The Washington times., 1912-10-12
AT LAST, A DAVID IN THE FIELD.


The Arlington Light Company, little electric
concern 1n Alexandria county, is taking the field
against the preposterous merger scheme which looks
to consolidating the public service utilities Of this
District and the adjacent region. 1t is announced
that some Of the officers Of the Arlington Company
will seek to enjoin the transfer Of that companys
control to the Maryland and Virginia octopus Of hot
air capitalization, mysterious antecedents, and
aggerated pretensions.
Washington ought to feel thankful to the Alexau.
dria county people who are putting their tiny cor
poration forward as the David to meet the merger
Goliath. For several weeks, since The Times un.
covered the gigantic hodingcompany project, there
has been wonderment in this town about what it all
meant, but nothing has been done toward checking
the enterprise through any legal procedure, pending
more definite determination as to how public in
tereSts will be affected by it. If Washington can't
move to protect ITSELF it ought at least to encourage
the people who are taking up the fight, in a way,
for it.
The Arlington company makes showing that
incidentally, illustrates what's the matter with WASH
ngtons public utilities. This little concern without
even a plant Of its own to make current, buys its
Juice and then is able to distribute ii at cents
per kiowatt; here in Washington, with the business
vastly greater and more dense-circumstances that
cents. That explains why the Potomac Electric Power
Company is able to the dividends Of the Wash
in ton Railway and Electric Company which owns
its stock II explains why the manager Of the
latter corporation in order to reduce the obvious obe-
sity Of Potomac Electric dividends, deemed il fitting
to double its capitalization. And it gives very specific
illumination Of the real reasons behind the whole
merger scheme. II is a conspiracy against WASH
ngtons hopes Of reasonable charges and better
conditions in all the future. 1t is project that looks
to taking vast aggregate Of money out of the pock-
of Washington citizens and transferring it to the
yawning nav of this blue-sky monster of financial
irrigation.
The little Arlington Company foresees that ab-
sorpton by the holding company will be preliminary
to an increase Of rates. OF course. Washington
ought to see that the merger intends among other
things to put an end to all possibility Of reducing
rates in this city
Whether any legal proceeding can be inaugurated
in behalf of the people Of Washington is at presen,
under consideration in the Office Of the corporation
counsel. He has not been able to report to the
executive authority whether there has been is in
contemplation, any violation Of law. One thing is
certain and that s that IL there is law that this
enterprise violates, there ought to be- Making ducks
and brakes Of the great public utilities Of this city
with apparently no recourse for protection Of the
puDnc interest, is me SORT OF ming mat SnOulC
be ended Washington doesn't want repeti
ton of the experiences which Boston had with Ba,
State gas, years ago. This is no field for the oper
atoms Of Addickses.
There is school of academic economists win,
persist that nominal capitalization is an unimportan
consideration. They would no particular harm il
multiplying securities indefinitely, so long rate
were controlled by proper regulative authority sn
based on actual, not nominal, capital. The trouble
with this cheerful theory is very practical one:
doesn't prove out in actual experience. The fact is
and all experience in this country proves it, that
the capitalization is lacked up to some preposterou
figure, there is tendency the part of reguativ
authorities and courts to that it repres ent
> something of value. Even where there are the Ses
reguative provisions, excessive capitalization get
away with more or less swag. In a community lik
this, where there such restrictions worth while
+ the community would be at the mercy Of the mar
e ayers Of such an inflated concern
With the experience Of the gas company's fire.
gift distribution of $2600000 of certificates of II
debtedness" to its stockholders few years ago sti
before their eyes, and with the very recent doubn
of the Potomac Electric capitalization without shade
Of excuse or necessity other than to conceal
Of profits freshly in mind the people of Washingto
d should realize the danger they confront Thos
j. former jobs in diluton Of values and expansion
4 capital by the vacuum-cleaner process, ami
l. teurish and coarse compared to the one that is no
being hurried toward consummation in the hope
h beating Congress to it