Evening star., 1936-05-20

customers. It is a safe bet that
the North American CO. would not
look with favor on any disposition Of
the transit system that might i'm
pair their control Of the power COM
pany or adversely affect the status
of the traction lines as customer
of the Potomac Electric Power Co.
In entering the local utility field.
the North American went into the
open market and purchased stock
necessary to control the Washington
Railway g. Electric Co., with control
over the profitable Potomac Electric
Power Co., rather than transporta-
ton, as the major objective.
Prior to the merger, there were two
major systems of street railway and
bus transportation in Washington
the Capital Traction Co. and the
Washington Railway & Electric Co.
Becomes Holding Company.
Under the terms of the merger, the
Washington Railway & Electric Co.,
retired from the transportation field
becoming purely holding company
and was given so per cent of the stock
of the new company. The remaining
seven per cent of its new company
stock, sufficient to assure control, was
acquired through its ownership of a
small block of stock in the old Capital
Traction Co.
Therefore, as the situation stands
today, North American, through its
control of the Washington Railway &
Electric Co.. controls 81 per cent OF
the stock of the Capital Transit Co
Washington got its first street cars
in 1862, when the horse drawn line
to the navy yard was opened By the
washington g. Georgetown Rail-
road Co.
A dozen or more street car lines
and omnibus routes had come and
gone by 1895, when the Rock Greek
Co. acquired the Washington &
Georgetown Co. In preparation for
this important consolidation. the Rock
Creek line had changed its name to the
Capital Traction Co.. and thus was
born the best and probably the most
profitable street car line in Washing
tons transportation history.
Crosby Gains Control.
In 1895, two strong groups Of cap
italists-O. T. Crosby of New York
and a Baltimore syndicate-were
reaching out for Washington public
utilities. After a bitter battle, Crosby
in 1897, acquired the Potomac Electric
Power Co., and in 1899 the Washing
ton Traction and Electric Co. was
organized to secure controlling in.
terest in most of the traction com.
panies that were not already in the
Capital Traction Co. group.
The Washington Traction & Electric
Co., with Crosby at the helm, ther
controlled IL traction lines and two
power companies.
Within two years, however, this
holding company was In receivership
but since it had contributed in a
large measure to improving the service
so far as the public was concerned
no great opposition developed when
Congress was asked to authorize a
reorganization which by 1902 had
resulted in the incorporation of the
Washington Railway g. Electric Co.
giving Washington the two traction
companies which operated without
interruption until the merger Of 1888
The city got its first real bus line
in 1921, when william Elkins Reed
was given a permit to operate. He
founded the Washington Rapid Tran
sit Co. and was its president for some
time, although he sold his financial
interest in 1922 to devote his time to
improving notorious equipment. His
bus line first operated on Pennsyl-
vania avenue, but the service was
gradually extended until the present
system was established.
Leon Arnold followed Reed into the
bus field and their joint operations
began to cause the street railway
companies some concern.
Soon the Washington Railway and
Electric Co. inaugurated its own bus
service to meet the competition and
the Capital Traction Co. followed suit.
This was followed by the hectic
growth Of bus service and a gradual