Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-23
MaItbie Plan Referred to Full
Committee for Blaine
Proposal Study.
VALUATION QUESTION
INVOLVED IN RAIL CASE
Wisconsin Member May File Mi
nority Report if His Idea
Is Not Ratified.

The rewritten street railway merger
plan was ordered favorably reported
to the Senate District committee today
by the special subcommittee handling
the question in the form in which 1t
was drafted by DIR. Milo R. Maltbie,
leaving to the entire committee the
decision as to what should be done
with the proposal of Senator Blaine,
Republican, of Wilconsin, to place in the
merger resolution new rule of valua-
ton.
The essential features of the plan
as approved by the subcommittee are:
1t omitS all reference to a fixed valua-
ton for the new company, providing
instead that the Public Utilities Com
mission shall arrive at value for the
merger company within two years.
Will Retain Present Fare.
1t provides that street car fares shall
not be changed during the two years In
which the revaluation is being made
except that free transfers would be
issued between street car lines, i'm
mediately following the merger. The
plan submitted to Congress originally by
the companies would have fixed the
value of the property at $4,000, 900 for
a ten-year period, with the present rates
of fare to remain unchanged for one
year.
The Blaine amendment which was
discussed informally at the meeting OF
the subcommittee today would provide
in substance that the Public Utilities
Commission should base future valua-
tionS on the theory of the investments
prudently made. This question is in
volved in the O'Fallon case now pending
before the United States Supreme
Court, growing out of valuation of a
steam railroad by the Interstate Com
merce Commission.
If the Senate District committee de-
cides to leave the Blaine amendment
out of the merger resolution, Senator
Blaine, It was indicated today, would
file a minority report on the merger
plan in the Senate.
Chairman Capper announced he
would call the full committee to meet
Friday morning to act on the merger
as drafted by the subcommittee. He
also announced that he would tele-
graph DR.. Maltbie, the committees ex-
pert, asking his opinion as to the wis
dom of including the Blaine amend
ment in the merger resolution.
Stockholders Must Approve.
Even If Congress passes the rewrit-
ten merger resolution it would still have
to be ratified by the stockholders of
the companies before a consolidation
could be effected, since it differs sub
stantially as reported by the subcom-
mittee from the agreement originally
reached between the companies.
1t is believed by some members Of
the subcommittee that If the Blaine
rule OF valuation should be placed in
the merger resolution there would be
less llGellhood OF a merger being car
ried out.
Following the meeting today, the sub
committee made public the text of the
revised resolution as drafted by DR..
Maltbie, showing all Of the changes that
were made in addition to the essential
features referred to.
1t contains new clause to take care
OF damage claims pending against the
two companies at the time of the mer-
ger by directing that the new company
shall set up reserve out of its net
current assets to liquidate these claims,
and that the amount of common stock
TO be issued at the time OF merger shall
be decreased by the initial amount Of
such reserve.
Contains Power Clause.
1t contains the full text of the new
power clause. as follows:
THE Washington company will cause
the Potomac Electric Power Co., subject
to the approval of the Public Utilities
Commission, to enter into a power con-
tract with the new company. which
may include lease by the power COM
pany Of the power property which the
new company will have obtained as
being appurtenant to the transit prop
critics to be acquired by the new COM
pany: said new power contract shall
be effective as of the date Of closing
and shall provide that the Potomac
Electric Power Co.. its successors and
assigns shall at all times furnish an
adequate supply of electric power for
the maintenance and operation of the
transit properties of the new COM
pany and for power furnished to
other transportation companies; the
price to be paid % for SO per
cent of the electric power used
for the maintenance and operation
of the transit properties of the new
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