Evening star., 1922-05-30
CAR LINES HAVE
LEGAL RIGHT TO
MERGE,|S ruling
Finding of Corporation Coun-
sci Sent to Senate
Committee.
LEGISLATION UPON
SUBJECT REVIEWED
Public Utilities Commission Mott
fes Congress It Concurs
in Ruling.

The Capital Traction Company ana
the Washington Railway and Electric
Company today have the power TO
merge under existing law in the
opinion of Corporation Counsel F. H.
Stephens, rendered to the Public Utili-
titles Commission. Mr.. Stephens Is
general counsel for the commission.
The Public Utilities Commission
concurs in the opinion of Mr..
Stephens.
The opinion was transmittea tS
Senator Ball, chairman of the senate
District committee, by Col. hsiler'
chairman of the Public Utilities COM
mission. In his letter of transmlttai'
Col. Keller says:
AT hearings before your committee
at various times when the subject OF
the merger of the two principal street
railway companies has been under ais
cussion, the statement has frequently
been made that under existing law law
such a merger Is forbidden and that
additional legislation is necessary 10
permit such a merger.
Copy of Opinion Sent.
IT am transmitting herewith copy
of an opinion >of Mr.. Francis II.
Stephens, general counsel of the COM
mission, in which he reviews the vari-
Gus acts of Congress relating to these
two streets railway companies and
reaches the CONCLUSION that there is
ample legal authority now on the
statute books to authoriZe these COM
panies to merge their properties. In
which conclusion the commission con-
curs.'
In his opinion Mr.. Stephens reviews
the legislation dealing with the street
railway companies of the District
Previous Mergers shown.
He quotes from the laws relating
to the incorporation of the Capital
Traction Company, the washington
Railway and Electric Company the
Brightwood Railway Company, the
NAnacostia and Potomac River Rail-
way Company, and the City and Sub
urban Railway Company. He con-
tinueS:
TT appears from these various re-
Traction Company and lines of the
washington Railway and Electric
Company. as they exist at the present
time. have various conAeetf0u999Hd
intersections which would perhaps
justify the purchase of either line by
the other under the authority of the
act referred to. If. however, a strict
Interpretation should be insisted
upon and the power to purchase or
lease granted to the Great Falls line
and the Rock Creek Railway Com
pany line be strictly construed and
limited to those lines as they existed
at the time of the grant of such au-
thority, We have the following situa-
tion:
The Great Falls line connects with
the old Washington and Georgetown
line, at the Union passenger station
at 36th and NJ streets, the former line
approaching the station on the north
side, and the latter on the south side,
and although there is no actual physi-
cal connection of the lines, vet they
may be fairly said. in railroad par
lance, to be connecting lines, as each
is contiguous to the same station.
Common Trackage Exists
THE Rock Creek line intersects or is
connected with the Metropolitan line at
9th and Florida avenue and between
9th and 7th streets on Florida avenue,
had common trackage which exists
me to be a literal fulfllment of the
conditions set out in the charter OF
1.-THE Rock Creek Company, now the
Capital Traction Company, which
clothed it with ample power to pur-
chase the intersecting or connecting
lines-the Metropolitan railway line
and the Belt railway line-now
part of the Washington Railway and
Electric system. 1 think, also, the pow
or exists to purchase or lease the con-
meeting or intersecting lines as the
latter might be amplified or extended
by future acquisitions or purchases.
1t was evidently also contemplated
by Congress that more than one line
might be purchased, as indicated by
the language in the act of 1895, lease
or purchase of such connecting or
intersecting line or lines and in the
act of 1896. lease or purchase of such
line or lines
There remains the inquiry, how
far or to what extent this legislation
has been subsequently modified by
Congress?
rf>r-:
peculiar results The act of March
4, 1913. making appropriations for
the District of Columbia, by section
8. created public utilities commits
sion- That section consisted of 103
paragraphs, setting out the duties and
powers of the commission. and pro-
vided in paragraph 54 that:
1T shall be unlawful for any rail-
way corporation, gas corporation.
electric corporation, telephone cor
other public utilities corporations, di-
rectly or indirectly, to acquire the
stock or bonds of any other incor-
poratfon incorporated for or engaged
N the same or similar business as it
Us, unless authorized in writing to do
so by the commission, and every con-
tract, transfer, agreement for trans
fer or assignment of any such stock
or bonds, without such written au-
thority, shall be void and of no ef-
feet .
Decision for Commission.
Mr.. Stephens pointed out that in
paragraph rs of this ace, 1t is pro-
vided that no public utility should
recognize or consolidate with any
other public utility until the COM
mission shall have determined
whether it would be in the public
interest. He continues:
In this act it was obvious the in
tention of Congress to permit con-
solidation, purchase and reorgani-
cation, which might be for the public
interest. subject tof the approval of
the Public Utilities Commission"
Mr.. Stephens then refers to section
II of the same act, known as the anti
merger law. which expressly forbade
any public utility corporation, direct
ly or indirectly. to own. control or
hold. or vote stock or bonds of any
public utility corporation, except as
heretofore or hereafter expressly au-
thorized by Congress. Under this Sec
tion, public utility was also forbid
den to sell or transfer any portion of
its stock or bonds to any other public
nLility or holding corporation unless
herefofore or hereafter expressly au-
thorized by Congress.
Here we have contradictory express.
sions as to policy" said Mr. Stephens.
Il am of the opinion that by vir-#
ne of the authority conferred in the
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