The Washington times., 1913-03-06
THE ANTI-MERGER ACT.

The ant-merger measure by Senator La Follett
is now the law of this District 1t is direct and dras
tic beyond the realization of most citizens. 1t for
bids any local foreign corporation to own, hold,
vote the securities of any public utility corporation
in the District without express authority OF Congress
On application of either the District or the Nationa
Government, the District Supreme Court mas au
thory TO dissolve any utility corporation violating an
of these provisions The court can order any cor
poration thus holding securities to dispose of them
and to refrain from voting them.
The one exception is that it must be shown tha
foreign corporations ownership in local com
pany equals 20 per cent of the latter's stock 1ni
is necessary in order that corporations may deal il
these securities in the ordinary course of business.
This drastic measure is the law right now Ever.
provision in it is made an independent one, so tina
the finding that any one of them is unconsttutiona
shall not affect any other.
1t is well-nigh impossible to calculate how far
reaching the effects of such may be. There
will be litigation it is promised to determine all that
The Potomac Electric Power Company's stock is
all owned by the Washington Railway and Electric
Company. 1t will have to be disposed of.
The Washington Gas Company owns large par
of the stock of the Georgetown Gas Company. Tina,
ownership will have to end.
The Washington Utilities Company lately or.
ganzed holds considerable share of the capital OF
the Washington Railway and Electric Company Prob.
ably the proportion is under 20 per cent But
whether it snail be compelled to dispose of what II
now holds the ant-merger act makes impossible for
it to accumulate anything like controlling holding
The status of the local telephone business pro-
poses an interesting question. The Chesapeake and
Potomac Telephone Company is dominated by the
Bell Telephone Company which in turn is controlled
by the American Telephone and Telegraph Company
There is possibility of argument whether the new
law applies to this combinaton but so far-reaching
and unqualified the provisions that it seems alto
gether likely even this holding arrangement may be
held improper.
But this is not all. The Washington Railway and
Electric Company is itself holding corporation, as
it stands today. Whether it continue in control
of the various properties it now operates is ques-
ton on which there is room for serious discussion.
In order to make measure of this kind inclu.
sive enough to stop wrongs which have lately been
threatened it is possible that very embarrassing
results may follow, affecting ,reorganzatons here
tofore effected The constitutional question arises
here but as District charters have always been made
subject to alteration or amendment by Congress- il
doubtful if the constitutional provision will nullify
the new act AT any rate, if any local corporation
finds itself confronting difficult complication it can
blame only the excesses which its managers have
recently attempted.
The Times mas repeatedly protested that there
ought TO be series of consultations in this town
and the new law may finally open the way for these
to be effected There ought not to be two gas
panies There should not be two street railroad
operating concerns The juggle of ntercorporate
relationships which is made possible by of the
Washington railway ownership of the Potomac Elec-
trio Company has led to conditions which almost
defy the best accountants to determine the actual
condition of particular properties. The Potomac
Electric Company, subsidiary of the Washington
Railway Company, sells power to other subsidiaries
of that railway company, at prices which have been
regarded as excessive The net result is that ex-
cessve operating costs are piled up for the public
to paw Nothing short of a logical and economic
readustment of all these relationships with the
pupIics interest in view, bring order out of this
chaos.
The public utilities commission measure like
wise is now law. 1t provides the way to safe and
reasonable consolidation of public service interests.
That consolidation ought to be brought about Pres
ent conditions in Washington are anomalous and
these two measures, taken together, promise to rem
edy them.
Not the Same Thinu