Evening star., 1925-05-10
BY /. A. FLEMING.

II
In local financial circles there is
positive belief that the investigation
now being conducted by the North
American Co. will lead to a merger
of the Washington Railway and Elec-
trio Co., and the Capital Traction Co,
irrespective of possible action with
regard to other utilities.
This investigation must of neces-
sity be secondary, for the reason that
the North American Co.'S interest
in both street railway companies is
far too large to permit of such
acquisition having been made with
out a more or less thorough acquaint-
ance with every phase of the situ-
alton.
Heretofore all efforts to secure a
merger of the properties directly in
volved have been seriously handi-
capped. Capital Traction officials
showed no disposition even to con-
slider the matter nor have their
shareholders looked upon the PROPOSE
ton with any favor.
Efforts in 1918 Failed.
In 1913 a local vehicle for consolida-
ton was formed in the organization
of the Washington Utilities Co.,
which had absorbed 27,50O shares of
Tie COulHiOu SUCK Ol IIlo w dSQlnS ton
Railway and Electric Co., before a
quietus was put on the movement
through the enactment by Congress
of the La Toilette bill. by which the
holding by one utility company of
more than 20 per cent of the stock in
another utility corporation was made
illegal.
This legislative was not retroactive
and did not affect the then existing
relations.
Prior to that movement there had
been very severe decline in the
values of Capital Traction Co, a
drop of many points, and, rightly or
wrongly. shareholders in the corpora
ton attributed the leadership of the
bear movement to railway interests.
making play to bring Capital Trac-
ton values nearer in line with the
current figures for Railway and Elec-
trio shares with intent to further a
merger.
Conditions Greatly Changed.
Conditions today are greatly changed
Congress has been doing everything
possible to further a merger, even 60
ing so far as to suggest an impost to
enforce it and enacting legislation re-
pealing the action of 1913 referred TO
above.
The Capital Traction Co. has seemed
Indifferent in the matter of merger
propositions since the failure referred
to above, but of late officials and
shareholders have. gradually become
less and less adamant in their oppo-
sition. They realize that they are
handicapped in SO far as competition
is concerned by reason of the fact
that their revenue must come entirely
from passenger traffic.
hay
most serious competition from the in
creasing use of the automobile, not
only the privately owned machine,
but busses and low-priced second
hand cars and trucks loaded to ca
pacity with laborers and others going
to and from work. Of course, the
railway company meets the same com.
petition, but the Capital Traction Co
Is without the profitable lighting and
power adjunct that means so much to
the Washington Railway and Electric
Co.
Owns Much Common Stock.
1t is believed that the North Amer
lean Co. or it's representatives own a
large majority of the common stock
of the Washington Railway and Elec-
trio Co. The initial purchase was the
27,500 shares of common owned by
banks, being collateral on notes fore
CiOSeQ, ABSORBED at price around
$3.50 a share, and thousands of
shares acquired since then on rising
scale.
The advance in common shares of
the Washington Railway and Electric
Co. has been due in measure to the
expected payment of back dividends
from the escrow fund accumulated
pending a decision on the rate for
electric light and power, but stock
accumulation may have been more of
a factor than the possible distribu-
ton of cash.
The North American Co. has also
bought considerable preferred stock,
but the chances are that it's holdings
of common are many times greater
than the preferred.
Moreover. the Commissioners Of the
District are more than anxious for
the consummation Of the merger, and
there seems to be no opposition from
any source. even the various citizens
organizations being, to all appear
ances, Indifferent in the matter.
There has been no indication that
the North American interests have
any intent to purchase stock in the
local gas companies.
Capital Traction Matters.
The Capital Traction Co. has $1s,-
000, 900 capital stock. Control of the
company 10 by no means centralized,
although there have been no impor.