Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-09
SENATORS REJECT
| FIXED VALUATION
IN MERGER PACT
MaItbie Directed to Negotiate
New Contract With Trac.
ton Companies.
WOULD RETAIN PRESENT
FARE PENDING DECISION
Universal Transfer Proviso, How
ever, Would Become Effec-
tive Immediately.

The Senate subcommittee investigat-
ing the street railway merger question
today voted against including any fixed
valuation in the unification agreement
and directed DR.. Milo r. Maltbie, its
adviser, to negotiate with the companies
in an effort to work out new contract.
The action of the subcommittee meant
rejection of the clause in the plan a.
submitted by the companies fixing
$50.000,000 as the value Of the merged
company for period Of 10 years.
The resolution went further. however.
and declared it is the sense of the sub.
committee that "the merger contract be
written without any f1xed valuation"
Fare to Remain.
The resolution further declared the
subcommittee believes the factor of
value of the new company should be
determined by the making Of a new
valuation within two years.
Another definite principle laid down
Dy the subcommittee was that rates of
rare should remain unchanged pending
the revaluation. with a proviso that
universal transfers between car lines
should become effective Immediately.
The action Of the subcommittee was
taken Wnen 1t adopted by unanimous
vote OF those present the following mo-
,;o Eion OF Senator Vandenberg, Repub-
Il move that 1t be the sense of the
subcommittee that the merger contract
pc written without any fixed valuation:
tnat the factor of valuation be left.
without prejudice, to an actual yallIa-
ton which shall be completed In not
later than two years; that the rates of
fare, until a final valuation is made.
remain undisturbed except that the
privilege Of universal transfers. at least
between street railway lines. shall i'm
med1ately follow merger, and that O
resolution of the committee request the
Public Utilities Commission to employ
DR.. Milo Maltbie to supervise the actual
valuation"
Await Maltbie Conferences.
After adopting this motion, the SUBJ
committee adjourned to await the con-
ferenceS which DR.. Maltibie will seek
with traction officials.
1t was explained that the resolution
sets forth the view Of the subcomnlit-
tee on what 1t regards as the essential
question, and that the various other
phases Of the agreement as now pend
Ing are to be left to be taken up by
DR.. Maltbie when he confers with the
traction officials to see II q new agree.
ment can be written.
The subcommittee meeting was
attended by Chairman Capper and
Senators Vandenberg. Republican. of
Michigan: Blaine, Republican, of Wis
cons1n, and King. Democrat, of Utah.
One other member Of the subcommittee,
Senator Glass, Democrat, of Virginia,
was unable to be present.
It was recalled today that Senator
Vandenberg, who offered the motion
which the subcommittee acted on today,
presented a memorandum at the last
meeting Of the subcommittee two weeks
ago setting forth his view Of the prob
lem. 1t Is not known whether the
resolution adopted today contains the
point made by Senator Vandenberg in
his previous memorandum.
When the subcommittee met at 1890
O'Clock this morning 1t had before tt
lengthy written reports from DR.. Malt
bic, the Bureau of Efficiency and the
traction officials, setting forth their re-
spective positions regarding the pending
merger plan.
The action of the subcommittee car
rieS out the recommendations of DR..
Maltbie, who told the Senators a fixed
valuation should not be provided for in
the unification agreement. The Bureau
OF Efficiency. in its latest report, ex-
pressed the view that a fixed valution
would be desirable, although not essen
tail to the merger
The letter of the companies took the
position that since they have certain
valuation rights at the present time,
they should not be asked to enter a
merger without a fixed valuation, pend
ing the making of new valuation after
merger. Their letter also defended the
$50, ,0o0. 900 rate base as compromise
fair to all parties, but contained q Sug-
gestion that the companies thought the
most they should be asked to do would
be to shorten the length Of time In
which the fixed value would continue,
If 1t was found a revaluation could be
completed at an early date.
Confers This Afternoon.
Following the action taken by the
subcommittee, DIR. Maltbie held his first
conference with the traction officials at
2 o'clock this afternoon. The subcom-
mittees experts may have to leave for
California at the end Of this week on
other business, and In view of that, 1t
Is probable that an effort will be made
to carry on negotiations In relation to
the local merger as far as possible with
in the next day or two.
The subcommittee adopted the follow
ing resolution to give DR.. Maltbie the
necessary authority to proceed with ne
gotiations with the parties to the merger
proposal:
THAT DR.. Maltbie be authorized to
represent your subcommittee in con-
ferences with the utilities, in an effort
to reduce this action to actual form,
and that he also proceed In the same
manner with the balance of his recon-
mendations; the result of his efforts to
be submitted as soon as possible to the
chairman of the subcommittee for
further action of the subcommittee.
Nnw:cn - A;I Dnrk Hwoxry%h