The Washington times., 1922-05-30
EXISTING
LAW HELD
! AS AMPLE
Keller Transmits to Senator
Ball Opinion by Corpora
ton Counsel.

.-s uOfI SOunS0is
The District Commissioners
took decisive action today in the
direction of killing traction merger
legislation now in the Senate.
Further legal authorization of
. voluntary merger is entirely
unnecessary, they declare, mas
much as there is some authoriza-
ton in existing law. They declare,
in effect, that merger legislation
should not be passed in Congress
unless the excess profits tax fea-
e.. ture is contained In it.
Merger Held Permissible.
Col. Charles Keller, Engineer Com.
missioner, transmitted to Senator
Ball, chairman of the Senate District
Committee, an opinion by Corpora
tion Counsel Francis II. Stephens, in
which he reached a conclusion that
there Is ample authority now on the
statute books to authorize these trac-
ton companies TO merge their prop
critics.
Mr.. Stephens declares:
Il am of the opinion that by vir.
ture OF authority conferred in the
statues that the Capital Traction
Company and the Washington Pail
way end Electric Company have the
power. each, to purchase or lease the
other company, such power existing
clearly on the part of the former
company and with reasonable Ger.
tainty on the part Of the latter.
ut is very probable that these
ness of this conclusion. The entire
question will then be simplifled by
the repeal merely of section IL OF
the act of March 4, 1918, making ap-
propriations for the expenses of
the government of the District of
Columbia (the anti-merger law) thus
leaving the propriety OF the acq,Iisi-
ton Of stocks or bonds of one pub
lie utility by another, under the
Public Utilities law, and the question
OF reorganization or consolidation.
under the control Of the Public
Utilities Commission, as was con.
templated by Congress in the first
place, and where 1t ought to be. /
strongly recommend this repeal"
Reviews History Of Lines.
After reviewing dn detail the his
tory Of the two traction companies,
showing the extent to which they
have absorbed other traction lines,
the corporation counsel then pre-
sented the situation as it has existed
since the passage Of the public utili.
ties act. This law expressly for
bade any form OF consolidation or
absorption except by the approval
OF the commission. The corporation
counsel then said:
1T wass further provided that no
public utilities should reorganize or
consolidate with any other public
utility or purchase the property of
any other public utility for the pur'
pose Of affecting a consolidation
until the commission had set forth
in writing that that consolidation
would be in the public interest. In
this act Il was the obvious intention
OF Congress to permit consolidation,
purchase and reorganization which
might be for the public interest.
subject to the approval Of the Pub.
lie Utilities Commission. Z.
Section IL of the same act,
usually known as the anti
merger law, expressly forbade any
public utility corporation, directly
or indirectly, to own, control, or hold
stock or bonds of any public utility
corporation except as heretofore or
hereafter expressly authorized by
Congress; and the public utility was
also forbidden to sell or transfer any
portion of its stocks or bonds to
any other public utility or holding
CORPORATION unless heretofore or
hereafter expressly authorized by
Congress so to, do, and any such
transfer was made void and of no
effect.
Policy Contradictory.
Here we have contradictory ex.
PRECISION as to policy. Under section
s the power was granted to transfer
property from one public utility to
another for the purpose Of consolida-
ton, and 30 forth, permissible in the
public interest, subject to the con.
troll and scrutiny of the Public Utili.
ties Commission, permitting the pur-
chase Of stocks or bonds. Section
IL IL a prohibition again for public
utilities from transferring stocks or
bonds to another public utility. How,
ever, under section IL we find an
exception Of power to transfer stocks
or bonds except as heretofore or
hereafter expressly authorized by
Congress As has been seen by tie
acts cited, power was heretofore
given both to the Rock Creek line
and the Great Falls and Electric dine
TO purchase intersecting or connect
ing lines, therefore they would not
fall In the prohibition contained in