Evening star., 1928-12-30
Two Companies Offer to
Modify Agreement Relative
to Future Competition.
POWER RATE CHARGE
CLARIFICATION ACCEPTED
Establishment of Rate Base Pend
ing Fixing of Values Is
Asked in Letter.

DSI6nQlHB bHe SOU,UUU,UUU NdludJlOn
provided for in the traction merger
plan as "a compromise fair to all
parties" but offering to modify sections
of the agreement relating to future
competition and payment for electric
power, the traction companies late yes
terday filed with Chairman Capper of
the Senate District Committee their re-
ply to the findings of the Senate COM
mittee expert.
The companies contended firmly for
inclusion in the agreement of an es-
tablished rate base until new valu-
alton is made. The companies take
the position that each railway system
has rate base at the present time
and that the proposed merged company
is Untitled to an established rate basa
until revaluation of the merged
company can be carried out.
Early Valuation Urged.
The companies state in their answer
that sit appears to be conceded on all
sides that as soon as unification is
brought about. valuation Of the street
railway properties should be made"
adding that there is nothing in the
pending argcement to prevent such
revaluation from getting under way i'm
mediately after merged is effected.
After calling attention to different es-
Inmates of the length of time that would
be required to complete a revaluation
after merger, and emphasizing the COM
panies' right to definite rate base
during that time, the letter states:
IF valuation can be completed in
less time, the most that could fairly
be asked of the companies is to have
the continuance of the rate base short
ened to such lesser time"
The merger agreement as now pend
ing in Congress provides for continus-
tion of the $50,000,000 valuation for 10
years, with o stipulation that present
rates of fare would not be changed for
one year.
The letter was requested by the Sem
ate subcommittee as means OF obtain
ing the reactions of the companies to
the suggestions contained in the reports
on the merger plan prepared by the
Bureau of Efficiency and by DR.. Milo
r. Maltbie, New York utilities expert,
engaged by the subcommittee.
The reply covers IL typewriter pages
and deals to a large extent with the
questions raised by DR.. Maltbie. who
took exception to more Of the essential
features than did the Bureau OF Ef-
ficiency.
Further Comment Asked.
The reply was signed by William z.
Ham, president of the Washington Rail-
way e. Electric Co.; John H. Hanna,
president of the Capital Traction Co.,
and Harley P. Wilson. principal owner
of the Washington Rapid Transit Co.
who took an active part in bringing
about the pending agreement.
Immediately upon receipt OF the
traction letter Senator Capper mailed
copies of it to Dr. Maltbie and to
Herbert D. Brown, chief OF the Bureau
of Efficiency, requesting any further
comment they may care to submit TO
the subcommittee in the light OF the
companies views.
The Senator expects to hear from the
two investigators at an early date and
said he would call the subcommittee
to meet as soon as possible after the
reconvening of Congress to resume its
deliberations on the merger problem.
Whether the subcommittee meeting can
be held the latter part of this week,
will depend upon how soon DR.. Maltbie
and DE- Brown reply to the suggestions
in the companies letter.
With regard to the question of future
competition, the companies state they
have no objection to adoption OF DR..
Ill fnys V1rAFTtcfnF1
that no competing transportation line
be established without obtaining a GER
tificate of convenience and necessity
from the Utilities Commission. This
would be a substitute for the present
section providing for 1.-The reasonable
protection of the new company against
competition"
Both DR.. Maltbie and the Efficiency
Bureau recommended clarification of
the section defining conditions under
which the merged car company would
obtain electric current from the Poto-
mac Electric Power Co.
The companies said in the letter yes
terday they see no serious objection to
the alternative proposal of DR.. Maltbie
that the agreement be so modified as
to provide that the Washington Rail-
way g. Electric Co. shall cause its
subsidiary. the Potomac Electric Power
Co, to enter into contract with the
new company to furnish the same rela-
tive amount of power now furnished
upon the same terms now applied to the
w. r. g. E.. with the Utilities Comnis-
sion determining from time to time the
price to be paid for the power now re-
quired by the Capital Traction Co.
The companies suggested that the Ef-
fficiency Bureau recommended the same
end could be accomplished by pre-
liminary interchange of letters between
the parties in interest and the Utili-
ties Commission.
The companies declare that the sug-
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