Evening star., 1923-12-07
NEW BILL PROVIDES
TRACTION MERGER
Commissioners Will Ask Tax
on Excess Profits to
Equalize incomes.

The street railway merger bill TO be
sent to Congress within a few days
by the Commissioners will provide for
an entirely new method OF taxing the
companies. it was learned today. Be
fore the bill can be transmitted to the
Capitol. however. it must get the ap-
proval of the budget bureau, since il
affects revenues.
The bill supported by the city heads
present per cent tax on gross earn
ings and substituted a tax Of 90 per
cent on all money earned in excess Of
a per cent return on fair value and
rs per cent OF income in excess OF a
per cent return on fair valns.
IN rewriting the bill this year the
Commissioners have provided for O.
tax of 20 per cent on operating in
come. after deducting operating ex-
penses, in lieu of the present 4 per
cent on gross earnings.
Would Equalize Earnings.
At the present time the profits of the
Capital Traction Company are greater
than those of the Washington Rail-
theory of the Commissioners pro-
posed legislation is that If the earn
ing power Of the Capital Traction is
brought down nearer to that of the
Washington Railway and Electric
there will be more likelihood of
consolidation. The Commissioners
seek to bring about this equalization
of earning power by a new method of
taxation.
If Congress had adopted last years
bill the Washington Railway and
Electric Company would not have
paid any tax, since it does not earn
per cent on it's valuation, while
the Capital Traction Company would
have turned over to the city a large
part of its earnings in excess of 6
per cent.
Under the revised bill. which is
about to be sent to the budget bu
reau for approval. the 20 per cent
for the Washington Railway and
Electric Company about the same
amount In taxes it now pays.
AAsurcs More Revenue.
In the case Of the Capital Traction
Company. however. the 20 per cent
tax on operating income will mean
that that company will pay much
more into the city treasury.
For the eleven months Of the pres
ent calendar year the Capital Trac-
tion Company's taxes at the present
rate of 4 per cent on gross earnings
would be about s174.000. II the new
method was in effect now the Capital
fractions taxes for the same eleven
$4,000, or nearly SO per cent greater.
1t will be seen, therefore, that the
new bill would mean more tax money
for the city. It is stipulated in the
bill that II the companies merge the
90 per cent tax would automatically
be abolished and the consolidated
company would return to the old tax
rate of per cent on gross.
1t is understood that the reason the
Commissioners are recommending new
taxation method this year is to avoid
basing the tax on the valuations of
the companies, which are in dispute
before the courts.
A bill to bring about scent streer
car fares in the District of Columbia
was introduced in the Senate yesterday
by Senator Mcclellan Of Tennessee.
The bill provides that hereafter the
Public Utilities Commission of the Dis
of fare on street railways in the Dis
trict in excess of the fares provided
in the original charter of the railways.
II provides further that on the passage
OF the proposed law the fares charged
on street railways in the District shall
be cents and that six tickets shall
be sold for 20 cents.
The bill is similar to the proposal
made by Senator Mckellar during the
last Congress-. He said today that he
Intended to press for action on the
measure at the earliest opportunity.
In addition to his bill providing for
5-oent street car fares in the District,
senator Mcclellan yesterday intro
duced a resolution providing for the
appointment of special committee
OF the Senate to investigate ana re-
mort ON the AFFAIRS of the street rail-
ways OF the District with regard to
the service accorded, their financial
standing, salaries paid, etc.