Evening star., 1928-02-28
PAMPHLET BACKS
CAR MERGER PLAN
Analysis Sees Lower Fares
if Proposed Combine Is
COnSummated.

The proposed merger of the Washing
ton transit lines will benefit both the
public and the stockholders. according
to pamphlet containing an analysis
Of the unficatiOn agreement which
made It's appearance in financial cir
cleS today as a compliment Of the
Y, f. Booker Co, investment bankers
Coming as 1t did on the eve Of the
initial hearing on the merger plan be-
fore the Public Utilities Commission, the
pamphlet was studied with keen inter-
est by attaches Of the commission and
other public utility experts. who viewed
it as a strong argument in defense OF
The proposed consolidation. The pam
Dhlet pointed out that there appears to
BE every probability" that the street
car riding pubic must be prepared 20
nav higher fares in the near future If
there is no merger as neither the Capt.
tai Traction Co, nor the Washington
Railway e. Electric Co. Is earning any,
where near the per cont return AL
lowed by the Public Utilities Commits
sion.
1T Is possible that the fares may b.
increased even If there is merger It
said. "All the available data. however.
indicate that the amount OF increase
would be considerably less un1-T a
merger than it will be if there Is no
merger.
Valuation Is Less.
There are two very good reasons
why the public will pay lower fares
under the present merger plan than 1t
will pay If the companies continue TO
be operated separately. The first rea-
son is that the proposed merger pro-
yidcs for a combined valuation Of
$50 900 600. which is $l2.00000 less
than the separate valuations OF the
two companies. Irrespective Of the rate
of return which will ultimately be
earned on the valuation, 1t is apparent
that a s50,000,000 valuation will pro-
vide lower fares for the Washington
public than a S62 100000 In addition
10 this. the consolidated company would
be able to effect substantial savings
through economies IN operation ana
also have It's expenses reduced tnrougn
the proposed relief from the btroel Oh
paving the salaries OF crossing ponce
men and Of paving between the tracks.
"Whateyer savings are derived from
these sources-and they would be con-
sidcrable-wil tend TO further lower
tho ultimate cost Of street car service
TO the public
Some criticism has been made ot
the clause in the merger agreement
which provides that the new company
shall have the right 10 earn Z per
cent return on the proposed So0.ooo.o0o
valuation. II should be borne IN mind
that this request for the right TO earn
per cent return is in no sense
guarantee OF such return. The COM
panics as constituted TODAY ALREADY
have the legal right to earn I per cent
on their valuation and the sum OF these
valuations Is far in excess OF the pro-
posed $50 900 900 valuation.
Better Transportation.
we believe. therefore that the pub
| lie viii get better transportation AZ a
| lower cost under the present merger
than can reasonably be expected with
continuation OF separate operations.
From the standpoint Of the stock
holders We believe the merger is de-
sirable--frst because the best inter-
ests OF the public are closely allied with
the best interests OF the companies.
aud, second. because the consolidated
company would be in strong position
TO meet competition and would have
The benefit OF the general good will OF
the public. which might be expected 10
result from improved service
while stockholders of the three
companies will appear To be making a