Evening star., 1928-12-20
Transportation Companies
Expected to Offer to Make
Certain Changes.
SEEKING RATIFICATION
AT-cURRENT SESSION
Concession on $50,OOO,000 Initial
Rate Base for Consolida-
tion Doubted.

The transportation companies may
agree TO certain notifications in the
pending transit merger agreement III
order to assure it's ratification at the
present session of Congress, it was
intimated today in public utility circles.
The offer to make the changes, it
was said, likely will be included in the
report the companies are now preparing
for the Senate District committee in
answer to the merger reports of the
Federal Bureau of Efficiency and DR..
Milo r. Maltbie, New York valuation
expert, whose severe criticism of the
unit1cation agreement threatened to
jeopardize its APPROVAL by Congress.
The companies reply to the two
merger reports is being drafted by Brice
Clagett, who with William Gibbs Nc
Adoo have been the legal advisers of
Harley P. Wilson in the unification
negotiations. Clagett said today that
the report probably would be submitted
to Senator Capper before the close of
the week.
Details Not Disclosed.
what alterations the companies might
consent to make in the agreement were
not disclosed, although it was said that
they undoubtedly would not Weld in
insisting that the proposed $5OO 900. 900
initial rate base for the consolidated
company is fair and equitable. The
Bureau of Efficiency approved this
figure, but Maltbie in his report de-
clared it is not necessary to determine
valuation in advance of the consllm- :
nation of a merger.
Ihe notifications, therefore, it was
indicated. would be confined to certain
provisions in the agreement attacked in
both the Maltbie and Bureau of
E|nclency reports. The EFFICIENCY
bureau recommended three changes.
one relating to theprotision for setting
up the depreciation account of the new
company, another to clarity the con-
tracC under which the new company
WOULD obtain power from the Potomac
Electric Power Co. and the third deal
ing with capitalization.
The bureau said that there. sisoulsa
be provision IN the agreement for a
continuity of accounting for deprecia-
tlon, ana that the excess Cf current as
sets contributed by the Washington
Railway & Electric and the CAPITAL
Traction companies should be set up
by the new company as funded re-
serve without issuing stock against it..
AS to the power contract, the bureau
suggested that it provide that certain
units OF measurement be used in COM
putting the cost of power to the new
company and that the new company be
granted its just proportion of future
decreases in power production costs.
vagueness Cditicized.
Dr.. Maltbie also criticized the vague
ness of the power contract clause. de-
claring 1t to be difficult of Interpretation
and suggesting that the subject of fu-
ture power rates be left under the gen.
eral authority granted the Public Util-
tiles Commission to prescribe rates.
The car companies, it was said, are
willing, in the interest of merger, to
make reasonable" concessions to re-
move the objections of the experts,
realizing that their serious attempt to
bring about consolidation might other
wise end on Capitol Hill unless the uni
flcation pact is ratified by March 4.
Failure of the merger also will revive
the higher car fare bugaboo, as the Pub
lie Utilities Commission has granted the
Capital Traction Co. the privilege CT
renewing its application for 10-cent
fare after March if Congress does not
ratify the unification agreement.