The Washington times., 1921-08-05
CHANCE CAR LINES
WILL Be MERGED
APPEARS REMOTE
CONTINUED From First Pase)

Continued From First Page)
100000 of property value belongs to
the STOCKHOLDERS of the Capital
Traction, and that only about ONE
FOURTH of the $40, 200, 000 of prop
erty value Of the Washington Railway
and Electric belongs to ITS stockhold-
ers. because the bis-bulk of its prop
erty is subject to first lien by the
BONDHOLDERS.
However, that doesn't prevent the
w. r. 4 z. feeling resentful at the
Capital Traction desire to control. Its
officials say further:
III the sole object 20 be attained is
efficient and philosophical manage
ment there should be little difficulty in
agreeing upon a plan for the operation
OF the properties in the interest alike
OF the owners and the public. The
dominant control. however. by a 80 per
cent minority interest to the practical
exclusion of 20 per cent ownership,
and the rights inherent in 1t. is re-
pugnant TO every sense of right and
Justice"
Having got rid Of its feelings over
the Capital Traction plan. Washing
ton Railway and Electric submits a
merger plan Of it's own, or rather.
three merger plans. 1t says: III
I'VE Will lease all the properties Of
the Capital Traction Company at q
rental of $4,000 per annum for a
long period of years. and. in addition
will pay interest on bonded indebted
ness not in excess Of the present
charge"
1t offers, in addition, to maintain
the properties and set aside whatever
Is prescribed by the commission for
depreciation.
Offer. SAN 0o0 R.rt,I
That figure OF $40 900 would give
Capital Traction stockholders per
cent on their $4,000, 900 OF common
stock. II the company accepted the
proposition 1t would mean that. for a
long time. its stockholders would sit
back. be relieved of worry. forget
street car operation. and draw per
cent. 1t would also mean, of course.
that they couldn't draw any more than
seven during the life of the lease, no
matter how much money the lines
made. And 1t would mean, further,
that in the meantime the w. r. & e.
would run the Capital Traction
system.
The Capital Traction bond interest
which the w. r. & e. would have to
pay wouldn't be serious. as Capital
Traction interest charges on bonded
debt now are only $2S0,000 a year,
against 81 .392,0 900 for w. r. & E.
The second proposal Of W.'R. e.
Is as follows:
ITO merge and accord to the stock
of the Capital Traction Company the
same privileges enjoyed by the pre-
ferred shareholders of the Washington
Railway and Electric Company: THAI
IL to say. each to have preferred
dividends at the rate of per cent per
annum, with second preference as
| to dividends to the stock of the Capital
Traction Company at the rate of per
cent per snnum; the common stock OF
the Washington Railway and Electric
| Company to be converted into the
same number OF shares as at present
of common stock, without par value;
and both preferred and common to
have voting power"
This would mean that out OF net
earnings. after paying bond interest,
taxes. etc. the $4,000, 900 of Capital
Traction stock and the $500, 900 of
Washington Railway and Electric
preferred stock would draw per
cent, or, IL the consolidated company
didn't make that much, their pro
rata share of 5 per cent. IL would
mean, further, that II there was any
met after paying the 5 per cent on
both, the Capital fractions si2 900 :
coo would get the next per cent.
Anything above that would be paid
out as dividends on the Washington
Railway and Electric common stock.
Would Give w. X. & f. Control.
| The provision that all stock have
equal voting power would give the
Washington Railway and Electric
control of the merged company by
the difference between its total of
! S15,000,000 Doth preferred and COM
NOM and the Capital fractions s12.-
! 100000 This would (mean that
Washington Railway and Electric