The Washington herald., 1922-03-23
ALL REJECTS
MERGER Limit
Pities Commission Asks
Enactment of Tax
Feature Only
L. KELLER WRITES
(nge Would Put Levy on
Gross Earnings of Trac-
tion Lines.

tlpti L1IlcS.
be Public Utilities Commissions
|osal that Congress pass only
net earnings tax feature of the
et car merger bill failed to
60 Senator L. Heisler Balls be-
in the dual measure reported
sday.
was announced yesterday at
ONCE Of the Senate District
bmittee that the new bill would
called up by senator -Ia.- 80
on at the earliest opportunity.
opportunity was expected to
erialize soon after the treaty
{ is out of the way.
or a number of years there has
n much discussion of the best
to bring about a merger and
% or nothing has been accom-
he'd. said the Utilities Commits
b chairman, Col. Charles Keller.
p letter received by Senator Ball
terday.
Would Limit Efforts.
For this reason" the letter
led. ''it appears wise to the COM
sion to suggest that no attempt
made to enact merger legislation,
such. but that efforts be limited
the attempt to secure the enact
nt of the excess profits taxation
In as a means of promoting a
re fatorable sentiment on behalf
the merger in the minds Of those
ntified with the two traction
|npanies."
Certainty of a fight on the taxa
n plan developed before the day
5 over when Senator William H
| ing. Of Utah, introduced an
bendment to the bill applying the
* to earnings except those eX-
|nded within a year for extensions.
tterments or new equipment, or
i the purchase and retirement of
|tstanding bonds of the corpora
bn or for the purchase of fran
Uses, tracks. properties. shares or
|nds of other corporations having
hnchises."
Would Tax Gross Earnings.
The proposed King amendment. 1t
believed, would have the effect
making the tax chiefly one upon
'oss earnings, rather upon net
.rnings.
once the receptive mood has had
ay," said the letter of the Utilities
1T Is believed the
rect railway companies will them
Ives come forward with proposals
a practical character. differing
erein from the generalities. When
e merger has actually taken place
will be expedient to return to the
rmer plan of taxing. gross re-
ipts. as being in accordance with
e policy of Congress and Offering
e smallest opportunity for depriv-
z the public treasury Of a just
turn for the privileges conferred.
should be noted, of course, that
y gross receipts tax on the trac-
IN companies, is. to the extent OF
amount, an addition to the cost
transportation. and is therefore
hected in the rate of fare which
Ist be imposed.
Profits Tax Only Plan.
AT the hearing Monday it was
ged by the Representatives OF the
.pitaI Traction Company that
ere are other and better ways Of
omotinE a merger than by excess
offs taxation. and it may be SUI
rfiuous TO call to your notice the
ct that when you asked for a
aza-f,o 1aerripfin, 90 fhaSa
her ways of accomplishing this
Irpose no answer was made by the
tness.
AS a matter of fact the Commits
On knows no way of promoting a
erger other than to remove the
between the two trac-
IN companies. and this can be
ne only by excess profits taxation
by a separate rate of fare for
ch company. OF these. the excess
offs taxation. which restores to
c public in general all that has
en- taken from il over and above
fair return, seems the preferable
an"
Justihes 6 Per Cent Limit.
The principle contained in the
cess profits tax plan is based upon
corresponding provision in the
transportation act,
e letter said, and the 6 per cent
nit at which this taxation is to
zin is justified by the stability Of
e streeL-rail business here in
The Commission still feels. as it
IS in the past" said col. Keller.
hat to permit the Washington
ailway and Electric Company TO
,sorb the Potomac Electric Power
,mpany before merging with the
initial Traction Company will re-
owe from the two railway COM
mics any incentive toward the
rger merger. since the present
lancial disadvantage alleged to be
.perienced by the Washington
ailway and Electric Company
ould by the absorption of its sub
diary, be completely removed. and
} position with the bankers and
lblic would become fully as strong