Evening star., 1928-04-18
No Merger This Session.

/ Sentiment Of the Senate District COM
miitee expressed yesterday and the SEN
timent Of the House District committee
/ expressed today seem to have decided
that there will be no action at the pres
ent session of Congress permitting a
merger Of the traction companies in
Washington.
The one hope of expediting action
through joint hearings so that there
might be, time to bring the question up
in both House and Senate before ad-
journment has, apparently. been frus-
trated. Extensive hearings are in pros
pect. However, those who are eager for
perrnisSive legislation removing the ex-
listing legislative barrier to n merger
foresee that any action taken at the
present session which viii be adjourned
June 8, or earlier. brings this meas
ure so much nearer 10 possible passage
! in the second session Of the same Con-
greSs which meets on the first Monday
in December.
on the merger agreement entered into
between the Washington Railway &
Electric Co. and the Capital Traction
Co. with the merged company given
authority 10 buy the Washington Rapid
Transit Co, is simply this-Congress
realizes that the Public Utilities Com
mission has passed the buck" to Con-
greSs, and the House and Senate Dis
trict committees are going to conduct
hearings al over again so as to be sure
the rights Of the people are safeguarde9
in the basis OF agreement.
OF paramount Importance is the val
uation Of $4,000. 900 carried In the
agreement because this figure would be-
come the initial rate base from which
fair return on the investment would
be figured. To this additional capital
would be added from time TO time, with
provision for an immediate increase OF
$4,000. 600. II this valuation is high. OF
course. the rate per car ride figured
upon fair return on such excessive
valuation would be unfairly high for
the car rider. II was this phase Of the
untncation agreement that was attacked
particularly at the public hearings by
the chairman OF the utilities committee
Of the Federation Of Citizens Asso-
Citations
In discussions By members OF the
House District committee. those who
have made a particularly close study
Of the street railway problem here. such
men as Representative Gibson, Repub-
ncan. OF Vermont and Representative
Hammer. Democrat. Of North Carolina,
have protested vigorously that the $50
COO 900 valuation is altogether too high
and Is many millions In excess Of the
actual replacement value" and that .
close engineering study must be made
This. alone. would take up much more
time than remains before the get
away date set by Congress leaders.
A second and related problem is over
the rate TO be allowed as a fair return
On whatever may be decided upon az
the fair valuation OF the merged COM
panies Originally rate OF 7 per cent
was written into the agreement. but the
Public Utilities Commission had this
changed 50 as to authorize them TO de-
termine what viii be fair return for
the consolidated company 70 be allowed
70 earn.
The third matter Of malo importance
to be carefully considered by the COM
mitteeS of Congress is that the merger
agreement would automatically saddle
an additional financial burden Of ap-
proximately s2O0, 900 upon the taxpay-
ers. The agreement proposes 10 re-
HeYe the traction companies Of this
amount of taxes and shifts II 10 the
taxpsylng citizens. This is the amour.
the two street railway companies now
pay for salaries Of crossing policemen
and for paving between and q foot on
each side Of their car tracks.
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