Evening star., 1922-03-22

SANS CAR MERGER
Utilities Commission Writes
Senator BaII-Senator
Kings Amendment.

The passage of the proposed excess
profits tax on the street railways Of
the District, without any merger
| legislation at the present time, is
| urged by the Public Utilities Com
mission in a letter addressed today to
Senator Ball, chairman of the District
committee of the Senate.
| The letter is signed by Col. c.
Keller, Engineer Commissioner of the
; District Col. Keller says:
Col. keIIcr's Statement.
| For number of years there has
been much discussion of the best way
| to bring about merger tof the
| street railways) and little or nothing
! has been accomplished For this rca-
! son it appears wise to the commits
sion to suggest that no attempt be
| made to enact merger legislation, as
| such, but that efforts be limited to
the attempt to secure the enactment
1 of the excess profits taxation plan
as Il means of promoting more IA
/ Vorablc sentiment on behalf OF u
! merger in the minds of those
! identified with the two traction com
| panies.
|
| play. ii is believed the street railway
companies. will themselves come for
| ward with proposals of practical
| character. differing therein from tie
seneralities III which they have
/ hitherto INDUCED regarding the rnerg-
| er proposal.
| When Merger Takes Place.
| when the merger has actually taG-
| en- place. it Will be eNpedient. in r'e
| opinion of the commission, to return
| to the former plan of taxing gross re
| ceipts, as being in accordance with
| the policy of Congress and ON the
| whole offering the smallest oppor-
| tunity for depriving the public treas
| ury Of just return for the privileges
| conferred. 1t should be noted, of
course, that any gross receipts tax on
| the traction companies is. to the ex-
tent of its amount, AN addition TO the
| cost Of transportation and is there
by reflected in the rate Of fare which
| must be imposed.
| The merger bill, carrying the ex-
| cess profits tax plan suggested by
| the commission. a 50 per cent tax on
| operating income III excess of o per
| cent on the fair valuation and 10
| per cent tax on operating income IN
| excess of Z per cent return, is to-
/ day on the Senate calendar. having
been reported favorably to the Sem
ate yesterday from the District COM
mittee by Senator Ball.
| The advice of the commission aD-
| parently now is to abandon the mer-
| ger provisions of the measure and to
(! pass only the excess profits tax fea-
| ture.
kelIer's Further Statement.
| Col. Keller said further in his let
| ter to Senator Bail today:
| AT the hearing Monday it was
| urged by the representatives Of the
| Capital Traction Company that there
/ are other and better ways of pro-
! noting a merger than by excess
! f'uous to call to your notice the fact
| that when you asked for q more
| definite description of these other
ways of accomplishing this purpose
no answer was made by the witness.
As a matter of fact, the commission
| knows no way OF promoting a merger
other than to remove the inequality
| between the two traction companies,
and this can be done only by excess
profits taxation or by a separate rate
of fare for each company. OF these.
the excess profits taxation, which re-
! stores to the public in general all
! that has been taken from it over and
! above a fair return, seems the prefer
able plan.
COMMISSIONS View.
, 1.-The commission still feels. as IL
has in the past. that to permit the
Washington Railway and Electric
Company to absorb the Potomac Flee
trio Power Company before merging
with the Capital Traction Company
will remove from the two railway
companies any incentive, toward the
larger merger. since the present finan-
cial disadvantage alleged to be ex-
perienced by the Washington Rail-
way and Electric Company would by
the absorption of its subsidiary. be
completely removed, and its position
with the bankers and public would
become fully s strong as that Of the
Capital Traction Company
Col. Keller pointed out that the
principle contained in the excess
corresponding provision in the Esch
Cummings transportation act, and
that the per cent limit at which this
taxation is to begin is justified by the
! stability of the street railway bust
mess here in Washington.
| Senator King of Utah, q member of
the District committee. today intro
duced an amendment 10 the merger
bill which provides that the excess
profits tax proposed shall not apply
to money expended within the year
for extension bcttermentS. new equip
ment. the purchase and retirement OF
outstanding bonds of the corporation
or for the purchase of the franchise.
track, properties, shares or bonds .;
other corporations having franchises
for the operation of street cars with
ing the District. His amendment was
ordered to lie on the table and will be
considered when the bill is taken up
in the Senate.
rrAvTnN.c TATrcT Mnur