Evening star., 1926-10-27
BUS COMPANY SALE
lis HELD APPARENT
VIOLATION Of LAW
Public Utilities Commission
Breaks Relations Pending
Establishing of Legality.
| FIRMS COUNSEL HITS
OFFICIALS ATTITUDE
Fare Increase and Valuation
Hearings Postponed; Bell and
Attorney Clash.

With an opinion from Corporation
Counsel Francis II. Stephens indicat-
ing that there was IAN apparent vio-
lation Of the law" in the transfer of
the majority of the capital stock of
the Washington Rapid Transit Com
pany from its former owner to the
North American Company, the Public
Utilities Commission today abruptly
adjourned for an indefinite period
for authority to charge a straight
cash fare Of 10 cents on its bus lines
in the District.
The rate case, which also involves
the fixing Of a fair valuation on the
companys property. will not be re-
Sumed, the commission announced,
until the company has taken steps to
satisfy Mr.. Stephens and the commits
sion that it's status is or has been
made legal.
Holds Evidence Is Lacking.
The commissions decision was pro-
tested vehemently by George =.
Hoover, counsel for the bus company,
who declared that the commission is
statutory board, in which no inherent
the hearing and deny the company to
proceed with its valuation case. The
commission, he contended. had no evi
dence before 1t to support the corpora
tion counsel's opinion.
The question as to the legality of
the transaction was raised by William
NICK. Clayton, chairman Of the public
utilities committee of the Federation
Of Citizens Associations. at the last
hearing on the cOmpany's plea for
financial relief. In his opinion Mr..
Stephens said: while express no
opinion upon the legality of the trans
the courts, the situation is such as to
seriously engage the attention Of the
commission and the Commissioners of
the District of Columbia
They are thus charged with notice
Of an apparent violation Of the law.
The commission may suspend the pro-
ceedings, IL 1t SO desires, and call
upon the North American Co. to
clarity the situation by obtaining the
assent OF Congress or by satisfying the
Commissioners that the transaction
was valid"
Must Show Legality.
After reading the corporation coun-
man Of the commission, Immediately
followed 1t with a statement announc-
ing the adjournment of the hearing.
while 1t Is not the function Of this
commission to pass upon the legality
Of a matter Of this kind" said Com
missioner Bell, 'it IS the duty of this
commission to take cogniZance of
such matters and, with the advice Of
the general counsel. to take such ac-
ton as appears proper in the prem
iSeS.
1.-THE commission has given due con-
sideration to the opinion rendered by
the general counsel and has decided
that the hearing now in progress on
the application of the Washington
Rapid Transit Co., for an increase In
the rate Of fare be adjourned in
definitely until the company shall
have taken such steps as may be
necessary to satisfy the general coun-
sci and the Public Utilities Commits.
sion that it's status is or has been
made legal"
The action of the commission ap-
parently took Mr.. Hoover and Off
cials of the company by surprise. The
company's counsel undertook to ar
que the legality of the commissions
move, but he was interrupted by Com
missioner Bell. II want to try and
show that the company has not vio-
lated the law" continued Mr.. Hoover.
There is nothing before the commits
sion to show that it has. The opinion
of the corporation counsel does not
show that the company has violated
the law"
Commissioner Bell then reminded
Mr.. Hoover that he had courteously
allowed him to proceed, but that any
information he might have to show
the legality Of the transaction should
be submitted to the corporation
counsel. Mr.. Hoover countered by
referring to the action Of the COM
mission yesterday afternoon in post.
poning action on the company's ap-
plication to enter into a contract with
the Capital Traction Co. relative to
the use Of the basement of that
company's barn at Fourteenth and
Buchanan streets for a bus terminal,
and Commissioner Bell remined him
sharply that the hearing had ad-
jOurned.
Power Placed in Congress.
The question raised by Mr.. Clay.
ton as to the legality of the stock
transfer was based on paragraph 81
of the public utilities law, which pro-
vides that the purchase of the stock
Of one utility corporation by another
should have the sanction cf the com
mission. Mr.. Stephe:.- ruled. how
ever, that this provision was repealed
by the La Toilette anti-merger act
which withdrew this authority from
the commission and placed 1t in Con
gress.
What steps the company will
undertake to get the commission to
resume the hearing was not made
known by Mr.. Hoover after adjourn.
ment. The attorney did point out
that he thought the proper place to
argue the question of the legality
of the ownership of the company is In
the courts.
The hearing was considered by pub
lie utility officials as one of the mos,
dramatic in the history of the com
mission. 1t adjourned II minutes
after 1t convened, and Is said to have
marked a decided change in the corn
missions attitude toward public util
ity corporations.
The decision not only delays the ef-
forts Of the company to get an in
creased fare. but served to notify the
company that the commission would
have no further official relations with
1t until it is definitely determined
that its status Is legal or has been
made legal.
The petition Of the citizens Of Chill
lum Castle Heights for an extension
n