Evening star., 1928-05-07
DOUBTS FARE RAISE
IF MERGER PASSES
Hanna Says Economies Un-
der Plan Might Prevent
Necessity for Increase.

John II. Hanna, president Of the Cap
itai Traction Co, assured the House
District committee today that it is
traction merger plan will prevent any
necessity for an increased rate Of fare
at all"
On the other hand, he pointed out.
failure of Congress TO approve the
merger at this session would place the
Capital Traction Co. in position OF
being compelled in very short time to
apply 10 the Public Utilities Commits
sion for a higher fare. based on Its
present valuation as determined by the
courts.
Mr.. Hanna explained this was not
meant as a threat to obtain approval
OF the merger. adding that the Capital
Traction Co, in justice to itself and rs
stockholders, would not be able to post
pone an application for an increased
rate any longer.
First Time ON Stand.
,Testifying for the first time at the
merger hearings which are approaching
a close, Mr.. Hanna made q clear cut
statement expressing the point OF view
OF the traction companies regarding the
issue which has been raised since the
merger question was first brought up
before the Public Utilities Commission.
Confident that the commission would
grant an application for increased fare
on the basis Of his company's earnings
OF less than per cent, Mr.. Hanna said
the first immediate public benefit from
the merger would be the saving Of
thousands OF dollars. Under the merger
agreement the present fares would have
TO continue a year, he pointed out. and
since the policy OF the commission has
been to keep the fares OF the two COM
panies on the same basis. he assumed
an increase in fares to the Capital
Traction Co. would result In similar
increase for the Washington Railway g.
Electric Co.
Application Postponed.
Last September the Capital Traction
Co. applied for an increase, he pointed
out, but the application has been post
poned In view OF the merger negotia-
tions. Unless the merger is approved,
he explained, 1t would be impossible
10 delay action any longer in justice
TO the stockholders.
Mr.. Hanna declared the most impor-
tant issue raised at the hearings was the
question why any valuation at all should
be written into the merger agreement.
He explained the S50,000.000 rate base
was put In at the companys insistence
20 as TO get the consent of the stock
holders TO merger
He explained the stockholders OF the
Capital Traction Co. would have 10 give
up their stock In exchange for holdings
In the new company and that q valu-
alton base was necessary as definite
yardstick 10 measure what they would
get In return
THE stockholders know the value OF
the Capital Traction Co and feel that
they have an equity OF about SiTO Il
share In It." he said They would not
have approved the merger II they uidnt
get some dividends"
At the outset OF the hearing today
Acting Chairman Underhill called upon
representatives OF the local trade bodies
and labor unions. but none was present
In the absence of Harley p Wilson. q
director of the North American Co. and
owner of the Washington Rapid Transit
Co. II was decided TO hear the traction
ofiiclals. Mr. Hanna win be followed ON
the stand by william r. Ham, president
OF the Washington Railway a. Electric
Co.
Cites Advantages,
When he took the stand, Mr. Hanna
first told the committee that the North
American Co, which has an effective
control Of the WashinEto, Railway a.
Electric Co, owns only between and
per cent OF The Capital Traction stock
He declared The advantages to the
public under unified operation would be