The Washington herald., 1921-07-04
WOULD TAKE OVER
w. r. E. E. TRACKS
SAYS Commission Plans
Merely to Protect Weak
Company.

DuI necessary
This statement was made yester'
day by Samuel Russell, WesterI
attorney, upon his return from Vir'
ginia where he has been engaged II
a survey of a section OF one Of th'
Southern railroads.
Admitting that Congress canno
directly compel a consolidation. i
can order the distribution of tn,
Potomac Electric Power company
stock to the shareholders of Tho
| washington Railway and Electric
Company, thus separating the rail
way company from the power com
pany and reducing the w. r. E
to a naked railway property" Rus
sell insisted.
Pepco Stock Pledged.
The performance and earnings o.
the railway company may then b'
observed and ascertained. But thu
lawyers say that the common stocl
of the Potomac Electric Power Com
pany is pledged to secure the bond.
of the Washington Railway ant
Electric Co. and they apparently
depend upon this to prevent a dis
tribution.
TT would be a very simple matter
for a court of equity to enforce the
act OF Congress, to issue a mandate
that the shares of the Potomac Elec-
trio Power Company be distributed
In the stock books of the corpora
ton, and such distribution would be
effectual for the exercise OF voting.
n Hat II
shareholders.
Could Remove Liability.
The court might order that a
mortgage on the P. z. p. property
supplant the pledge of the shares,
and thus release the certificates to
the shareholders, or the Instrument
pledging the shares might have the
legal effect of a chattel mortgage
upon the shares which upon rec
ordation will be, valid without the
actual possession of the stock GER
tificates by any trustee for the
bondholders- Moreover, the liability
of the p. Z. p. for the bonds of the
w. r. & E. is merely a secondary
liability and with the liquidation
of the w. r. & E. this liability would
be removed.
Second, suits should be COM
menced against the directors and
stockholders of the W. r. & E to
recover for the railway treasury the
moneys distributed to stockholders
apparently in violation Of the law
requiring the maintenance of de-
probation reserves.
should Reduce Fares.
be reduced to four tickets for Is
cents. The franchise contracts call
for cent fares, and in any view
of the case a fare of 6A cents is a
reasonable fare on street cars in
the District of Columbia.
Fourth, the Commission should
see to 1t that the revenues of the
W. r. & E. are applied, first, to op-
eratfons and maintenance; second,
to the reserves required by law, and
third, to interest on the company's
bonds.
Fifth. the Capital Traction serv-
Ice should be extended from the
Union Station to the Treasury
through G street and to the public
institutions not reached by the Cap
ital Traction Company, and over
other tracks of the w. R. & E. as
required by the public convenience
and the facility Of passenger transit
in the District.
Treasury Connection Important,
The connection between the
Union Station and the Treasury ia
the most important single connec-
tion in Washington. The route
through G street should be exclu-
sively for the Capital Traction Com
pany and the w. r. & E. should
reach the Union Station through H
and North Capital streets. This is
the very first thinfi that should be
done to improve the street car serv-
ice in this city. Section of the
public utilities law gives the COM
mission ample powers to make this
arrangement.
If these things be DONE" insisted
Russell, "and they are all within
the law and the Constitution, we
may then confidently await the day
of the default of the w. r. & e.
bonds and of foreclosure and sale
of the w. r. & E. property sans
stock. bonds and securities, notwith-
standing the fact that this outfit
has said to itself that II will pay
interest on it's bonds. and that there
viii be no foreclosure, and no merg-
er except on its own terms.
Can Take Over Tracks.
TN the meantime the Capital
Traction will have taken over what
1t wants of the tracks of the other
company, as authorized by Section 3
of the public utility law. There are
many tracks and much equipment
of the w. r. & E. that no real rail-
road would want at any price.
1T there had been no Public Utili-
ties Commission in the District of
Columbia the W. r. & E. would long
since succumbed to a receivership
and foreclosure. The commission
has apparently been intent only on
the W. r. & e. from the
competition of the Capital Traction
which Is not only an Illegal but
an immoral thing, when viewed
from any standpoint of the public
interest and rights Russell de-
clared. M
Says Surgery Ii Needed.
THE Commission has made no
use whatever of it's power under
Section 3 of the public utilities law,
TO improve the service and to facili-
CONTINUED ON PAGE TWO.