The Washington herald., 1921-05-27
Washington Street Railways.
XVIII. THE, ,ANTIMERGER LAW.


~ make reasonable return its investment,
or on the reasonable value of its property,
is broadly called "confscation" 1t is poor rule
that is jug handle If this of the word is per-
mted, then public utilities corporation which gets
from its patrons more than reasonable return
upon its investment, the reasonable value of
its properties, confscates their money.
1t may be held then that the Capital Traction
company has been permitted to con6scate the
money OF its patrons-against its wish be it said
for the benefit OF the w. R. & E, whose financial
methods have weakened its earning ability. If this
surplus OF the Capital Traction is in turn taken
away from it by taxation, it is no less conhscation
of its patrons money, 1t is fundamentally wrong
to uphold public service corporation financially
by permitting excessive charge for service by an
other. This is exactly what the law does permit
in private business. The profits tax also is
not based upon that theory, and when so used is
misused.
. In exactly the same way if the W. R. & E was
permitted to merge the Potomac Electric and raise
the rate for electric pay its street rail-
way deficit, it would be conhscation of the money
OF the electric company patrons. The W. R. & E
openly says that this is the object it seeks in urging
such merger, while the utilities commission has
wisely refused to permit any other rate for electricity
than IS warranted by fair return on fair valua-
ton OF that company a distinct entity.
The Herald is squarely and emphatically opposed
to the merging OF the Potomac Electric, or
ever, with the W. R. & E. or with the two street
railway companies after they are merged, as they
must be. No two public utilities providing wholly
separate service the public should ever be com
bincd This is wrong in principle and nev-
itably works injury the public. Each public utif-
ity distinct service 1t is uniformly agreed that
it should have monopoly of its service. To merge
two monopolies is manifesty contrary to good pub
lie policy.
Under the present law such combination is pro-
hibited. 1t not accident that this amend
ment tackled the law. The "antimerger
law" was passed at the time and practically as
amendment Of the utilities law. 1t was introduced
by Senator La Toilette for this specific purpose 1t
is not probable that the senator has changed his
mind what is a fundamental principle. AS the
law to be retroactive it did not disturb the
ownership of the P. F. P by the W. r. & E. But
for the fact that ownership being in effect however
it would have been prohibited, and it is not
able to suppose that its continuance will be reegal
ized in the lace OF the antimerger act.
At the time this passed, the Washing
ton and Virginia holding company with an author
lied capital OF SIsooooooo, had been organized to
consolidate all the public utilities of the District as
the Washington Traction and Electric company
had combined dozen street railways and
the electric companies. The senator rendered the
District very great service by stopping this 1t is
such things which his speciality, and he is still
on the job
If it wrong, if it contrary to public
interest and right public policy to combine all the
utilities under management, and if this is still
wrong then is equally contrary public interest
to allow any two distinct services to combine or to
remain combined. Such combination leads to ex-
actly such evils as the w. R. & E. proposes in ask
ing the right to merge the P. E P. which it owns,
that it may increase electric to pay dividends
on its railways.
The antimerger law makes it unlawful for
any foreign public utility corporation, or any
foreign or local holding corporation or for any
local street railroad corporation, gas corpora
ton, electric corporation, telephone corporation,
telegraph corporation any local public utility
corporation, directly or indirectly, to own,
troll, or hold vote stock or bonds of any pub
lie utility corporation organized under any gen.
eral incorporation law special act of the
United States authorized under any law of
the United States to do business in the District
OF Columbia, except as heretofore hereafter
expressly authorized by congress; (the W. R.
& f. and P. f. P) and it shall be unlawful for
any public utility corporation organized au-
thorized as aforesaid to sell or transfer any por-
ton OF its stock bonds to any other public
utility corporation or holding corporation what
soever, unless heretofore hereafter expressly
authorized by congress so to do, and every con-
tract, transfer, agreement to transfer or as
signment by any said public utility corporation
organized or authorized aforesaid of any
portion OF its stock or bonds without shch au-
thority shall be utterly void and of no effect"
This is specific and all comprehensive Either
it should be repealed or in any merger of the street
railway corporations, the Potomac Electric Power
company should be freed absolutely from street
railway ownership or control. Either this law is
right it is wrong. Either it covers right public
policy public utilities or it does mott If it is
right if it is correct public policy then the con-
templated street railway consolidation cannot in
clude the electric service corporation