Evening star., 1928-12-30

agreement as written 1areS Woulu uot
be changed for one year after merger.
What the condition Of their properties
would be during the succeeding year or
more which might be necessary to COM
plete the revaluation the companies do
not know, but past experiences have
taught them that If, because OF IN
creased operating expenses or other
considerations, they are forced after
merger to ask for an adjustment in
rates, such adjustment certainly would
be opposed on the ground that they
should wait for the completion Of the
revaluation.
Foresee Unfair Advantage.
"The companies very earnestly urge
that. to bring about such situation
would be taking a decidedly unfair ad-
vantage. Public utility corporations
have stockholders, Just as do other cor
porations. Such stockholders are en-
titled at all tunes to know the basis OF
their rates. They have such basis at
the present time. They will again have
such a basis after q new valuation is
made. What they require Is basis until
a valuation can be made. II a valua-
ton 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 shortened to such lesser
time.
"Dr. Maltbie pleads that the public
has certain rights and any plan Of uni
f1cation which alters there rights would
be open to criticism. This the compa-
nies most heartily concede, but respect
fully suggest, as owners of the proper
ties involved, that they, too haverights
which are bound to be respected. It
should be borne in mind that merger
can be accomplished only by the volun
tary initiation of the companies, and
their most fundamental right is to
guard against penalties in any way i'm
posed upon them merely as result of
their willingness in the public interest
to so merge.
1.-THE issue in this matter, therefore,
is entirely clear. The street car COM
panies consider that today they respec-
lively have rate bases duly and legally
established on which they have status
before the regulatory body and the
courts They believe just as strongly
that if they agreed to merger without
a clear-cut recognition the existing
status shall be maintained until revised
through the orderly process of law, 1t
would be contended that no such status
exists until a new valuation is made.
The opponents of such recognition ad-
nit by their arguments that this Is true.
Under the merger agreement, present
rates of fare are to be continued for one
year. During that time important
changes in the property of the COM
panies undoubtedly will be made. Many
such changes probably will be made in
the general public interest without any
relation to street car or bus earnings.
Immediately after merger, the public
will have present street car transfer
charges eliminated and improvements In
service begun. The companies nope
that such changes will so attract traffic
and reduce expenses that no rate
changes will be necessary. But they
cannot say with certainty that this Will
be true, partly because the changes
after merger will be largely in the hands
of representatives of the public. But
primarily because they cannot forecast
the future. They are willing to con-
tinue operating on their present basis,
but are unwilling to go into merger
without an established rate base until
a new valuation Is made"
Answering another question raised by
DR.. Maltbie the companies say they
believe the intent of the clause dealing
with the method of adjusting the rate
base as property Is added or retired
is perfectly clear" and that undount-
edly the interpretation OF the terms
used in this clause will be made by the
Utilities Commission.
The companies point out that the
Bureau of Efficiency approves the House
amendment to the merger resolution
authorizing the commission to establish
reduced fares for school children. The
letter of the companies adds that DR..
Maltbie does not mention the subject.
The companies tell the subcommittee
that the question raised by DR.. Maltbie
as to how provision should be made for
settlement of injury and damage claims
outstanding at the time Of merger Is not
a serious one. Generally speaking, 1t
seems only proper that the new COM
pany should carry on and settle the
liabilities of the old companies as pro-
vided in the contract" the letter OF
the companies stated.
Agree Merger Is Important.
The companies closed their commu-
nication, as follows:
I'VE feel it our duty to call attention
of the subcommittee to the very definite
statements made both by the Bureau
Of Efficiency and by Mr.. Maltbie that
a merger of the transportation facili-
ties of the District of Columbia would
very greatly benefit the public. We
agree with those conclusions. We have
worked steadily for the last year to
bring about a merger in response to
the demand of the public and Of the
Congress and Of President Coolidge in
his message of December s, 1927, to the
Congress. We hope the Congress will
authorize the merger"
In the early part of the letter, the
companies emphasized that the present
discussion does not involve the addi-
ton to the local community Of new
entity, but seeks In reality a change in
form rather than in substance Of one
Of the oldest and easily the largest of