The Washington herald., 1921-02-17
DISTRICT ENGINEER
OPPOSES MERGER
: OF POWER PLANTS
Senate Subcommittee to
Report Findings on
Saturday.

Following a hearing yesterday
on the France bill providing for the
absorption Of the Potomac Electric
Power company by the Washington
Railway and Electric Company a
subcomnittee of the Senate Dis
trict Cohmittee is arranging its re-
port for1 submission to the full COM
mittee probably Saturday.
W. p Ham, president of both
companies, Robert n. Harper, presi-
dent OF, the Bankers Association
and others explained to the commit
tee the Advantages expected in ad-
,ustmcnt ofstHe finances Of the two
companies by the merger and the
prospect OLA consolidation later
with the Capital Traction Company.
COL. Charleg,,w,. Kutz, chairman Of
the Pubic Utilities Commission and
Conrad Syncirs the commissions $
counsel in pending litigation over
utiIitiesi valuations, appeared in
opposition to the merger.
The Contmi ssiOn is Of the opin-
ion. said Col. Kutz, that the acqui-
sition Of the Pepco by the w. r. &
L. will tend to retard a merger OF
the latter company with the TraC-
rion. The W..R. & E. is owner Of
the entire PepcO stock and enjoys
all the earnings Of that company.
1t is believed that the absorption
proposed in this bill is advocated in
the hope thatthe W. r. & E. may
eventually be authorized to charge
more for electric light and power
service than that service is worth
and thereby effect the difference be-
tween the earning power as a street
railway company and that of the
Capital Traction Company. If this
hope should be realized the chances
Of a voluntary merger will undoubt-
edIy be Iessened. The Public Utili-
ties Commission is strongly OF the
opinion that acquisition of the
power company should be condi-
toned upon the merger Of the rail-
way companies-that it should fol-
low the street car merger and not
precede it.
Should the Senate committee IA
vOr the passage OF the present bill"
OIL huLE SAID ne OLlllLlts OOtl-
mission recommends that the con-
solidation Of the w. r. & L. and
power companies be conditioned
upon the traction merger also, and
that an excess profits tax provision
be included in the bill.
Impossible Says Ham.
President Ham stated that the
merger of the car companies was
impossible without that of the W.
r. & E. and the Potomac Electric
PowerCompany, and his views were
briefly confirmed by Harper. Har-
per said also that banks had loaned
rnORsy on common stock of the W.
2. & z. and that this stock was
owned by many persons, among
them widows. and that any step to
improve the financial condition of
the company would be worthy. Syme
said that IL a merger is permitted
the consolidated company would go
into court and demand that it be
allowed to earn 6, or 8 per cent,
and II the earnings of the street
railway company were not sufficient
tho company would make it up on
the earnings on lighting. Before
the Utilities Commission took hold
he said, the railway company was
taking money from the earnings OF
jhr power company to help pay a
dividend
". Mex. Clayton opposed the mer-
Ger and said ne believed the people
OF the District were opposed to it
The bill was supported by Milton
Z. Allies and W. T. Galliher. Sen
atOr Capper, a member of the COM
mittee, said that il the merger was
the preliminary step toward a con-
sOIidation of the car companies its
proponents should have no objection
to making that a proviso, indicating
that this might be done in the sub
committee report.