve questions pertinent to the validity of the action of Congress in section 4 of the Capitol Grounds act. We feel that we should lay before your commission and the Congress these several questions and state to you and to the Congress that, while we will proceed with the work, we do so under protest; and we wish to say that in the interest of our stockholders and in the interest of the community in the District of Columbia, as later mentioned, we shall request of Congress in due course the recoupment of the compulsory outlay when ascertained on completion of the work. We beg to request that this communication be treated as such protest and preserved upon the records of Congress as an assertion of legal and equitable rights in the premises, with a view to future request which we will make for indemnity and relief. AS TO THE PUBLIC INTEREST Street-railway companies as public utilities are entitled to a fair return upon their properties. The destruction of the street-car tracks in the area affected destroys existing property without reimbursement for the investment therein. The cost of the new construction adds to the capital investment of the companies, and consequently to the value of their property put to public use. This puts an additional burden upon the Washington public, who, under the public utilities act, are expected to pay sufficient rates of fare to furnish a fair return upon the value of the entire property publicly used. Therefore, under existing law affecting the public utilities, the total cost of compliance with the Capitol Grounds act if the companies pay for the work should ultimately be burdened upon that part of the public in the District of Columbia which employs the street railways for travel. This factor applies under normal conditions when the street-railway companies are operating and receiving just returns according to the terms of the public utilities act. AS TO THE STREET-RAILWAY COMPANIES Under conditions which have arisen since the passage of the Capitol Grounds act, the revenues of the street-railway companies, already inadequate, have been substantially reduced by competition with unregulated taxicabs. Neither of the street-railway companies is at present earning anything approaching a reasonable return on its street-railway property. Therefore, under existing conditions, the entire carrying charges on capital expenditures necessary for this work must inevitably come out of the pockets of the shareholders. As illustrative of this element, the Capital Traction Co., owned in large part by its shareholders, has been compelled within the past two years to reduce its dividends, first, from $7 per share to $6 per share, and later to the present rate of $4 per share. The stock of the Capital Traction Co. is widely distrib uted in this community; a very considerable part thereof has been held for one or more generations by the same families, and there are substantial holdings in trust funds for charitable institutions, such as the Louise Home, the John Dickson Home, and various orphanages and hospitals. The reduction of dividend rate on this stock has reduced the incomes of these institutions. The charging of the cost of the Capitol Grounds reconstruction to the street railway companies under the requirement of this act means further reduction in the net income, and therefore in the amount available for dividends to shareholders. It is pro tanto a charge against them under existing and immediately prospective conditions of street railway operation in the District. AS TO THE LEGAL ASPECTS We have earlier stated that the companies have considered their legal rights under section 4 of the Capitol Grounds act but have decided to proceed with the work in spite of the impairment thereof. We call your attention, however, to these legal elements. Section 4 of the act is as follows: "(a) It shall be the duty of any street railway company, the removal of whose tracks is necessary under the plan of the proposed development, when so requested in writing by the Architect of the Capitol, to remove any of such tracks, to repair and restore the space vacated, and to relay such tracks on the streets designated, as may be directed by the Architect of the Capitol, the total cost thereof to be borne by said companies. "(b) Whenever, in carrying out the provisions of this act, it becomes necessary to change the grade of any street occupied by the tracks of any streetrailway company the company shall adjust the grade of such tracks to the new grade of the street, the total cost of such adjustment to be borne by said company.' By section 1 of the act the following removals and replacements are required: SECTION 1. * * * (3) "Closing of C Street to vehicular traffic between New Jersey Avenue and Delaware Avenue, and removal of street-car tracks from C Street and relaying them in a depression and subway between New Jersey Avenue and Delaware Avenue, and extending the street-car tracks on C Street from Delaware Avenue to First Street NE.; "(4) Removal of street-car tracks from Delaware Avenue and B Street (including the spur extending from Delaware Avenue into the Capitol Grounds) and relaying them on First Street NE.; * * * "" In compliance with these paragraphs, trackage is removed from existing streets and avenues and replaced away from any existing street and on a street not now occupied by street-car tracks. The alterations will add nothing to the revenue production expectation of the companies, but, on the contrary, by removal of track lay-out to a farther distance from the Capitol and the depression of part of the tracks, the alterations create an expectancy of less revenue by making the use of street cars to reach the Capitol less desirable, particularly under present conditions of unregulated taxicab operation to the very doors of the Capitol and Senate Office Buildings. The original charter provisions of the two companies in the District of Columbia governing adjustment of trackage do not extend to, nor place any obligation such as is contemplated by the legislation above quoted. For instance, the original charter of the Metropolitan Railroad Co., one of the underlying charters here involved created by act of Congress, approved July 1, 1864, contains the broadest charter obligation in this regard of the several company charters in the District of Columbia, as follows: "That nothing in this act shall prevent the Government at any time, at their option, from altering the grade or otherwise improving all avenues and streets occupied by said road, or the city of Washington from so altering or improving such streets and avenues and the sewerage thereof as may be under their respective authority and control; and in such event it shall be the duty of said company to change their said railroad so as to conform to such grade and pavement." It will be noted that the obligation of the company is only to conform its trackage to new grades made necessary by alteration or improvement of streets and avenues and the sewerage thereof by the Government. This charter requirement involves only change in grade and not in alignment of trackage. The burden imposed on the companies by the Capitol Grounds act is to remove all trackage within certain existing streets and avenues and to rebuild entirely off any street in part and in part within a street not presently occupied by trackage. We assert, therefore, that there is no charter obligation which compels the assumption of these heavy costs by the companies. ACTION OF CONGRESS IN OTHER AND SIMILAR TRANSACTIONS Following the enactment of the Capitol Grounds act Congress passed the George Washington Memorial Boulevard act, approved April 3, 1930, in which the following provision was made: "No part of the construction costs incurred by the Secretary of Agriculture in carrying out the provisions of this section shall be charged against, or be paid by, the District of Columbia or the street railway company operating cars on said bridge." This boulevard passes under the south end of the Highway Bridge and the removal of the two south spans of that bridge and their replacement by an abutment and underpass have necessitated a large expenditure of money. Congress realized that the burden of this cost should not be placed either upon the District of Columbia, which owns the bridge, or upon the street railway company, whose tracks were removed and replaced. We point out that there is no distinction in fact, policy, or equity in the two cases. Yet Congress has assumed the burden in the one case and imposed it on the street railway companies in the other. We respectfully state that this constitutes arbitrary discrimination. We urge upon Congress the higher equity in our favor in the Capitol Grounds situation because existing property is of necessity destroyed entirely, replacement elsewhere in a less advantageous location is required, and the companies are affected not only in existing property but by a reduction of prospective revenue. We further point out that the cost of rebuilding the steam railroad embankment south of the Long Bridge has been assumed by the Government and all cost to the railroad company of temporary trackage, culvert construction and rebuilding of tracks has been indemnified from the Public Treasury. In the extension of the Capitol Grounds, however, Congress has seen fit, where only the interest of the Nation in the Capital of the United States is concerned, to impose the entire burden of removal and reconstruction of street car tracks upon the street railway companies alone. Congress authorized by section 6 of the Capitol Grounds act the appropriation of $4,912,414.00 to enable the Commission for the Enlarging of the Capitol Grounds to carry out the provisions of the act. Every person owning a dwelling house, land, or other property in the area affected has been or will be recouped from the Public Treasury for any damage this public improvement imposes upon him. Only the street railway companies are impressed with the burden of sacrificing property and going to additional expenditure to further this public project. All others are reimbursed from the Public Treasury. CONCLUSION The companies will, as first stated, proceed with the work imposed upon them and will defray the expense as the work proceeds, but they do this under protest and only because ascertainment of their legal rights would necessitate delay which would interfere with a great public undertaking and interrupt the present employment of workmen in a time of general unemployment. The companies proceed upon the theory that Congress will in due course award to the companies the just treatment which has been accorded elsewhere in similar situations. Legislation is pending in Congress directing the Public Utilities Commission to reduce street-car fares for school children in the District of Columbia. The enactment of such legislation will materially reduce the current revenues of each company. We feel warranted in mentioning the fact that the street railway companies now pay the salaries of crossing policemen, maintain at constantly increasing cost the pavements between their tracks, and other paving in addition, the wear and tear of which is largely augmented by the very taxicabs and other unregulated carriers whose competition depletes the companies' revenues. We are always subjected to heavy expense of renewals due to the costly underground electric conduits that the beautification of the National Capital requires. The companies in addition pay heavy taxes on their gross receipts, while their unregulated competitors using the public streets pay no such taxes. We feel that the companies should receive relief rather than be subjected to charges such as we now protest. This illustrates the burdens which the street railways of the District of Columbia are compelled to assume for the service of the community, hoping ultimately only that their operations may bring a fair return under the public utilities act to their properties and the owners thereof. We say finally that the requirement of the Capitol Grounds act imposes substantially 8 per cent of the entire cost of the Capitol Grounds extension not upon the Nation, for whom the entire work is being done, but upon our two street railway companies directly and upon the patrons thereof indirectly. We go forward with the work in anticipation that Congress will in due course award relief to the companies therefor. Respectfully, THE CAPITAL TRACTION Co., By J. H. HANNA, President. WASHINGTON RAILWAY & ELECTRIC CO.. By WILLIAM F. HAM, President. CHANGES IN EXISTING LAW In compliance with paragraph 2a of Rule XIII of the Rules of the House of Representatives the following is submitted: PARTS OF EXISTING LAW AFFECTED BY PARTS OF BILL AFFECTING EXISTING THE BILL Section 4 of the act entitled "An act to provide for the enlarging of the Capitol Grounds," approved March 4, 1929: "SEC. 4. (a) It shall be the duty of any street-railway company, the removal of whose tracks is necessary under the plan of the proposed development, when so requested in writing by the Architect of the Capitol, to remove any of such tracks, to repair and restore the space vacated, and to relay such tracks on the streets designated, as may be directed by the Architect of the Capitol, the total cost thereof to be borne by said companies. "(b) Whenever, in carrying out the provisions of this act, it becomes necessary to change the grade of any street occupied by the tracks of any streetrailway company the company shall adjust the grade of such tracks to the new grade of the street, the total cost of such adjustment to be borne by said company." LAW Provided, That upon completion of the work required under paragraphs (a) and (b) of this section all of the cost borne by said companies shall be reimbursed to said companies from the appropriation authorized in section 6 of this act, or such additional appropriation or appropriations as may be made to carry out the provisions of this act: Be it further provided, That any underground gas mains, telephone and telegraph conduits or other installations necessary to be removed and relocated shall be so removed and relocated by the owners thereof and the cost thereof be likewise reimbursed from said appropriations: Provided further, That nothing herein provided for shall be treated as adding to the value of the properties of the companies put to public use for the purpose of rate adjustment by the Public Utilities Commission of the District of Columbia or any other public authority. |