The Washington times., 1922-09-10
PASSES BILL
TO AUTHORIZE
UNION Of Lines
Second Draft of Measure
Eliminates Faults Of
Initial Act.
PENALTIES BIG EARNINGS
Provides for Taxation Of Ex.
cess Earnings by Capital
Traction Company.
By A. M. JAMESON.

really and truly in sight for
= Washington?
Does Congress mean business,
or is it just indulging in light
summer exercise, preparatory to
It's grind next December?
These are pertinent questions
IN view of what has happened in
the Senate in the past ten days.
Twice has a traction merger meas
ure been passed there withou: OBJ
lection from any source. The first
time the passage Of the bill was
purely accidental, and the wrong
bill got into the limelight..
.I Second Bill Is Passed.
But yesterday something entirely
different happened. A real merger
bill got by the Senate. 1t Is a bill
which will tax the Capital Traction
Company as high as rs per cent OF
its earnings in excess OF per
cent return upon a fair value Of
the property. and as high as so
per cent upon a per cent return.
Commissioners have declared would
be sufficient to bring the Capital
Traction Company into line and
compel II TO agree to consolida.
ton with It's less prosperous neigh.
Dor. the Washington Railway AMI
Electric Company. 1t Is an excess
profits tax of the most drastic sort.
George Il. Hamilton, president Of
the Capital Traction Company, has
been fighting this tax issue tooth
and nail. Traction interests in the
city were OF the opinion he had
killed II. In fact, he had aroused
such opposition to IL in the Senate
District Committee that nothing
had been heard from II in several
months.
Senator Wesley Jones, member OF
the District Committee and ardent
advocate Of merger legislation, was
chiefly responsible for the action
of the Senate yesterday in passing
the voluntary merger bill with the
excess profits tax included in II.
by rare good fortune not a single
enemy o: the legislation-not even
senator King Of Utah, who is the
Veritable watch dog OF the calen.
dar-was on the floor when the bill
came up. Nor was Senator Stanley,
who vigorously opposed the legis
lation In committee.
When the measure came UP Sena.
Tor Jones informed the Senate II
was identical with the measure re-
Gently passed, save that IT. included
q tax provision that the District
Committee had approved. This ex.
PLANTATION was sufficient to satisfy
the curiosity of Senators, and the
bill was passed.
Bill Goes to House.
. Tomorrow the bill will be in the
House, and will be referred to the
House District Committee. Will
Chairman Focht make good" on
his recent promise to Senator Jones
TO obtain prompt action upon the
measure?
That is the big and the outstand.
ing question, so far as the long
waited merger Is concerned. OF
course. there Is no prospect of action
by the House In advance Of the De
csnlber session in any event. But
II Congressman Focht can swing his
committee into line, and place the
measure before the House, the final
and critical test on the merger issue
will have come.
There are various reasons for be.
iievlng that strong obstructive
measures will be employed to IRE.
vent action by the House. One is
that the traction lobby" is very
active. Another is that many law.
years in Congress entertain doubts
as to the constitutionality of the
excess profits tax provision.
That the tax provision Is discrim.
inatory, and frankly so, there is no
doubt. II is a tax aimed to penal
ize the Capital Traction Company
and to absorb most Of the profits
Il now enjoys by reason Of ts vir.
tual monopoly OF the best.paying
traction routes in the city, and It's
freedom from lean.paying suburban
routes. The District Commissioners,
supported by the corporation coun.
sci, declare that the provision is
Constitutional
Creates Precedent.
Other lawyers say that It. viii be
one of the first times in which the
tax powers Of the Government have
been used in an errort to force a
corporation TO do indirectly what Il
could not be forced to do directly.
There Is no doubt that under it's
charter rights the Capital Traction
Company cannot oe forced to con-
sofidate with the Washington Rail.
way and Electric Company.
Certain similar efforts by Con.
gress have recently been declared
Unconstitutional by the United
States Supreme Court. For instance.
Congress recently attempted to regu.
late child labor by prohibiting the
products OF child labor from entering
into interstate commerce. The law
was declared unconstitutional.
After more than decade Of
merger discussion and agitation IN
Washington the whole situation has
been boiled down to this-there is
nothing but an empty hope In a
voluntary merger, and the only way
by which a merger can be forced II
TO employ the excess profits tax In
n discriminatory way.