Evening star., 1922-05-31
SENATORS STUDY
TRACTION MERGER
Ball Favors Forcing Combine
if Such Step Is
Necessary.

Senator Ball. chairman of the Dis
trict committee. will give careful con-
sideratiQn to the opinion OF the cor
poration counsel. F. H. Stephens, to the
effect that the Washington Railway and
Electric Company and the Capital Trac-
tion Company now have authority to
merge ii they desire to do SO. Senator
Ball said today that he would take the
matter up with his committee, which
has recommended legislation to author
ize a merger.
Senator Jones Of Washington, a men,
Der OF the District committee, said that
he had been much interested in the opfn-
ion OF the corporation counsel and that
ne thought the companies should merge.
af they have the authority. Otherwise
he said, Congress should take steps to
compel merger. He added that he was
in favor of the proposed excess profits
tax plan to aid in compelling a merger.
Officials of the Washington Rail-
way and Electric Company do not
agree with the opinion of Corpora
tion Counsel Stephens that the trac-
tfon" lines of the city could merge
today without special legislation
from Congress.
Position of Lines.
This was clearly indicated today by
William F. Ham, president OF the
company, discussing Mr.. Stephens
opinion, published yesterday. Mr..
Ham expressed the belief that even
If the anti-merger law Of 1918 was
repealed there still would be serious
obstacle in the way of consolida-
ton, namely, of reaching terms that
would be agreeable to all stockhol-
ders.
The president of the Washington
Railway and Electric explained that
there are 1000 stockholders in his
company and about the same number
in the Capital Traction Company.
1t is his opinion that If merger
should be attempted now between the
Washington Railway and Electric
and the Capital Traction Company
and one of these stockholders should
be dissatisfied with the terms he
could go into court and tie up con-
summation of the deal.
In the act which gave the Washington
Railway and Electric authority to take
in the Independent lines which now make
up that system it was provided that the
consent of three-fourths Of the stock
holders would be sufficient on which tc
effect a deal. That law defined how the
unwilling stockholders, if there were
any, could have their stock valued by
the court and paid for on the basis fixed
by the court
But, Mr.. Ham points out, that Law
specifies the lines which might be taller
over in that manner by the Washington
Railway and Electric. 1t is his conten.
ton that similar law, defining the
rights of the stockholders of the Wash.
ington Railway~>an Electric and the
Capital Traction companies. is necessary
before a merger could be successfully
accomplished between the two big sys.
TENS. Those rights are defined in the
bills now pending in Congress to au.
thorize a consolidation, Mr.. Ham said.
Mr. Ham also presented this angle
Of the situation. A merger means re-
financing the two companies, and, he
said, no financial concern would &C
into the handling of securities Of g
merged company if there existed the
slightest doubt as to the legality OF
the merger.
John H. Hanna, vice president OF
the Capital Traction Company. said he
could not discuss the legal merits OF
the question. 1t is understood, how
ever, that officials of the Capital
Traction Company have likewise been
If the opinion that special authority
rom Congress is necessary before a
.merger could be brought about.