Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-05
Senate Elimination of $780,
100000 Rate Base Also
Would Stand, Is View.
COMPANIES EXPECTED
TO INDICATE POSITION
Traction Denies Reports It Would
Accept Maltbie Plan in
Resuming Farley.

Any revamped plan for a uni1cation
of the Washington Railway 81 Electric
and the Capital Traction companies
which may come out of the effort of the
Public Utilities Commission to renew
the merger negotiations is expected to
be based on the old agreement which
expired June /, together with the modi-
fications recommended by the Senate
District committee, according to views
expressed today by persons in close
touch with utility affairs.
While neither of the companies has
vet formally indicated on what basis II
would consent to reopen the merger
discussion, it was pointed out that they
recognize the apparent futility of get
ting Congress to ratify any agreement
which failed to embody the fundamental
principles laid down by the Senate Dis
trict committee. The commission also
has let it become known that 1t would
not subscribe to the agreement as
originally drawn by the companies,
particularly if it contained the SoO,-
100000 rate base for the merged COM
pany which was eliminated by the Sen
ate District subcommittee.
Might Renew Negotiations.
The companies, it was said, probably
will indicate a willingness to renew the
merger negotiations on substantially the
same basis as they stood when the
agreement expired with the fixed valua-
ton and several other features which
were found Objectionable eliminated.
The traction representatives, however,
denied reports that they would accept
in toto the so-called Maltbie plan as
basis for new negotiations.
Under the merger plan as modified
by the Senate District committee, the
companies would consolidate without a
fixed valuation and the existing rate
of fares would remain undisturbed for
two years, during which period the COM
mission would revalue the properties.
Free universal transfers also would be
issued,
The Senate District committee also
wrote into the modified agreement a
new power clause defining the conditions
under which the electric current needed
by the new company would be obtained
from the Potomac Electric Power Co.
No StockhoIders' Action.
The modified merger agreement, it
was pointed out, had not been passed
upon by the stockholders of either
company when it expired by congress
sional inaction June l. Had Congress
approved the revised pact, it was eX-
planned, the stockholders would have
had to ratify it before the merger could
be consummated. Therefore, the COM
panieS are represented as feeling that
they can reopen the negotiations on
substantially the same basis as they
stood when Congress adjourned without
losing any further points in their
favor
The plan of the commission, it was
said, is to have new merger agreement
ready for the consideration of Congress
when it reconveneS after the compare
lively abbreviated Summer recess. If
all of the features previously found OBJ
Jectionable are removed before the
agreement goes to the Capitol, the COM
mission believes there is little nkeli-
hood of delay in its ratification.
The traction officials, it is indicated,
will oppose the resumption of the mer-
ger negotiations as a ground for the
commission to postpone consideration
of the application of the Capital Trac-
ton Co. for higher fare. The COM
ahead with its plan to begin public
hearings on the higher fare petition
July 20.
Higher Fare Seen First.
Harley P. Wilson, principal owner Of
author of the original plan of merger,
declared the railway companies are now
entitled to higher fare and that the
failure of the commission to grant an
increase would constitute the confisca-
ton of their property, since neither is
earning a fair return on their valua-
ton. II the commission refuses the in
crease, he pointed out, the companies
can resort to court action.
While Mr.. Wilson does not plan to
figure so prominently as heretofore in
the merger negotiations, he said he
would continue to do everything in his
power to bring about a consolidation
He does not believe much progress will
be made if the new plan follows the
same course as the old one when the
commission and both houses of Con-
gress considered it de novo.
Mr.. Wilson believes Congress should
delegate to the commission the author
ity to pass finally upon the merger
agreement or else set up a new group
which would have that power. Congress
as whole, he said, is not interested in
the merger Of the traction lines of the
District and the time of its members
should not be taken up with considera-
ton Of the details of a merger plan.