Evening star., 1932-02-25
KEECH DENIES CAR
MERGER TESTIMONY
OF GEN. PATRICK
Power Sale Clause Not Mold
ed on MaItbie Recommended
tion, Says Counsel.
EXPERT CONSIDERED
1T "BAD IN PRINCIPLE"
Long Letter to Senate Committee
Interprets Tenth Paragraph
Discussions.

Peoples Counsel Richmond B. Keech
In long letter to the Senate District
Committee today denied that the clause
in the pending street car merger bill
dealing with the sale of power to the
new company had the approval Of DR..
Milo r. Maltbie, formerly employed by
the committee to study the Wilson
merger bill. The letter referred to tes-
timony by Chairman Mason M. Patrick
of the Public Utilities Commission in
which Gen. Patrick said that the power
clause Of the present bill was nodded
on DR.. Maltbie's recommendation.
Taking issue with this Mr.. Keech said
that on the contrary Maltbie had found
the scheme bad in principle"
The point revolves around the tenth
paragraph of the bill, having to do with
the rates to be charged by the Potomac
Electric Power Co. for power to be sup
piled to the new merged company after
the merger. The paragraph provides
that for IS years after the merger the
power company shall sell to the merged
company So per cent of the power
needed at rates now used in selling to
the Washington Railway g. Electric Co.,
and the balance at rates to be fixed
from time to time by the Public Utilities
Commission. Mr. Keech wants this
changed so that the commission shall at
all times have power to fix the rates for
all of the power sold.
Recommendation Denied.
"In an attempt to answer the reasons
set forth by me for deleting the para
graph in question: the letter states,
''and substitute therefor a simple pro-
vision to the effect thai the Potomac
Electric Power Co. is required to furnish
powe- to the new company at such
reasonable rates as the commission may
from time to time fix, the railway COM
panies, as did Gen. Patrick, for the
Public Utilities Commission, stated that
DR.. Milo r. Maltbie recommended the
provision in question in his report to
the Senate Committee, and that the
provision merely preserves existing con-
tractual obligations.
"Dr. Maltbie did not recommend, as
was stated at the hearing, paragraph
10. In fact, in the report submitted
to the subcommittee, ne clearly indi-
Gates that it is wrong in principle
page 110 Of his report). A reading of
this report clearly shows that the rea-
sons ASSIGNED by me for deleting the
Carag-3ph in question are we'll sup.
ported by his report
Mr.. Keech then quotes many extracts
from the Maltbie report in support o'
his contention, and then goes on:
'As stated above, the report Of DR.
Maltbie does not warrant the state.
ments made by the railway companies
nor Gen. Patrick that the doctor rec
commended paragraph 10. The only
point In his report where he deals with
the 6S-37 per cent proposition is found
on page 110, reading as follows:
ET90uyavaY ~ n Il Aaefrohla fhof fha
arrangement should be continued and
that a corresponding share of the
power needed by the new company
should be purchased on the same terms
AS the Washington Railway & Electric
Co. now pays for what it uses for rail-
way purposes it would seem that a
simple method Of reaching this result
would be to apply the present power
agreement to a stated percentage (say
SO per cent? of all the power here
after used by the new company for
railway purposes and likewise to all the
power hereafter sold by the new COM
pany to other railway companies. AS
to the remainder of the power used, the
price to be paid could be fixed by the
Public Utilities Commission. This
body has power to fix rates for all
classes OF service and all general con-
sumers. Why should it not have power
to determine rates as between two
utiiities?'
Nature OF Statement.
"By no stretch of the imagination is
it possible to construe this as a recon-
mendation. He merely states, and
without holding or finding it to be So
that, If it is desirable that the ar
rangement should be continued, etc.
1t would seem that a simple
method of reaching this result, etc
He does not, however stop there, but
then deals with fundamental ques-
tons and concludes as quoted above
from page 10 with this statement:
important reasons why regulation
has superseded contracts are the need
for an adjustable method fitted to
changing conditions, which cannot be
foretold, the tendency of long-ter
contracts to become unfair and the
possibility of discrimination. If these
apply to the ordinary consumer; they
have still greater force in relation TO
contract such as proposed here, where
great changes are certain to occur"
When shown copy Of Mr.. Keech's
letter Gen. Mason M Patrick, chair
man of the commission, declined to
comment.