Evening star., 1928-02-16
PUBLIC'S OPINION
ON TRACTION MERGER
TO BE REQUESTED

10 BE REQUESTED
Continued from First Page)
ditions the company would be entitled
to earn a return of per cent but not
il it is going to lead to an increase in
fares The only thing the company
can ask for is a fair and reasonable re-
turn as provided by law
A merger based on the present agree
ment, according TO the rate experts OF
the commission. might lead to an in
crease in fares. although the compa-
MES are now in q position, especially the
Capital Traction Co, to obtain higher
fare.
While the commissions attaches have
not yet calculated the probable amount
of increase that could be allowed under
the agreement. they said 1t is unlikely
that the consolidated company could
earn per cent on an agreed valuation
of $50000, 900. despite the economies
that would be effected through a uni
fed operation.
The merger agreement makes no
specific reference TO rates OF fare. but
provides that the new company. TO be
known as the Capital Transit Co.
UE w pa AC@ie
on the $50, ,000. 900 rate base. This
would amount to s3.500 600 a year,
which. 1t was pointed out, is approxi-
mately double the earnings of the COM
panies last year.
However. II was explained. the court
valuation of $50. 900 900. would allow
the companies, now under a per cent
return. TO earn s4200.00o and they
could. therefore. obtain q higher fare
without merging. whereas, merger on
the basis of a $50 900 600 valuation may
prevent the fares from going as high
as they could go under present condi-
tions.
Would Save $1,000. 600.
. A saving of $1,000. 900 annually or
per cent Of the proposed valuation
| OF $50 600 900. could be effected by
| unified control of the street railway
! and bus lines of Washington. Harley
! p. Wilson. author OF the proposed
merger plan. said today.
! This estimate was based on the find
j inCs of engineers who have investigated
/ the whole field of transportation II
Washington for him. according TO Mr.
Wilson Duplication OF service. he said
was evident everywhere. and he said
he believed that an average saving oi
8 per cent in transportation time
throughout the city could be effected
with 81 less cars.
! Two Of the present car barns, he Saio.
| could be demolished and St!ll leave s1f-
| ficieut car barn space. even II the pop
/ Ilation Of the city increased by zoe. .oOC
/ Mr. Wilson denied that he was an asen:
| OF the North American Co. and he also
! denied that the word guarantee" OF q
| Z per cent return had been used by
| him In the present proposal On a
base valuation Of $50.000.00 OF the
/ combined companies. he said. with =
per cent effected by the savings, onlv
| ) per cent would be left for earnings
TO meet the proposed per cent re-
| turn.
MIR. Wilson said tha, he would not
be willing TO sign a base valuation ei
more than $50. 900 900 for the combined
| companies, and at the same time he
insisted that with such valuation
there was no possibility Of an increase
in fares. He owned. he said, SS per
cent OF the stock Of the Washington
Rapid Transit Co. but no stock OF the
North American Co, or OF the Capita!
Traction Co. or Of the Washington Rail
way & Electric Co
The $50 900 900 base valuation writ
ten into the plan does not call Tor a
guaranteed return of 7 per cent, he
said. but merely the right 10 earn 7
per cent.
III We don't &c, merger" said one
District official. car fares are hound IL
go higher They may 80 up, too. even
with merged operation. but certainly
not as high as Is likely without II,
Attaches OF the commission who arc
studying the agreement are puzzled over
certain of Its details. particularly the
ones relating to the Washington Rapid
Transit Co. which Mr.. Wilson has
agreed 10 sell 10 the new company
for $500 600. plus interest thereon from
February l. 1928,
Stockholders Must Approve.
Mr., Wilson owns al.aS7 out Of II total
Of 2l.6l2 outstanding shares. but no
provision Is made III the agreement Tor
disposition of the remaining afo shares,
The attaches also are concerned over
another section relating 10 the motor
bus company which would require The
new company TO assume and dlSeharse
all Of its liabilities. amounting IL
$3.50, 600
In addition to having 10 sain the
approval ot the stockholders " the
companies. the Public Utilities Cnnimis.
sion and Congress II Was discovered
that the merger plan also VIII nave
To undergo the scrutiny of the Hoafd
OF District Commissioners and the hu-
reau OF the Budget The Commission
erS viii have to scan II because II IN
.olves u change In the policing et the
intersections where the street railway
lines cross. as we'll as u reartansen'ent
Of certain details With reference te
street paving II viii have Ia ee SUB
mitted to the Budget bureau, because
II authorized as It now stands II VIII
deprive the District of xaon 600 year
ot estimated revenue In salaries tM
erassing policemen, nov paid ny the
companies, and paving nov done ny
them between their tracks
From u hasty examination Of the
street car merger agreement, Senator
King of Utah ranking Democrat on
the Senate District committee, believes
II viii form the hasis for = settlement
af this long vending prohlem
Generally speaking, II Is the best
plan yet submitted. Senator kins said,