Evening star., 1922-04-21
TRACTION MERGER
LIKELY WITHOUT
CONGRESS ACTION
Utilities Commission Asks
Corporation Counsel for
Opinion on Subject.
DECISION MAY HASTEN
COMBINE OF COMPANIES
Law Declared to Be Contradictory
as to Whether Further Leg
islation Is REQUIRED.

lSlatlOu Is Required.
Merger of the street railway lines
Of the District, long advocated as a
| solution to the traction problem of
the city, again loomed today as a live
issue.
The Public Utilities Commission. it
became known. has asked Corpora
tion Counsel Frank Stephens for a
legal opinion as to whether or not
an act of Congress is necessary to
permit the Washington Railway and
Electric and the Capital Traction
companies to consolidate.
May Consolidate at Once.
While the corporation counsel has
not completed, his opinion, it was ru-
mored at the District building that
he might hold the companies could
consolidate Immediately without any
further legislation from Congress.
Although both companies have re-
peatedly gone on record in favor of
merger, provided a satisfactory
basis for agreement could be found,
street railway officials believe that
they could not legally combine with
out al cuhDlluB ACT.
The Senate and House District COM
mittees have been wrestling with
merger legislation for several years.
out because OF the wide difference of
opinion among members of Congress
and the interested local groups it has
oeen impossible thus far to secure
passage of a law.
One Of the stumbling blocks to
merger legislation has been the cues
ton OF whether the Washington Rail-
way and Electric and the Potomac
Electric Power companies should COM
Capital Traction Company, or whether
the two railway corporations should
merge first and then take in the power
company.
Interest In Decision.
In view Of the deadlock which has
existed in Congress so long. railway
officials and citizens organizations
will await. with interest the view Of
the counsel for the Utilities Commits
sion as to whether any legislation is
needed
1t is expected the ruling of the cor.
poration counsel will be ready for
submission to the commission within
a few days.
One lawyer who has made a study
of the public utilities law called
attention today to what he regards
as contradictory legislation in that
act.
Paragraph rs. for example. provides
that no utility consolidation shall be
effected until the terms Of such con-
solidation shall have been approved
in writing by the commission. The
section reads as follows:
That no public utility shall issue
any stocks, certificates of stock, bonds
or other evidences of indebtedness
secured on its property in the District
Of Columbia for the purpose Of any
reorganization or consolidation in ex-
cess of the total amount of the stocks
certificates Of stock, bonds or other
evidences of Indebtedness then out
standing against the public utilities
so reorganizing or consolidating, and
no such public utility shall purchase
the property of any other public utili-
ty for the purpose of effecting a con-
solidation until the commission shall
have determined and set forth in
writing that said consolidation will
be in the public interest, nor until
the commission shall have approved
in writing. the terms upon which said
consolidation shall be made"
On the other hand. section II Of
the utilities act. generally referred
to as the anti-merger law. states in
part:
THAT 1t shall be unlawful for any
foreign public utility corporation, or
for any foreign or local holding cor
poration. or for any local street rail-
road corporation. gas corporate
electric corporation, telephone cor
poration, telegraph corporation or
any other local public utility
corporation, directly or indirect
ly, to own, control or hold or vote
corporation organized under any gen.
eral Incorporation law or special act
of the United States or authorized
under any law of the United States
to do business in the District of Co
lumbia, except as heretofore or here
after expressly authorized by Con-
gress ."
Interpretation of the last phrase.
except as heretofore or hereafter
expressly authorized by Congress"
probably will play an important part
in guiding the corporation counsel in
his conclusion as to whether the COM
panies may now unite.
Whether the commission, In asking
for the opinion, had in mind reviving
the merger question with the COM
panies is not known. 1t is believed.
however, that the rendering Of such
an opinion by the attorney for the
commission Is bound to bring the
merger question once more into the
1imelight as a public issue