Evening star., 1924-03-17
EXPLAINS HISTORY
OF TRACTION FIRM
Hanna Tells Senate Commit
tee Details of C0nsoIida-
ton in 1895.

; ton in 1895.
| The history of the organization of
the Capital Traction Company was
| described by Supt J. H. Hanna of
that company at a hearing today on
| the Mckellar five-cent street car fare
| bill before the Senate District sub
committee on public utilities.
The purchase Of the old Washing
ton and Georgetown Railway Com
! pany by the Rock Creek Railway
Company in 1895, when the owners of
] the bonds of the Washington and
Georgetown, Company received zap
proximately double the par value of
| the bonds of the company and $275
per share, of which the par value was
| $50, was declared by Mr.. Hanna to
| have been the best possible deaf that
| could have been made for the pur-
chase of that company at that time.
Had Charged 'swaterinK."
! Earlier in the hearings Senator
McKeIler of Tennessee had charged
that the transfer of the bonds at
| $S,e00,608 when their par value was
100000 had been watering" of the
; bonds.
| Mfr. Hanna denied this emphaticaIly
rate of fare charged by the Capital
Traction Company. as fixed by the
! Public Utilities Commission. has moth
! ing whatever to do with the purchase
! price of the old Washington and
/ Georgetown Company. He said that
the rates now charged have been
| fixed by the Pubic Utilities Commits
! sion OF the District on a fair valua :
tion of the property as found by the
| commission.
| Approved BY Congress-.
! The purchase of the Washington
| Creek Railroad Company was made.
/ through the late Senator Newlands
! OF Nevada. acting as trustee. and the
ass sssea tina. tbe,e stewar Tsntst He dh in
tanned the best price they could from
! the owners of the Washington and
Georgetown Hallway Company. He
declared also that IL would have been
impossible to purchase the control of
! bonds since. stock and bonds were
owned by the same men. He said,
/ too. that the purchase had the ap-
! proval OF Congress, both before and
! after 1t was consummated r.
! At the time the purchase was made.
Mr.. Hanna, said, the estimated fiscal
value of thu Washington and George
town Railway Company was $500, 900
He contended. however that the COM
pany was capable of earning divi-
dend on s12.0oo.0e0, and for that reason
s was entitled To the price received for it.
Senator McKellar pointed out that the
bonds of the Washington and George
; town Company would have matured in
three years, and that the owners
would then have gotten 100000 for
them. He said, too. that the Rock Creek
Company at that tirDe was not making
any money, ard that the moving cause
Georgetown Company was the value of
$4,000, 900 placed on it's $4,000, 900 worth
I of bonds
! Mr.. Hanna contended that there
was a s5,150,00o worth of intangible
value OF the Washington and George
J town Company in excess of its ply
sicaI value.
Senator McKellar wanted to know
! If this diG not arise from a fran
chise granted by Congress. Mr.. Ham
, Gus things; that the company had
| by careful management built up a
/ business worth $40, 100000. and that
/ it was entitled to sell its business
for that price.
In 1895, Mr. Hanna said a street
! railway was operated like a private
| business, and that there were no pub
! lie utilities commission at that time.
| Today. he said, public opinion has
changed with regard to public serv-
! ice corporations and they are regu-
| lated by law. and are vastly differ
| ent for that reason.
Mr.. Hanna insisted that the price
tpaid by the Rock Creek Company for
the Washington and Georgetown Com
pany in 1895 had nothing to do with
the fares now being fixed for the
Capital Traction Company. but that
they were fixed on the fair value as
found by the Public Utilities Commits
You mean that the Public Utilities
Commission has confirmed the value
fixed by your company" said Senator
Mcclellan.
fair value of its property at some
$S, ,000, 900 more than the Public Utili-
ties Commission did.
Ask Only One Change.
Mr.. Hanna made it clear that the
Capital Traction Company had joined
in only one request for changes in
fare and that was when it was pro-
straight without the issue of tickets
of six for 26 cents. He suggested,
however. that sooner or later the
company would have been compelled
to ask for increases in fare. While
Mr.. Hanna admitted that the fares
possibly might not have been raised
as high as they were IL the Public
Utilities Commission had been acting
alone on the Capital Traction Com
pany's case, he told the committee
that If there had been a single street
railway company operating in the
District-which would have meant a
consolidation of the Capital Traction
Company and the Washington Rail-
way and Electric Company-the fares
allowed would not have been one
cent less than those which have been
] allowed.
Figures submitted to the committee
, by Mr.. Hanna at the request of Sena-
tor McKellar showed that the Capital
Traction Company had paid the fol-
lowing excess profits tax: For the
year 1913, $1.612.61: for the year 1919,
| $3s,S77.02; for the year 1920, $109,-
| 5Ss55. and for the year 1921, $780,
1851.
Another table presented by Mr.
| Hanna showed that the number of
stockholders in 1895 were $50 and in
| 1929 2,273. The number Of shares of
| stock in both 1895 and 1923 was 1zo,-
! 600. 1t showed also that the number
Of stockholders today who held stock
| in 1895 is IS and that the sharehoId :
! ers in 1895 who today own stock in
| 1886 owned 1854 shares, while to-
day they own 23.228.
The committee will resume it's
! hearings next Friday at 10 am.
nr Yoahino Now Editor