Evening star., 1933-08-13
TRACTION MERGER
DETAILS EXPECTED
WITHIN SHORT TIME
Financial District Studies Re.
ports of Possible New
Set-up.
AGREEMENT UNDERSTOOD
10 HAVE BEEN REACHED
Publication of Terms Believed
Likely When Commission
Approves Program.
BY HAROLD B. ROGERS.

BY HAROLD B. ROGERS.
With merger of Washington's street
railways imminent, the financial district
is busy with discussion and various re-
ports on the possible new financial
set-up of the proposed merger to be
known as the Capital Transit Co.
Terms are understood virtually to
working out the problem, and before
long it is anticipated that the whole
matter will be made public, probably
about the time it is approved by the
Public Utilities Commission. The terms
also must be approved by the stock
holders
Much interest centers around the
problem Of exchange of stock, but it
is understood there was a much more
difficult problem to solve in the deci-
sion as to what amount of bonded in-
Gebtedness should be turned over to
the new merger.
without question the whole issue of
$12,000,000 of capital stock of the
Capital Traction Co., par value of
500, will be exchanged on some basis
not yet divulged. for stock in the new
Capital Transit Co. This Capital Trac-
ton stock, which sold last on the
Washington Stock Exchange at 81, has
not paid dividend since July l, 1882
quarter. when 1t paid 25 cents a share
Prior to that it paid so cents on Janu-
ary l, 1882, and April /, 1882. On July
! and October l, 1929. it paid dividends
of SITS per share. and on January
and April l, 1880, s1.50 per share. On
July l, 1880. 81 per share was paid
and this amount was paid quarterly
4 Ar1y.S1 TrYlx
/, until January l, 1892, when it
dropped to so cents.
Sold as Low as 4.
Capital Traction stock last January
sold as low as around 4. After the
merger act was signed by President
Hoover it went up to 16, but because
of the slow negotiations in perfecting
the merger financial set-up it dropped
back, until last Friday it sold at 61s.
The Capital Traction Co. has out
standing only one issue of bonds, first
SIS, due 1947 in the amount of $685.
600. all of which, it is presumed. will
be assumed by the new merger.
= When it comes to consideration of
both the stock and bonds Of the Wash
1ngton Railway & Electric Co.. how
ever different situation confronts the
negotiators in the merger. The Capt.
tai Traction Co. is a transit operation
only. The Washington Railway &
Electric Co. is holding company it
self, having taken over not only a
series of former smaller railway lines,
but owning the powerful Potomac Elec-
trio Power Co.
The common and preferred stocks Of
the Washington Railway & Electric
Railway Co., because they represent
fhn NyryvIn npctr IA Nf
railway properties will probably there
fore not be involved in an exchange.
It is now considered more likely that
investors in either the common or pre-
ferred railway stock will hold to them,
while the new stock of the Capital
Transit Co. would probably go into the
treasury of the Washington Railway
& Electric Co.
Owns Full Control.
The Washington Railway & Electric
mon stock OF the Potomac Electric
Power Co., and owns separately its
street railway physical properties, will
simply sell its street railway properties
to the new company and receive in ex-
change stock of the new company.
This will leave the Washington Railway
g. Electric Co. with identically the same
stock capitalization which it now has,
the only change being that its street
railway properties will be represented
by the ownership Of stock in the new
company.
Common stock of the railway par
value of 500, now outstanding amounts
to $6,50O,000, last sold at 1853. A divi-
dend Of per cent per annum was paid
quarterly from 1925 to June, 1927,
when the quarterly dividend was in
creased from SIPS to SITS, or 81 an
nually.
The cumulative preferred stock Of
the Washington Railway & Electric
Co. at par value of 500 now is out
standing in the sum of $500 900 with
per cent annual dividend payable
quarterly. Preferred stock sold Friday
at 88. The lowest it ever reached was
73, and it always paid dividend.
In considering the bonded indebted
ness to be laid on the new consolidated
company, it is supposed that all of the
bonds of the subsidiary railway COM
panies of the Washington Railway &
Electric Co. will be taken over, and all
of the bonded Indebtedness Of the
Capital Traction Co. But the big Ques-
tion on the bonds arises over the
amount of the consolidated mortgage 4
per cent bonds of the washington Rail-
way q ElecCrlc Co., COtalulg SS,S40,UOc,
shall be taken over by the new merger.
s1,694,2oO in Treasury.
OF the total there is held in the
treasury $1,694 200. Interest is pay
able June and December /. They are
redeemable at los. and accrued inter-
est on three months notice.
Evidently in merger of the railway
properties only, it becomes apparent
that only a portion of this bonded in
debtedness of nearly $10,000,000 would
be assumed by the new merger in TAX
ing over the railway lines. In a previ-
Gus merger proposal Of about 1925, the
merger would have assumed about six
elevenths of the outstanding consoh-
dated mortgage IS, which then totaled
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