Evening star., 1921-05-20
Continued from First PageD

sion We have had. regarding the pro.
posed plan of merger submitted tt
YOU by the Capital Traction Company
for the merger of its properties with
those of the Washington Railway
and Electric Company and the Pc.
tomac Electric Power Company. we
deem it appropriate to state for you,
guidance our position. as follows:
In event of merger the Capita
Traction Company demands absolute
so!idated company.
The properties of the Capita
Traction Company. on the basis OF
valuation used by the Public Utili-
ties commission. represent about
S16.0O0.O 900. while those of the Wash
tomac Electric Power companies ag-
gregate approximately $4,000. 600.
The combined properties would.
therefore. represent values of about
S'6.O0O.000. Under what view of pro-
priety it is urged that a S16.o0o.oo0
property should control s56.O0o. 900 it
is difficult to understand. Yet the
proposal of the Capital Traction Com
pany requires in effect that the
Washington Railway and Electric
panies should turn over $4,000. 900
in property to their uncontrolled dis
cretion. This board would be rec
reant to its trust if it entertained a
suggestion so obviously one-sided.
and one our stockholders would not
and should not agree to.
"1f the sole object to be attained
is. efficient and public-spirited man.
aeement there should he little diff
Guilty in agreeing upon a plan for the
operation of the properties in the
interest alike of the owners and the
public. The dominant control. how
ever. by 80 per cent minority inter-
est. to the practical exclusion of A
20 per cent ownership and the rights
inherent in it. is repugnant to every
sense of right and justice.
THE Washington Railway and
Electric Company has repeatedly ex-
pressed itself not only willing, but
in favor of merger OF the several
companies because it believes that
the best interests of the public and
the companies would be served by so
doing. That is the position of this
company al this time. 1t will assent
10 and assist merger upon any
basis that is fair and reasonable and
which will! afford us a reasonable re-
turn upon the fair value of our prop
critics.
The terms and basis proposed by
the Capital Traction Company for the
issuance of new securities by a con-
sclidated company are not in any,
wise acceptable. as they grant un-
fair advantages to the Capital Trac-
defensible extent the assets of our
properties and deprive US of rea-
sonable return upon the fair value
thereof
Lease SugEested.
For the purpose Of solving. if pos
sible. the difficult questions involved,
and having due regard for the fair
values of all properties concerned and
the fair returns that should be en-
1oyed from them we submit for your
+: :ueeestion to the committee of con-
ferees that the Washington Railway
and Electric Company (into which
should be merged the Potomac E!ec-
trio Power Company is willing, pro-
vtded Congress passes the necessary
enabling legislation. and that such
legis' alton will also provide proper au-
thority for permanent financing for
the future growth of the consolidated
company. to
1tal Traction Company at a rental of
$4,000 per annum for a long period
of years. and in addition. pay interest
on bond Indebtedness not in excess of
the present charge. maintain the
properties and set aside sufficient
sums for depreciation according to
fair rates of depreciation to be pre-
scribed and enforced, if possible. by
the Public Utilities Commission: or
instead. if desired.
The Washington Railway and Elec-
trio Company will agree to merge and
record to the stock of the CAPITAL
Traction Company the same privi-
leSes enjoyed by the preferred shlre-
holders OF the Washineton Railway
and Electric Company; that is to saw
each to have preferred dividen6x =,