Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-02-15
MERGER
PLANS PRESENTED
Agreement Places Valuation
at S25,4O0,00O for New
Transit Company.
Continued from First pageD


gregatc cost Of power to the Capita
Traction Co. and the Washington Rail
way & Electric Co. and the new COM
panv will take over all existing contract
of the Washington Railway & Electric
Co for the sale of power to other rail-
way companies.
Public Will Have Voice.
In order to insure direct repre-
Sentation of the pubic in the manage
ment and operation of the new com
pany in addition to the continued SUI
pervision as at present by the Public
Utilities Commission. the agreemcn
provides that out Of a board of direc-
tors of Is members three shall be Sc
lected annually by the Utilities Com
mission. OF the remaining L.. six are
10 be nominated by the Washington
Railway g. Electric Co. and six by the
Capital Traction Co. OF the six initially
nominated by the latter, four will hold
Office for three years and two will hold
Office for two years. OF the six nomi-
mated by the Washington Railway &
Electric Co. two will hold Office for two
years and four will hold Office for one
year The officers of the new COM
thus selected.
The agreement further provides tha
the new company shall grant each
street railway fare free immediate
transfer to any connecting point of it!
street railway lines within the District
subject to the approval of the Utilitic.
Commission and reasonable rules L
prevent abuse" In addition. transfer:
are to be granted between street cars
and buses under terms and condition;
prescribed by the Utilities Commission
In consideration Of the unified opera.
ton as provided for in the agreement
and the granting of free transfers a:
proposed, the new company would be
relieved BY legislation of the expense
of crossing policemen. the laying of new
pavencntS and the maintaining of re-
newals or repairs to streets and bridges
over which its lines may operate ex.
cept such as are incidental to ordinary
track repairs. and by guaranteed rea.
Sonab.e protection against competition
The agreement sets out fully the
rights and preferences of the preferred
and common stock Of the new COMPANY
under which each class of stock will
have one vote. It also states that as
certain concessions are involved by
all parties concerned. unless the merger
plan is carried out as contemplated on
or before June /. 1929. each party is
restored to complete liberty of action
and shall not be deemed prejudiced b.
any concession made.
Explanatory Letter Included.
Accompanying the agreement was a
lengthy explanatory letter signed by
Mr.. Wilson, in which he outlined the
history Of the merger negotiations the
purposes Of the proposed consolidation
and his interest in vigorously sponsor
ing plan Of consolidation
Mr.. Wilson explained that the $50
000. 900 agreed valuation in the plan of
merger represents the deprecated value
OF the physical properties of the two
traction companies. although they are
entitled TO a rate base far in excess
OF this sum" He also pointed ont his
original plan for coupling guaranteed
return OF Z per cent with this valuation
was abandoned because il was learned
through discussions that ii would meet
with "insurmountsble disfav6r'' The
new company, he said, wants nothing
more than the right TO earn a fair re-
turn on the value of its properties.
The purchase Of the Washington
Rapid Transit Co.. of which he owns
SO per cent Of the stock, Mr.. Wilson
said. will not add a dollar to the rate
base established in the case Of the trac-
ton companies alone. This company.
ne explained. is to be absorbed by the
new company. purely and solely as A
further concession to the larger effort
ard without one cent Of profit 10 him
self
Seeks No Office for Self.
Mr.. Wilson further added that he
wanted no Office In the new company
would not even consider any oyertures
made 70 him TO accept.
The purposes OF the merger. Mr.. VIII
son explained. are fourfold First. TO I'M
prove service: second, TO convert inif
beneficial use the economic loss nov
resulting through multiple operation
third TO aid in the esthetic and eco
nomic development OF the National
Capital. and fourth to provide adequate
protection TO the owners OF the transit
properties.
There has been agitation in Wash
ington for street car merger for "a
years. he said. and the blame for moi
bringing il about can be placed equally
on the owners and the public, Certain
oyerzealous and inexperienced citizens
have exhibited tendency to disregard
established business fornulae and prac-
tice and TO advocate principles totally al
variance with the statutes made and
provided for just such eases" he de-
clared'
The merger agreement has been
printed In pamphlet and will be dis
tributed 10 the stockholders Of the two
traction companies. who will meet
March IS 10 consider IT, Stockholders
in the Capital Traction Co. however
will not receive copies Of the merger
agreement until next week because oi
a provision In the bylaws o. the com
pany which forbid the issuance Of no
tees until FIVE days after The stock
transfer books are closed These books
viii be closed tomorrow
Wilson's Letter In Full.
Wilson'S letter 10 Chairman Childref'
Of the Public Utilities Commission
which ne sent forward With the merger
plan. Is as follows: