Evening star., 1926-12-01
TRACT|ONMERCER
MEASURE ADOPTED
BY UTILITIES BODY
Bill Contains Three Rewards
for Union Before July, 1923,
and Heavy Penalty.
so PER CENT REVENUE TAX
INCREASE IS WEAPON
Companies Plans for Service-at-
Cost and Freedom From Expense
Of Laying Payements Ignored.

The Public Utilities Commission to-
day adopted the bill designed to in
duce the Washington street car COM
panies to merge voluntarily. Enact
'l1ent will be sought at the coming ses-
sion Of Congress.
Stripped Of It's verbiage the measure
contains three rewards for the COM
panies If they consolidate. and a heavy
penalty in the form Of so per cent
increase in the gross revenue tax If
they fail to do so by July l, 1928.
AS previously hinted, the commission
proposed to use the increased tax as
the principal weapon to force the COM
panies to unite.
The rewards are a guaranty against
unlimited bus competition, repeal Of
the crossing policeman tax and repeal
of the bridge repair tax.
Tax Removal Held Reward.
The bill has been drafted in two
sections. The first provides for the IN
crease in the gross revenue tax from
4 10 s per cent to become efect1Ve
July l, 1923, The phraseology is such
that the increase will automatically
become SIscClltt Oh l1letL d1lC W IVILCi
the companies merge or not. The sec
ond section of the bill, containing the
rewards for merging, however, pro-
vides for the repeal Of this tax in
crease If the companies consolidate
before July /, 1928. AS result the
commission considers the removal Of
the per cent increase in taxes as a
reward and not q penalty.
Members Of the committee explained
that the bill Is very similar to the
joint proposals Of the street car COM
panies submitted several days ago, eX-
cept that the Objectionable service-at'
cost plan, based ON an agreed valua-
tion, is removed. The commission bill
also ignored the request of the COM
panies that they be relieved from any
obligation to pay the cost incident to
the laying oe new pavements for the
permanent Improvement of streets or
highways utilized by them.
Congress to Get Both Plans
The commission decided to transmit
the outline Of the merger plan sub
nlitted by the car compa nies to Con-
gress, together with its merger bill, so
that 1t may have independent con-
sideration.
In adopting the merger legislation
the commission modified somewhat a
tentative bill brought up by it's at
taches. All punitive provisions with
the exception of the increase in the
gross revenue tax were stricken out.
The first section Of the bill provld.
ing for the increase in tax, which the
commission has figured will take ap-
proximately 100000 a year from the
income of the two companies, reads:
That so much Of paragraph of
section of the act Of Congress ap-
proved July /, 1902, and such other
provisions Of law as impose a tax
of per centum upon the gross re-
ceipts Of street railway corporations
operating within the District of Co
lubia, be and the same are to that
extent hereby repealed, effective mid
night June 80. July l. 1928, and
beginning at this date each such
corporation operating within the Dis
trict Of Columbia shall pay annually
to the District Of Columbia, in lieu Of
all other taxes on personal property
and franchise, a franchise tax of s
per centum upon its gross receipts
for the preceding fiscal year.
Provisions for Merger.
The first provision Of section of
the bill provides that 'the Capital
Traction Co., the Washington Rail
way anc Electric Co., the George
town anc Tenleytown Railway Co.,
the Washington Interurban Railroad
Co. and the City and Suburban Rail
way of Washington are authorized
to merge and consolidate all and
singular their respective corporate
rights, privileges and franchises, and
all their respective works and prop
critics, real and personal. tangible and
intangible. into one corporation and
property for the ownership, manage
ment, control and operation Of all
their said works. properties, rights.
privileges and franchises, under such
corporate name as may be, adopted,
under the following conditions:
"That these corporations may by
agreement in writing. assented to by
the owners, of record. of at least Is
per cent Of the capital stock Of each
of them, agree to merge and consoli-
date. into a single corporation and to
own and operate all the rights, estates.
works, properties and franchises own
ed by them, upon such terms and
conditions, not contrary to the provi-
sions of the bill as they may agree
,,pon. subject, of course, to the ap-
proyal in writing Of the Public Utili-
ties Commission. Upon the execu-
ton of this agreement in writing and
its recording in the office of the re-
corder Of deeds, the merger and con-
solidation would be complete and the
merged consolidated corporation will
become a body polite and corporate
under the name agreed on
Privileges of Company.
The merged or consolidated COM
pany would have power subject to the
approval of the commission to own
and operate directly or through sub
sidiary companies. street railway,
motor bus, or other form of public
Transportation service in the District
and in adjacent States, subject to the
laws Of such States. It also would
have power to acquire, lease. operate
and enjoy all or any part OF the street
railway, motor bus or other transit
property and franchises of any and
all such companies now operating or
authorized to operate with the Dis
trict of Columbia or adjacent States
and to acquire the capital stock and
other securities of these companies.
The merged or consolidated corpora
ton is authorized by the bill to issue
such stocks and bonds or other evi-
tence Of Indebtedness and to execute
such mortgages, deeds Of trust, trust
agreements, or other securities as may
be necessary and g. finance needed
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