The Washington herald., 1922-03-18
FIGHT SENATE'S
PLAN TO FORCE
MERGER BY TAX
Capital Traction Officials
To Be Heard Monday
By Committee.

Sudden opposition developed yes
terday to the Senate plan OF SO per
cent net income tax as a means OF
forcing the street car companies OF
Washington to merge. Officials OF
the Capital Traction Company noti-
fed the District Committee they
want to be heard, and a similar no
tice is said toShave been received
from officials OF the Washington
Railway and Electric Company.
The District Committee fixed 2
o'clock Monday afternoon for a
hearing.
Hope for Voluntary Merger.
Hope that a voluntary merger of
the street railway companies would
result from the hearing Monday.
was expressed by several members
of the District Committee last night
despite the fact that Senator l.
Heisler Ball. chairman of the COM
mittee, declared that there was lit
tie or no chance-for the proposal of
a voluntary merger.
Officials of the railway companies
stated that they merely intended
to appear before the committee for
the purpose of registering their
disapproval of the proposed tax"
but further stated that they would
introduce some definite information
on the street railway situation" at
the same time.
introduced by yBan.
The bill was introduced yester-
day by Senator Ball. 1t is the re-
vived Rail- bill, introduced last year
and providing for a general con-
solidation of the street car lines,
with the bill providing the net in
come tax embodied as an amend
ment
1t abolishes- the per cent tax
on gross earnings of the companies
and establishes the net income tax
as a substitute, the object being
to equalize the earnings Of the
companies. The Capital Traction
earnings are above 10 per cent.
while those of the Washington
Railway and Electric Company are
below 6 per cent. These two prin-
cipal lines embrace all other lines
operating in Washington and vicin-
ity. The hitch in the proposed mer-
ger is the objection of the Capital
Traction to pooling it's interests
with a corporation whose profits
are considerably smaller.
Would Beneht Public.
The question of how to bring the
companies to terms has been under
consideration by the Public UtiI-
tiles Commission and Congress for
several years. That the merger
would be of vast benefit to the pub
lie in affording reduced fares and
improved service is Acknowledged
by street car officials, members of
Congress, District officials and the
public generally.
Editorially, The Washington Her
aid last year pointed out the Diff
culties standing IN the way and
suggested the purchase of the w, r.
& E. stock by the Capital Traction
Company as. the real solution. To
legalize a deal of this kind, the
new bill authorizes the companies
to merge. As an inducement to the
c. T. Company the W. r. G. E. is
given permission under the new bill
to absorb the Potomac Electric
Power Company, whose stock al
ready Is owned by the w. r. & E,
the idea being to make the w. r.
& E. more desirable of absorption
by the Capital Traction. Fepco,"
which supplies heat and electricity
for the w. r. & E., as well as the
city. pays much larger returns
than its parent corporation.
Objection was suggested by The
Herald to the consolidation Of the
Confinusd o. po,. To-, .n