Evening star., 1928-05-05
CONGRESS- POWER
TO FORCE MERGER
IS BEING STUDIED
ZihIman Asks Corporation
Counsel for Opinion on
Possible Changes.
REPLY FROM BRIDE
Is EXPECTED MONDAY
Members of Committee Foresee
Ruling as Giving Them Right
to Alter Pact.

The question of Just what Congress
can do to force merger Of the street
railway companies in Washington is
being given serious consideration BIZ
members Of the House District COM
mittee
Chairman Zihlman has already asked
Corporation Counsel Bride, by direction
OF the committee, whether the House
District committee has authority to
change IN any respects the unifcation
agreement which is part OF the merger
proposal now under consideration. A
formal reply from the corporation
counsel is expected Monday 1t is un-
derstood by members Of the committee
that the opinion viii be that the Dis
trict committee can make any change
It desires in the unihcation agreement,
but there is no assurance whatever that
the companies viii be willing 70 ae-
cept such changes and 70 carry out
the merger along the lines provided
by such changes.
CounSers Opinion Sought.
This question was brought I'd ar a
recent hearing when a doubt was raised
as to whether the committee had any
authority to amerd the unihcation
agreement in any respect AS a result
OF the difference of opinion, Chairman
Zihlrnan was instructed 70 ask for q
formal opinion by the corporation
counsel. Some members Of the COM
mittee believe that when this opinion
has been received the question Of 9
1Gv v=-sn
ously discussed.
Col. Harrison Brand. jr.. Of the Pub
lie Utilities Commission explained to
the committee today that the stock and
BOND issue OF the new company under
the propoSe1 traction merger would be
only $4,000 In excess OF those out
standing IN the two companies.
Demands Valuation Dispute End.
Confronted with a charge ey William
/ Mex. Clayton that the excess violated
/ the Law TO the extent Of approximately
| ST 600, COO. Chairman Zihlnan demand
ed that the dispute be sestisa dafsnlteiv,
/ ewing % the wide discrepancy n the
| figure previously given by the Pubic
Utility Commission. The matter viz
/ tually ended when the spokesman for
| the Federation of Citizens Associations
what bonds of The Washington Rail
/ way s. Electric Co. should be emitted
| front the estimate without further
ANALYSIS.
Mr.. Clayton offered as the basis for
his figure of S45 COO. 900 as the combined
stock and bonds Of the two companies
the statement made by Harley p Wilson,
director Of the North American Co.
and sponsor OF the merger plan. Brice
Claggett, one Of the attorneys for Wilson.
denied this and explained that Wilson
was fully in accord with the capitaliza-
ton figures Of the Public Utilities Com
mission.
Most Of the days session was devoted
70 wide-ranged discussion OF the cap
italiZation.
At the outset Chairman Zihlran read
from the record that the Public Utilities
Commission chart had placed the COM
eined stock and bonds Of the TWO com
panies at $5i.756, coo. q difference %
s6.04S000 IN the figures given by Clayton
in making his charge.
Brand Submits Figures
Brand said the difference vas repre-
sensed in bonds OF the Washington Rail
way s. Electric Co. secured by common
stock of the Potomac Electric Power
Co. on which the new company Is %
pay interest Clayton excluded IhsSss
bonds, he said. from his computation.
Brand gave as the combined bonds So
TS6. 900, against SiS,00o.ooo rs given o.
CLAYTON. The latter explained ne had
gotten his figure from Wilson's STATE
msne.
In an explanation 10 the COMMITTEES
as 10 whsther the proposed issuance
actlally exceeded the outstanding
~
that depended entirely or the anso9at
TO be Issued for net current assets. Il
the $s,4ol,OO0 issuance proposed -
cover track charges lS correct, ana Ess
assumed 1t was, Brand said the excess
would probably eS only $9@c00
Ralph 5 Fieharty. peoples coU,fSsl-
recalled 10 the stand Was ASKED y Ne
had taken the necessary precautseSsS to
protect the rights q minority Ss<SS~
holders He explained 20 Representa-
tive Gibson of Vernon. that ne Was
not expected under the 2aw @ eon~
slider the interest Nf these SSocS0>.GS<S
When Gibson said at least G.9oo q
them lived In Washington anG L SEN~
peared evident 90 him thar their n
. tsgeStS should have eSSD taken into
consideration. Flehaysy said he had tea5
that their righsS were amply protected
! under the merger agreement, We
think We have discharged cUg CGtaeS
q them. ne said after explaining that
he had made necessary INQUIRIES
ASKS Wilson Be Called.
Agr. Clayton UgSeG thAs Harley :
Wilson be summoned before tae coln-
mittee on the question of capitalization.
and while no decision Was rendered ~
the committee. tt Was indicated lbs
would be eoae after the hearings Fe~
SunaeI Monday,
Both morning and sIteT10o0 sessions
Of the hearing oa the mcySer pEoeoSSl
are to De held Monday ana Tuesday
oy the House DgStIict ccnlMitSse. AZ
the request of Chairman Italman the
House today granted permission Ter sAe
District committee 70 SlE during SESSIONS
eG the NouSe, This Is dene III oreer
60 expedite committee Consideration -
the merger proposal IN an egfert s. ges
is passed before tke close cf the pres
ems session. which is now planned Eos