The Washington herald., 1922-03-21
PUNITIVE, UNFAIR,
AYERS HAMILTON
Tells Senate District
Committee Plan Is
Not Legal.

George L. Hamilton and Vice Presi-
dent and General Manager John II.
Hanna, who testified, favored the
bill authorizing a voluntary mer-
ger, but not the tax.
William +. Ham, president Of the
Washington Railway and Electric
Company, spoke In favor of the vol
untary merger. Charles Sheldon, jr.,
OF the Washington and Maryland
Railway Company. urged absorption
of that company in a merger, citing
the benefits to the public of its
transfer.
Doubts Fare Reduction.
Charles J. Columbus. representing
a joint committee of the Board of
Trade, Chamber OF Commerce and
other civic and commercial orEani-
zaions: a. f.. Seymour, secretary Of
the Washington Chamber OF Com
merce and Evan II. Tucker, repre-
senting the Northeast Washington
Citizens Association. spoke on the
needs of a merger. Engineer Com
missioner Keller gave the views of
the Utilities Commission, which he
said were unanimous in favor of a
merger as being n stroke for econ
omy and better car service.
~ 10 utl iNtiN
would bring about a reduced car
are" said Mr.. Hamilton. because
there would be very little saving,
the companies at present operating
comparatively. There has been a re-
duction in fare amounting to
S350.000. and the companies could
not stand further reduction. This
proposed tax is not meant for tax
purposes. but seeks to compel a
merger. 1t is an excess profits tax.
the day for which has passed and
the principle of which has been re-
nounced by Congress"
Bail Attacks Company.
Senator Ball. chairman OF the
committee. said that with one COM
pany 1t was thought the rates would
be fixed by the Utilities Commits
sion in a way that would be fair to
the companies: that the merger was
a public demand and that the tax
aimed only to improve the trolley
conditions. He told the Capital
Traction president that his conf
pany mad no right to net returns
Of 10 to IL per cent. as it enjoys
at present, and that such money
was taken unfairly from the peo-
pie and should be given back.
Mr.. Hamilton said his company
was entitled TO at least an s per
cent return. which. he said. is no
more than it receives at present,
II considered from the standpoint oF
fair valuation. In case of a period
of hard times the company would
not be able to keep up its present
high standard of service. he said.
if its earning power were lowered.
"Unfair." Says Hamilton.
TT isn't fair to single out the
Capital Traction Company" declared
Mr.. Hamilton rather vehemently
and tax its hard-earned profits,
while permitting another company,
the w. +. & E, to go untaXed alto
gether, in the name of merger. The
Capital Traction averages only G
per cent profits. when you consider
its losses in building up its service"
Senator Ball told the witness he
would respect the rights of the
nrany and the public but re-
minded him that excessive returns
could not continue under present
conditions.
You can't compel the merger
1t isn't legal" said Mr.. Hamilton.
our 1900 stockholders would re-
volt against compulsion of that
kind from Congress. Congress
went on record in 1914 for a policy
opposed to merger.
Advises Against "CIub.-
There have been repeated efforts,
not only by the Utilities Commits
sion, but the companies as well, 20
effect a merger, but the relative
sufficient time has not been given.
1t is a difficult business. l believe
a merger will come faster If no
club is used"
Senator A. o. Stanley. of Ken
lucky. a member of the committee.
questioned Mr.. Hamilton to learn IL
the net earnings tax could be ap-
piled with assurance that tho earn
ings Of the company could be as
certainable against the wishes OF
the companies. and was told that
the books of the Capital Traction
are open and the earnings could
not be masked.
"Cannct stand stiII.,
Vice President Hanna OF the
Capital Traction said the 4 per cent
tax was placed upon the charters
of the companies in lieu of. the
personality tax and was better than
an income tax. He said the public
and Congress. were against an ex-
cess profits tax. Public utilities, he
said, cannot stand still. They must
spend money every year, and must
obtain the money from the public,
and all things must be considered
in the application of a tax. A fair
return in many instances has been
found to be more than per cent
by some utilities commissions over
the country, he asserted. He called
attention to the expenses Of main
tenance here where the trolIeys are
underground. The Capital Traction
is not the sole obstacle TO a merger,
he said, that company having gone
as far as the Washington Railway
and Electric or the Utilities Com
mission in that respect.
aPepcos Big Factor.
During a discussion of whether
the Potomac Electric Power Com-
pany, IL merged with the w. r. &
E.. would become part OF the car
ContiSseS on Page Fiee.