Evening star., 1928-12-06
MALTBIES REPORT ON MERCER OF TRACTION COMPANIES

. ~ &AA IN ~
: OF the amount Of net income that
| would be needed to provide various
rates Of return. He concludes that to
| earn a per cent return the, company
would require total net income OF So
| 100000, and that In order to obtain
| that amHGnt of net income "the new
company would have the right under
| the contract to increase fares appreci-
| ably"
Present Rate for Year.
The unification agreement provides,
however, that present fares shall re-
main in force for one year. Continuing
his discussion of fares. Dr. Maltbie
said:
What rate of fare would be neces-
sary to produce q net income of
$3,50GsS90 under all circumstances that
seem GKely to obtain in 1880 is Specu-
lative. The best estimate that 1 can
make Is that an Scent cash fare would
be required or some schedule approx
mately equivalent to l0-cent cash fare
with 4 tokens for 80 cents. 1t is in
teresting to note that these are the
schedules which the companies have
submitted to the Public Utilities Com
ditionS without unitication."
DR.. Maltbie gives lengthy analysis
of the court proceedings in the Capital
Traction Co valuation case, on the
basis of which the two railway COM
panieS claim a combined value of
S62 900 900. and declares that the record
presented in both the District Supreme
Court and the Court Of Appeals was
incomplete. defective and otherwise
unsatisfactory" He added that, What
ever may be the reason. it seems to be
admitted that the case was not
adequately prepared or presented upon
behalf of the public"
The following is the summary of
facts and opinions in support of con-
cluSionS:
This is the first time that an agree
ment has actually been signed by the
two companies and submitted for ap-
proval of Congress No one de-
nieS that with a unified system service
could be improved. the amount of prop
erty required adequately to serve the
public reduced. the costs of operation
curtailed and vehicular traffic accele-
rated and convenienced The gain to
the public would be eQualed and per-
haps exceeded by the benefits which
would accrue to the companies.
The question to be considered in this
report Is not whether uniflcation is de-
sirable, but whether the terms under
which it is to be effected are fair and
reasonable.
Bus Company Left Out.
The unif1cation agreement does not
in and of itself provide for the merger
or consolidation of the Washington
Rapid Transit Co. tbus company, but
declares that this company shall be
merged or consolidated with the new
company when and If the Public Util-
tiles Commission shall SO require.
Harley p. Wilson is to receive for his
stock $596,000 plus interest from Feb
ruary /. 1928. Disregarding interest.
the consideration is nearly three times
the par value of the stock. The agree
ment does not so provide. but it was
stated TO the Public Utilities Commits
sion that payment would be made out
OF current funds and not capitalized.
1t is important to note that such paw
ment would reduce the funds avail
able Tor unltlcation purposes by more
than 100000. II the net current
assets shall prove to be $2,40O.O 900 as
estimated, the reduction in available
cash would be a substantial one.
Advises against enactment by Con-
gress of that section of joint resolu-
ton which provides:
THAT Ihe Capital Transit Co. shall
be reasonably protected against COM
petition with any of its street railway
lines, bus lines or other forms of trans
portation by the Public Utilities Com
mission of the District of Columbia"
States that this might be construed
to prevent competition even by taxicabs
Cites Competition Value.
States further: 1.-THE agreement and
congressional resolution virtually give
the new company monopoly of street
railway and bus transportation, and
possibly of other forms of transporta-
ton in the District Of Columbia It
would be unfortunate II all passenger
transportation in washington or in the
control area were controlled by one
company Competition is a great slim
ulant Public regulation is not salts
factory substitute in ali respects The
tendency of monopolies is toward stag
nation.
THE proposal Is most unusual, and
there has been no demonstration In
my opinion, of any need for con-
tractual obligation to protect the new
company against competition. The
usual requirement In force in many
States is that new line of transpor-
tation may not be established unless a
certificate of public convenience and
necessity Is obtained from some ad-
ministrative authority, which possesses
discretionary power subject to appeal
to the courts.
1.-THE public should preserve its power