Evening star., 1920-03-13
DRAFTS PROPOSAL
TO RELIEVE STREET
RAILWAY SITUATION
Representative Woods Ten.
tative Bill Seeks to Induce
a Merger.

tentative draft Of Il bill to relieve
the street railway situation in Wash
inSton and TO induce I merger of the
Two companies mas been prepared by
Representative James +. Woods OF
Virginia. q member of the House Dis
trlct committee
Representative " Gods desires to get
The opinion of the street railway Of
hcIaiS. OF business men in Washing
Ton ana OF his associates in Congress
on the proposed legislation He has
no particular ambition regarding au-
thorship of the measure and is will
ing to cooperate with Chairman
MapeS ana the majority membership
OF the House District committee in
any legislation that will improve the
iocal conditions. lie is particularly
utica TO deal with the street railway
situation. because he handled the
eSai end of the Roanoke and Lynch
burg properties and has drawn many
charters Tor public utilities and for
consolidation of street railway prop
critics and other public utilities.
Features of Bills.
Representative Woods proposes as
the main features of the bill
FIRST. To permit the consolida-
ton of the Potomac Electric Power
, Company and the Washington Rail
way and Electric Company as one
company, pooling their earnings
Second. To relieve the street rail
way companies from the cost of
maintaining traffic policemen at
street intersections.
Third. To remove all legal re-
Strlctions to consolidation of both
street railway companies and to au-
, thorize consolidation by a vote of
three-fourthS of the capital stock of
each company.
Fourth. To do away with the pres
ent tax system of 4 per cent on gross
/ earnings and impose instead a ! per
cent tax on gross receipts and 50 per
cent on all earnings in excess of
per cent based on fair valuation as
determined by the Public Utilities
Commission or on true valuation as
may be determined by the pending
court proceeding.
Mr.. Woods has not written into the
bill, but is seriously considering d pro-
vision which would relieve the street
railway companies from the cost OF
street paving between the rails or on
either side.
Representative Woods feels certain
that by some such legisla ton the street
car fares can be brought back to s
cents in two years. He said that in
order to do this the government mus,
reduce the tax, but in the interests of the
people of the National Capital, composed
| mostly of government employees, he feels
certain the government will be direct.
! ~ benefited through a settlement of the
| street railway situation.
One of the features of this legislation
he believes, is to relieve the public o
paying any returns on watered stock
He believes that it is essential. first, t
| stabilize the securities of both com
panies This must be done by squeezing
1 the water out of the stock in either o.
I 1<&fS L..
| tive Woods is now gathering data t
show just what returns the government
would receive in taxes under the bill
which he proposes.
| In permitting the consolidation OF
the Potomac Electric Power Company
and the Washington Railway and
Electric Company. Representative
done. He says that the prosperity OF
| the Potomac Electric Power Company
is due primarily and directly to the
| Washington Railway and Electric
Company. Economy and production
he says. is directly due to large unit
| Washington Railway and Electric
Company. as its biggest consumer
the Potomac Electric Power Company
could not give light and power serv-
ice as cheaply as it now does Be
sides. he argues. these companies in
|
Power Company through use OF
Washington Railway and Electric
| Company capital and credit. has done
exactly what Congress told them
they should do.
Representative Woods expects
| some criticism of the franchise tax
| Of ] per cent, his bill provides. bu,
! he feels that any one owning property
in the District and getting police and
fire protection should pay something
and that this is low tax.
! In setting the rate of earnings at
per cent, before the income tax is
| imposed. Representative Woods feels
that he is safeguarding against fu-
fure court controversy. and at the
same time holding down to what is
generally recognized as minimum
fair profit for public utilities through
out the country. He quotes a Supreme
Court decision to the effect that &
per cent is not a fair profit as show
ing the possibility of court contest
If less than per cent is Set for ex-
cess earnings.