Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-06
CONFERENCE SPURS
MERGER SOLUTION
No lnsurmountabIe Barrier
to Agreement Is Seen
by Vandenberg.

Possibility OF reaching an agreement
on plan for merger of the street rail-
way lines at the present session of Con-
gress appeared to be brighter last night
as a result of conference which Har-
ley P. Wilson. sponsor of the pending
unification agreement, had late yester-
day with Senator Vandenberg of Michi-
gan, a member of the Senate subcom-
mittee handling the problem.
At the last meeting of the subcom-
mittee Senator Vandenberg presented
memorandum to the subcommittee out
lining his individual views on the
merger problem. The subcommittee
submitted this memorandum to the
traction officials along with the other
reports 1t had received and on which
the comment of the companies was re-
Quested.
Details Not Divulged.
Mr.. Wilson called on Senator VAN
denberg yesterday for the purpose Of
discussing the contents of the mem
orandum and, while the details dis
cussed during the hour and half they
were together were not divulged, Sem
ator Vandenberg later made the follow
ing comment on the present situation
I'm my opinion, there is no insur-
mountable reason why in the near fu-
ture there cannot be an agreement upon
an amended merger basis, which, while
fair to the corporations. will protect
every public equity in behalf of which
we have been contending.'
The particular phases of the merger
dealt with in Senator Vandenbergs
memorandum have not been made
known.
Valuation Held Uncertain.
Shortly after Congress assembled in
December, however, Senator Vanden-
berg indicated that he was considering
whether it would be fair to authorize
a merger on status quo basis. leav-
ing for determination as soon as prac-
ticable after merger factors which he
regarded as uncertain at the present
time. At that time, the Senator in
Dictated, he regarded the $4,000, 900
valuation provided for by the pending
plan as one of the uncertain factors
which should be left for definite de-
termination by a revaluation immedi-
ately after the merger, with unified
sing the problem on that occasion he
also referred to the economies or saw
ings to be expected from unified oper-
alton as another element that could
only be determined accurately after
the plan IS in operation.
Mr.. Wilson made no comment upon
leaving the conference with Senator
Vandenberg yesterday.
Two other developments in the mer-
ger situation yesterday were:
Receipt by Senator Capper of letter
from Peoples Counsel Ralph B. Fle-
harty advising him that the existing
franchises of the separate companies
are not limited as to time, but have
attached to them the provision that
Congress has the right to alter, amend
or repeal them. Mr. Fleharty told the
Senator that the pending merger legis-
lation would transfer these franchise
rights to the new company but would
not enlarge or extend them.
Comments to Be Filed.
Receipt of definite word from DR..
Milo r. Maltbie, the subcommittee S
expert, and from Herbert Brown, chief
of the Bureau of Efficiency, that both
would be ready to file tomorrow their
comments on the reply which the COM
panieS made a week ago to the original
reports of DR.. Maltbie and the Efficiency
Bureau on the pending plan of merger
Senator Capper had asked Mr.. File
harty whether the provisions authoriz-
ing the new company to incorporate
under the District code would give the
company an indeterminate or perpetual
franchise.
The peoples counsel drew a distinc-
ton between the powers of corpora
ton as expressed in its charter, and the
right to enjoy franchise, which, in the
District, can only be conferred by Con-
gress or some delegated authority.
Mr.. Fleharty explained that while the
new company might under the District
code obtain charter which would be
perpetual, ''its perpetual existence as
corporation would be entirely indie
pendent of any separate franchise rights
that might be transferred to the new
corporation by virtue of the agreement
and would not make the franchise rights
any more perpetual than they now are. "
Effect Is Explained.
The effect of the pending merger
legislation, he said, would be merely
to express the consent of Congress to
the transfer of the existing franchise
rights to the new company.
With the statements due tomorrow
from DR.. Maltbie and the bureau of
efficiency, Senator Capper will be pre-
pared to call the subcommittee to-
gether within day or two, and at the
next meeting it is expect The Sena-
tors in direct charge - 49, .'~oblem
will have reached tn stage whe. they
can begin detailed consideration. The
situation probably will begin to take
on more definite shape by developments
during the coming week
The companies letter agreed to some
of the changes in the agreement
recommended in the original reports of
DR.. Maltbie and Mr.. Brown, but upheld
the fairness of the S50,000,000 valua-
ton, and commended the companies are
entitled to have an established rate base
fixed until revaluation is made. In
the agreement the fixed valuation would
have duration Of 10 years. and the
letter from the companies stated that
the most they should be asked to do
would be to shorten the time if it is
found revaluation could be put into
effect in less time.