Evening star., 1920-01-10
ID. c. CAR TAXATION
BILL STRENGTHENS
HOPES Of MERGER
Proposed Changes Believed
Favorable to Practical
Basis of Agreement.

yesterday providing for changes in the
fern of taxation of the street railways
will. i enacted, bring the Capital Trac-
| tion and the Washington Railway and
Electric companies closer to a merger
than they ever have been.
They base their belief on the fact
| that the changes in taxation and other
relief provided for in the bill will so
increase the earning. power of the
Washington Railway and Electric
Com pany as to bring it's exchange
value close to that of the Capital TFac-
tion Company.
| 1t was pointed out today that one of
| the biggest stumbling blocks to a
merger has been the wide difference in
earning power of the two companies.
At present the companies must pay a
tax of per cent on gross receipts. 1t
was estimated today that under the
present rate of fare the annual tax of
the Washington Railway and Electric
Company would run as high as $220, 900
Result of New System.
The bill sent to Congress yesterday
would abolish this and require that the
companies pay tax only on income
above per cent return to the stock
holders. Since the Washington Railway
and Electric Company, even with Z
cent fare, would not be likely to earn
more than per cent return above
operating expenses, it would practically
be relieved of taxation.
In addition it would be relieved under
this bill of paying about $4,000 year
IN salaries to crossing policemen.
William r. Ham, president of the
Washington Railway and Electric Com
pany, returned to the city this morning
from Cleveland and had not read the
proposed legislation.
He renewed the statement that the
Company is in favor of d merger if
one can be brought about that will
do justice to its security holders.
George L. Hamilton, president of
the Capital Traction Company, could not
be reached this morning.
Mr.. Ham again called attention to-
day to the fact that the Washington
Railway and Electric Company is in ur-
gent need of additional revenue, and
said that his company would need i'm
mediate relief regardless of the possi-
bilities of merger later on.
Studying COmpany's Figures.
Engineer Commissioner kutz stated
that the commission is studying the
figures of the Washington Railway
and Electric Company of earnings un-
der the present rate of fare before
fixing date for hearing on the
application for 7-cent fare
1t was learned from reliable
source several days ago that another
attempt to bring about a merger
would be made within the next two
months. 1t is possible that the send
: ling of the Commissioners bill to
Congress yesterday will strengthen
this effort.
At any rate the feeling was general
today that the Utilities Commission
has definitely interested itself in the
endeavor to effect consolidation,
opening the way for a merger on a
possible in the past.
Text Of the Commissioners' Bill.
The bill. as drawn by the Commits
sioners follows:
Be it enacted by the Senate and
House of Representatives of the Unit
ed States of America, in Congress
assembled: That that part of section
OF tne act OF Congress approved July
/. 1902. and all other laws which i'm
pose a tax of A per centum per annum
upon the gross receipts of street rail-
road COMPANIES incorporated by spe-
clal acts of Congress and now en-
gagged in street ra,rway traffic in the
District of Columbia, be and the same
are hereby repealed. effective June
30, 1920; and that beginning July 1.
1920, all said street railroad COM,
panles shall pay per annum to the COL
lector of taxes of the District of
Columbia a graduated tax as follows:
Upon operating income in any year
in excess of per centum and not ex-
ceeding per centum of the fair value
of the property of each company used
and useful for street railway purposes
within the District of Columbia as as
certained by the Public Utilities Com
mission of the District of Columbia
under the provisions of section s of
the act of Congress approved March
4. 1913 (37 u. s. Stats, p. 974). tax
of SO per centum. and upon operating
income in any year in excess of per
centum upon said fair value a tax
OF IS per Centum,
Cooperating Income, Defined.
The term operating income" as
used herein bears the meaning now
attached to it in the uniform system
of accounts for electric railways as
prescribed by the Interstate Com
merce Commission, but it's component
elements. accounts Nos. 201, 202,1 203
and 304 shall include only revenues
and expenses properly ASST gnabfes TO
street railway operations within the
District of Columbia as determined
by the said Public Utilities Commits
sion, and from account No 215 there
shall be excluded the tax herein pro-
The said tax shall be based upon
the operations of each calendar year.
except for the calendar year 1920, in
which it shall be based upon the
operations of the last six months of
that calendar year. On or before
railroad company, through it's presi-
dent, shall make affidavit to the board
of personal tax appraisers of the Dis
trict OF Columbia as to the amount of
it's operating income for the preceding
calendar year, aseertained IN the
| manner herein provided. On or before
May ! of each year each of said
companies shall pay to the collector
of taxes of the District of Columbia
on such operating income the taxes
herein provided. These taxes, when
paid to the collector of taxes. shall be
deposited by him in the Treasury of
the United States as a separate fund.
to be known as the street railway
contingent fund.
Tax Collections Provision.
All taxes levied under the foregoing
provisions of this section shall be COL
lectfb1e as are other personal taxes;
and each such railroad company and
its president shall be subject to the
| sam penalties for failure to make the
affidavit above provided for within the
time prescribed, for making q false
afhdavit and for non-payment of said
! tax as are now provided by the per-
| sonal tax law Of the District of Co
| lumbia: and all common law remedies
,, shall be open to the District of CO.
ium bia for the collection of such tax.
The said street railway contingent
| fund and all accretions thereto shall
! be employed or expended by the said
Public Utilities Commission in fur
| therance of the public interest in
| street railway transportation within
the District of Columbia. either by
| chase of additional street cars to be
used by street railway companies
wherever the public interest may re-
Quire, or by way of loans to street