Evening star., 1927-11-08
NEW MERGER PLAN
NEARS COMPLETION
Citizens Proposal Involves
Power Company and May
Urge New Valuation.

Another plan for consolidating the
transportation systems of the District
will be completed the latter part of
this week by the engineering firm of
Hansel & Hansel, Ralph B. Fleharty.
peoples counsel before the Public
Utilities Commission, was advised to-
day by Maj. Clayton E. Emig and
Hugh NJ. Frampton, members of the
public utilities committee of the Fed.
ration of Citizens Association.
The committee engaged Hansel &
Hansel some months ago to make a
| transportation survey Of the District
and to evolve a plan of merger which
would be sponsored by the organized
citizens of the District. Just as soon
poses to submit 1t to Mr.. Ffeharty for
his consideration.
Will Confer on Plans.
1t is the intention of the commit
tee to hold joint conferences with
Mr.. Fleharty and Harley +. Wilson,
author of the latest merger plan, for
| the purpose of working out a scheme
which would be acceptable to both
interests. An effort will be made to
arrange the first Of these confer
ences early next week.
While none of the details of the
Hansel & Hansel plan has yet
been revealed, it was intimated that
it most likely would contain a pro-
vision for making the Potomac Elec-
trio Power Co. a party to the merger.
The power company is omitted under
the Wilson plan. The federation has
taken the position that only through
the merger of the power company
with the two traction companies can
the financial and engineering success
of the unification be assured and the
rights of the stockholders and patrons
safeguarded.
William Mex. Clayton, chairman OF
the utilities committee of the fedora
tion, has insisted that in advocating
merger through many years. the
organization has always meant and
means today consolidation of the
three companies.
Oppose Guaranteed Return.
The federation also. Mr.. Clayton
said. is committed to the following
principles with respect to a merger:
Opposition to any guaranteed rate
of return, a fixed rather than a varl-
able rate of fare. per cent rate
of return instead of Z. and that the
base of the merger company upon
which the rate of return is to be com
puted should be ascertained and es-
tablished by new valuation OF the
properties to be consolidated. and that
these valuations be based on the actual
investments made by the companies
rather than upon the reproduction
costs The federation Is in accord
however. with the feature of the VIII
son plan which would relieve the
merged companies of payment of the
salaries of the crossing policemen and
street paving costs.
The Wilson plan is still resting un-
disturbed in the Public Utilities Com
mission. waiting for a move on the
part of some one to bring about the
conferences suggested by John IL.
Hanna, president Of the Capital Trac-
ton Co. and indOrsed by the author.
Mr.. Wilson has indicated that he is
ready to proceed with the conferences
but some doubt exists as to who
should take the responsibility for
initiating the discussions.
The Utilities Commission today con-
sidered the letters of Mr.. Hanna
advocating conferences on the merger
plan and MIR. Wilson's approval. and
as a result drafted a communication
to be sent to each of them endorsing
the idea but declining to participate
in the discussions.
The commissions letter pointed
out that it would be glad to consider
any plan designed to bring about a
merger. which is highly desirable.
but that it would be inconsistent for
it 10 take part in discussions on
plan that it later would have to con-
slider officially. The commission also
offered to make helpful suggestions
to the merger conferees.