Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-08-14


before him and then handed Mr.. Han
| ma a l2-page typewriter document.
Holding the same view" Col. Ladue
continued, 1.-The commission has pre-
pared a form of unif1cation agreement.
a copy of which now. hand you. and
ask you whether you and your COM
pany are willing to become parties to
1t. with such notifications as the COM
mission and the company may agree
upon
There was q whispered buzz all
around the room. Mr.. Dunlop was on
his feet. Gen. Patrick suggested adj
journment to give Mr.. Hanna time to
prepare his answer. But Mr.. Hanna
said he was ready to answer. He said
that the question was one for the
board of directors of his company to
to the question. The meeting ad-
journed.
Follows Harley Wilson Plan.
In its essentials the commissions
plan follows the original Harley Wilson
merger plan as modified by the Senate
District committee, but without the
amendments suggested by Senator
Blaine of Wisconsin. The document is.
in fact, a copy of the Senate joint reso-
luton embodying the merger plan, with
parts crossed out and other parts added
and underlined.
AS to the capital structure for the
new merged company, the commissions
Wilson plan, and also in the manner OF
distribution of the shares OF the new
company in exchange for securities in
the combining companies.
The first sharp difference that oc-
ours between the two plans is that in
stead of the new company agreeing to
purchase the Washington Rapid Transit
Co.. which operates the Sixteenth street
buses, at the price said to have been
paid for the company by Mr.. Wilson.
the new company undertakes to buy
the bus company, should the commits
sion later decide to order the purchase,
at an appraisal to be subject to the ap-
proval Of the company.
The plan provides that Immediately
on it's going into effect, free transfers
shall be inaugurated among street cars
and between street cars and busses OF
the merging lines and vice versa.
Otherwise, fares shall remain undis-
turbed for a period of two years. There
Is one further exception, that during
the two years the commission shall be
free to order a reduced rate OF fare
for school children should 1t see mt TO
do so. The Wilson plan contained no
provision for half fares.
No Valuation Written Into Plan.
No agreed valuation is written into
the commissions plan. Valuation is
taken care of by statement that all
rights accruing to the respective merg-
ing parties by reason OF valuation OF
their properties shall remain undisturb-
ed in the new company until such time
as the commission may make COM
plete new valuation of the merged prop
critics.
Careful regulations are drawn up for
the treatment of cash reserves in the
treasures Of the various companies IN
provisions that out of these reserves
the new company shall set up reserves
to take care of claims for injuries and
damages, depreciation. and so forth, at
least equal to the reserves of the merg-
ing companies. This provision Is not
in the Wilson plan and its omission
called for considerable criticism.
The Potomac Electric Power Co. Is
left out of the merger as under the
Wilson plan. The Washington Rail-
way 81 Electric Co.. which owns 100
per cent of the power company's voting
stock. would remain in corporate exc
iStence as a holding company for the
power company, after turning over all
Of its physical railway property and
railway franchise to the new company.
The Capital Traction Co. is to liquidate
and go out of corporate existence, turn
Ing over to the new company all its
property the new company becoming
responsible for its bonded indebtedness
and for bonded indebtedness assumed
by the Capital Traction Co.
Capital Would BE $50, 900. goo.
The new company, to be known as
the Capital Transit Co., will be incor-
porated under the laws of the District
Of Columbia. Its authorized capital will
be $50, O00, 900. one.half in per cent
preferred stock OF 500 par value, and
the other In common stock. But the
company initially may issue only $751;
$50, 900 of stock. OF this $12, 900 900 of
the preferred stock will be exchanged
share for share, for Capital Traction
Co. stock, and $l9,830,O0O common
stock will be exchanged for Washington
Railway and Electric Co. money, securi-
ties and property. In addition, the
company will assume responsibility for
SIS, 100000 In bonds of the respective
companies, making its total initial cap
Italia ton $40, e38, 900. This follows
rather closely the set-up provided in
the Senate resolution. Stockholders Of
the Capital Traction Co. are given the
option of taking either preferred stock
on a share for share exchange, or else
one-half share of common stock and
nine-tenths of a share of preferred
stock in the new company for each one
share of Capital Traction Co. stock.
This provision Is the same as that In
the Wilson plan.
The washington Railway & Electric
Co. undertakes, under the commission
plan. to furnish to the new company 50
per cent Of It's power needed for trans
portation at a cost less than the cost
of production, under contracts renewal
BILE in 10 to IS years. The other 81 per
cent is to be supplied on terms review
able annually by the commission. The
power company must also furnish the
transportatio company with power to
ftilfi1i coyftrA<fs with other railways In