Evening star., 1926-06-16
Street Railway Merger.

Letters just made public indicate
the failure Of efforts thai have been
In progress for some time for vol,
untary merger Of the Two traction
cOmpa MES operating In this District
These letters are from the presidents
OF the two corpora lions and from the
Engineer Commissioner, ira ansmittins
the former to the chairmen Of the
District committees Of Congress. 1t
appears from this correspondence that
the move for a voluntary merger has
ia lied because the Public Utilities
Commission was unwilling 10 approve
the plan of cunsolida ton which had
been tentatively agreed upon by the
North American Company and repre-
sentatives of the Washington Railway
aud Electric Company. The % pital
Traction Company had not been
brought into the conference at the
time Of the indication that the Public
t,ilities Commission would not ap-
prove the basic principle proposed for
The merger. The Engineer COmmis-
Sioner. cha irnan of the Public t'til.
that The commission believes that the
ouly way now 10 effect the merger OF
the i've systems or their merged oper,
alton is through the enactment Of a
law compelling such Il union and lay
ing down The fina nciai ba sis upon
which it is to be effected.
A merger of the two traction sys-
TENS is desirable from the point Of
view of both the public and the cor
porations. II combined under IA single
management these two street railway
systems would operate 10 the best au
vantage of the people and eventually
the best advantage VI their owners.
The present situation IL undesira bic.
IL results from the Inateriali differ
eht tinancial roiiditions of the TWO cor
poi'alions, a difference which. while il
involves an ilnmedia lie disa d va ntase to
one represents It's material future ad
vantage. The car riders of today are
must he based upon the actual and
not the prospective earning powers OF
the corporation which is now the more
NEEDY of the two. 1t is Impossible to
establish Two rates OF fare. 1t is un-
desirable and inequits BILE to estab
iish a single rate which imposes
a loss upon one sA stem while yielding
a fair return to The other.
This whole nIa tier turns upon the
question of raiustions. Private nego-
,ia,ions have failed 10 9sta blish a
ba sis Of valuation which viii! be equi
table 10 the public in the future. 1t
was hoped that a voluntary merger
upon sound lines could be effected.
Now il appears that this is Impossible.
congress has the power to esta blish
the basis of merger by legislative
action. and to compel the union Of the
Two systems. 1t cannot 60 SO far as
to require a combine tior that would
destroy or confiscate values. Any law
compelling merger would, OF course,
be subject 10 review DI the courts.
Such d review would certainly be
sought In case Of compulsory mer-
ger enactment that in the jndg mt
Of the stockholders OF either corpora
ton menaced them with an inequi-
able loss OF property right. A review
by the court would necessarily be pro-
tracted. deia wing for a long time the
consummation Of The plan for con-
soiida ton. Ii is therefore the Dis
tricts hope that. voluntary merger
having failed. as attested by the let
ters just made public, compulsory
merger will be directed by congress
sional enactment on such terms that
Il can be put into effect promptly.