Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-01-24
CAR MERGER BILL
IS HELD INVALID
Proposal Unconstitutional,
Traction Officials Say
at Hearing.

/,
president of the WASHINGTON Rail
way & Electric Co.; George T.
Hamilton, president Of the Canita
Traction Co, and Leon Arnold. presi-
dent of the Washington Rerid Tran
sit Co, appeared yesterday befor'
the subcommittee of the joint
committee of the House and Senate
District committees, which is holding
hearings on the bill.
The witnesses, were unanimous in
telling the committee that it was not
possible by law to bring about com
pulsory merger. A voluntary merger
could be made possible by authorize
ton by Congress, but aside from that
condemnation proceedings, with the
Government operating both com
panies, was the only alternative, they
testified
MIR. Hamilton said that in his opin-
ion the bill was divided into i've
parts, one being the voluntary merger
and the other forced merger.
Opposes Majority Report.
He registered his first objection t.
the first section of the bill. which
provides that a majority of the stock
holders could force a merger with
the other companies. He said that
he thought that at least two-thirds
or three-fourths of the stock should
vote in the Affirmative before Great
ing merger.
He pointed out that 81 per cent OF
the stock could force. according to
the terms of the bill, the other 40 per
cent to merge, pointing out that the
40 per cent would have TO be bought
out if they opposed such action.
Mr.. Hamilton expressed himself
generally in favor of merger if
some equitable method was found 10
take care of The minority stock
holders.
Senator Ball asked il the witness
thought that better service could be
rendered if a merger took place.
Sees No Fare Cut.
Mr.. Hamilton answered that he dio
not see that the public would get as
Good results as they had been led TO
expect through the many years dis
cussion of such action. He asserted
that there would probably be no re-
duction in fares, but that some econ
omies might be realized in the man
agement.
He said that he was not opposed to
the merger If all stockholders were
taken care Of and their stock bought,
II they wished to sell, at an sscer-
tanned value.
Stressing the fact that no merger
could possibly be brought about by hand
ing over to the Public Utilities Commits
sion the direction and control Of both
companies, Mr.. Hamilton said that il
was clear that the only other alterna-
tive was condemnation proceedings
Senator Copeland of New York said
that he thought * would be unfor-
tunate if there was no competition in
the street railway and bus lines in
Washington.
Declares Proposal Illegal.
Mr.. Hamilton took particular objec-
ton to the word direction" in the pro-
vision of the bill, which directs that
after July l the two transportation COM
panies shall be operated as one system.
'Hou can't take the management
from a private corporation and put 1t
in the hands of any one" asserted Mr.
Hamilton. 1t is not legal and the
power cannot be given. How can you
take the stock of company we will
designate as A and turn it over to
other management? The stock holders
of A may be satisfied, but the stock
holders OF b may not wish 10 transfer
their mana cement and to associate
their holdings with that of Company
A"
Representative Keller said that all
conditions here made for a low rate
of fare and charged that Washington
throughout the country.
John H. Hanna, vice president and
general manager of the Capital Traction
Co, answered that the rate here was
lower than the average and that Wash
ington the most difficult city in
which to furnish street car service, be-
cause OF the fact that there was only
one business, the United States Govern
ment. Mr. Keller said that he could
knV
without figures to approve it.
Auto Hurts business.
Mr.. Hanna said that the rush period
here was regular day after day and
that a great volume OF traffic had to
be moved in a short time. He also
pointed out that the private automobile
was big competition TO the street car
service.
Mr.. Hamilton, on resuming his tes-
timony said that it was the right of
Congress to institute condemnation
proceedings and pay fair value for
the companies. He asserted, how
ever, that at the present time the
companies had no power to merge
and that if this power was given
that there was possibility that such
an act might be brought about.
He asserted that these two ways
were the only ones he could see
for the contamination of merger
Mr.. Ham on taking tho stand agreed
with the precedi.., witness that two
thirds of the stock should be voted
before a voluntary merger could be
brought abe ut equity. He told tn.
committee that he had not under
stood that the bill intended to put
the management of the two companies
in the hands of the Public Utilities
Commission, but if that was the in
tent it was unconstitutional.
Under his understanding of the bill,
he said, he thought he word "direc
ton" meant simply that a more uni
fed and co-oTdinated system was to
be operated. He asserted that il that
language was accepted there would
not be a decided increase in the
power of the commission, and that
the act itself might not be uncon-
stitutional but acts of the commits
sion might turn out to be.
Cites Commissions Power.
President Ham told the committee
that in his opinion the Public Uitli-
ties Commission now has the power
to order the cars OF one of the rail-
wsy companies to be operated over
the tracks of the other, provided
there is Just compensation for the
use of the tracks and the business
that may be diverted from one conI-
pany to another. He said, in reply
to questions, that the commission in
the past has ordered that cars of one
company be operated over the tracks
of the other. and mentioned the use
of cars the Potomac Park route
as a case in point
Representative Keller criticized the
commission for allowing the Capital
Traction Co. to earn more than a fair
return in order to permit the WASH
ington Railway and Electric Co. to
earn a sufficient amount to operate