Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-19
REPORT OF BLAINE
ON MERGtRF|LED.
Senator Says Burdens on
Public 0utstrip Benefits
!, in Proposed Matter.

DECLARING tnaG The peleHIs 10 TIE
public in. the proposed street railway
merger >"are outstripped by the burdens
imposed upon the public" Senator
Blaine, Republican, of Wisconsin, today
filed his minority report on the subject
in the Senate. He said in his opinion
approval OF the pending legislation is
'.indefensible."
The, ma jority of the District commit
tee reported the merger favorably about
10 davs ngo in the form in which 1t
was revised by DR.. Milo r. Maltbie. and
Chairman Gapper has been promised an
opportunity ITO call up the question in
the Senate following the House reap
portionment hll.
Senator Blat3e argues for adoption of
his amendmentNo establish the prudent
investment method of valuation as
part of the mergAr resolution, on the
ground that the merger is being accom-
that legislation enacA,d later could not
deprive the car company of contractual
rights conferred by Congress at this
time.
The Wisconsin Senator also urged in
clusion of his other ! amendments,
namely:
One requiring the new company to
carry over to its books the ACCRUED de-
probation reserves of the existing COM
panies, and another STIMULATING that
the franchise rights created by this
resolution would terminate at the end
OF one year following repealI of the
merger resolution. If it should lever be
repealed.
Asserts Points Overlooked.
Asserting that the majority of the
committee overlooked two main pGopo-
sitionS when it was considering the
merger, Senator Blaine said:
"Dr. Maltbie and the majority con-
ceived the merger as an end. BY so
limiting their conception, and their con-
sideratidn of the problem they entirely
overlooked the two outstanding land the
MAJOR pro&lems-namely:
I'D That, the merger Is almost ex-
clusively financial set-up for the COM
panieS and thefE Stockholders.
"(2) That the merger is not one Gre
ated under limitations and restrictions
imposed by law, but is a merger created
by contract between the. Capital COM
pany the Washington company (and the
bus company. All that, Congress- is
asked to do is to appEoveS0f such con-
tract as modified by tho resolution.
When the three companies approve of
the notifications made by the resoiu-
ton, the merger still remains merger
by contract and not a merger und6r
limitations and restrictions by law.
THE only changes in the substantive
law made by the resolution are:
I'D The provisions of section 2. re-
lieving the merging companies Of
substantial part of their fair burden
for street and bridge maintenance and
improvements, as well as the cost of
policing street car intersections. These
costs, which are said to aggregate In
excess of 100000 per year. are at
present borne by the companies in ex-
change for the right to operate in the
public highways and to use public
bridges.
"(2) The establishment of practi-,
cal monopoly in mass transportation for
a perpetual period.
''(3) Permission Is granted to the
Public Utilities Commission to establish
reduced rates for school children. Ger
tain of the concessions demanded by
the companies and approved by the
resolution are in the nature Of contracts
with the United States, establishing,
property rights in the companies which,
may not be subsequently diminished by,
act Of Congress.
Cites ContractuaI Provisions.
Therefore, If this merger is approx
ed. the future regulation of the new
company win depend, not mainly upon
substantive regulatory laws, but upon
the provisions of the contract with each
other and with the United States. The
inviolability of that contract will be
sustained by the courts under our Con-
stitution Whenever an attempt Is made
to determine depreciation valuation.
considerations affecting the capital
stock and the capital investment, or the
franchise to use the streets, reference
must at all times in the future be made
to the contract. and the contract Will
be binding as against any provision of
the District utility law that may be
contrary to the contract.
1T is true that the resolution. in
section IL, provides: That Congress
reserves the power to alter. amend or
repeal this resolution Since this
merger is one by contract, that re-
serve power Is of no value. Congress
NAV repeal the entire resolution, and
in such case the status OF the new
company will be exactly what 1t would
be II the resolution were not repealed.
except in the instances have pointed
out"
Method Called IncOngruoux
Senator Blaine told the Senate. in
support of his valuation amendment,
that the existing utilities law In the
District is unlike the law in ANY other
jurisdiction, and that 1t lis the most
incongruous method Of valuation that
can be conceived"
His amendment. he explained, pro-
poses to put the regulation of utilities,
&c tn facfe aotirelv under the iNriSEiic-
ton of the commission.
THE commission" he continued. lis
equipped, through its experts. to carry
on its regulatory administrative Nnc-
lions. The court, as every one knows,
is not SO equipped. 1t cannot be s.,
equipped. Congress has never intended
to equip courts as administrative bodieSt
And, therefore. while the prudent in
vestment plan has been written into Thea
amendment, the main purpose OF theS
amendment is to meet the practical del
mands and to overcome some of the OBJ \
structions in the way of proper regula-
ton OF utilities