MERGER OF STREET-RAILWAY CORPORATIONS

WEDNESDAY, JANUARY 27, 1932

HOUSE OF REPRESENTATIVES,

COMMITTEE ON THE DISTRICT OF COLUMBIA,

Washington, D. C.

The subcommittee on public utilities (Committee on the District of Columbia) this evening met at 8.30 o'clock p. m., Hon. Loring M. Black, jr., presiding.

Present: Mr. McLeod and Mr. Whitley.

Mr. BLACK. The subcommittee will come to order.

The reporter will at this point of the hearing insert the resolution, House Joint Resolution 154, Seventy-second Congress, first session.

The resolution is as follows:

[H. J. Res. 154, Seventy-second Congress, first session]

JOINT RESOLUTION_To_authorize the merger of street-railway corporations operating in the District of Columbia, and for other purposes

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That pursuant to the act entitled "An act to permit the merger of street-railway corporations operating in the District of Columbia, and for other purposes," approved March 4, 1925, a form of agreement to carry this into effect and providing for the formation of a new corporation to be known as the Capital Transit Company to acquire properties and/or stocks or securities, and to succeed to the powers and obligations of the Capital Traction Company and to succeed to the powers and obligations of the Washington Railway and Electric Company directly connected with or relating to the operation of electric railways, motor busses, and/or other forms of public transportation, having been approved by the Public Utilities Commission of the District of Columbia on the 7th of December, 1931, as follows:

UNIFICATION AGREEMENT

Whereas the act entitled "An act to permit the merger of street-railway corporations operating in the District of Columbia, and for other purposes," approved March 4, 1925, provides "that any or all of the street-railway companies operating in the District of Columbia be, and they are hereby, authorized and empowered to merge or consolidate, either by purchase or lease by one company of the properties and/or stocks or securities of any of the others, or by the formation of a new corporation to acquire the properties and/or stocks or securities and to succeed to the powers and obligations of each or any of said companies under such terms and condition as may be agreed upon by vote of a majority in amount of the stock of the respective corporation, and as may be approved by the Public Utilities Commission of the District of Columbia: Provided, That no merger of said companies shall be finally consummated until the same is approved by a joint resolution of Congress. Such new corporation shall be incorporated under the provisions of Subchapter IV, Chapter XVIII of the Code of Law of the District of Columbia as far as applicable, with issues of stock at a stated par value and/or of no par value, as may be approved by the Public Utilities Commission"; and

1

Whereas the Washington Railway and Electric Company (hereinafter referred to as the "Washington Company ") and the Capital Traction Company (hereinafter referred to as the "Capital Company "), street-railway companies now operating in the District of Columbia, are organized in accordance with special acts of the Congress of the United States for the purpose of carrying on street railway and other business; and

Whereas it is deemed advisable, for the purpose of greater efficiency and economy of management and for the benefit and advantage of the public and of the stockholders of said companies, that their transit properties used in the business of street railway, motor bus, and/or other forms of public transportation within the District of Columbia or between the District of Columbia and adjacent States, and such other property and assets, real and personal, tangible and intangible, as may be described in this agreement shall be placed under unified ownership and operation; and:

Whereas the premises, covenants, agreements, grants, terms, and conditions herein have been approved by the Public Utilities Commission of the District of Columbia :

Now, therefore, if and when the said premises, covenants, grants, terms, and conditions herein contained are agreed upon by a vote of a majority in amount of the stock of the respective corporations, their respective properties as hereinafter described shall be transferred to and vested in the New Company and the mode of carrying the same into effect shall be as follows:

First. The name of the New. Company shall be Capital Transit Company (hereinafter referred to as the "New Company”).

Second. The New Company shall be incorporated under the provisions of Subchapter IV of Chapter XVIII of the Code of Law of the District of Columbia and pursuant to an act of Congress entitled "An act to permit the merger of street-railway corporations operating in the District of Columbia, and for other purposes," approved March 4, 1925, with power to acquire, construct, own, and operate directly or through subsidiaries transit properties within the District of Columbia and in adjacent States, including the power to acquire, own, and operate the properties of whatsoever description to be conveyed to the New Company in accordance with this agreement, and to acquire and own the stock and/or bonds of said companies and of any other company or companies engaged in the transportation of passengers in the District of Columbia and adjacent States with the power to mortgage its property, rights, and franchises, and to conduct such other activities as may be useful or necessary in connection with or incident to the foregoing purposes, including the power to buy, sell, hold, own, and convey real estate within and without the District of Columbia. Said New Company when incorporated shall become and remain subject in all respects to regulation by the Public Utilities Commission of the District of Columbia or its successors to the extent of the jurisdiction vested in it or them by law over corporations engaged in the transportation of passengers within the District of Columbia. Nothing either hereinbefore or hereinafter in this agreement shall be construed as changing or limiting the provisions of any law with respect to corporations engaged in the transportation of passengers.

Third. The board of directors of the New Company shall consist of fifteen persons. Of the fifteen original directors, seven shall be nominated by the Washington Company, seven by the Capital Company, and one, to hold office for two years, shall be agreed upon by the fourteen nominated as above. Of the directors so to be initially nominated by the Capital Company, five shall hold office for three years and two shall hold office for two years. Of the directors so to be initially nominated by the Washington Company, two shall hold office for two years and five shall hold office for one year.

The directors shall be stockholders and a majority bona fide residents of the District of Columbia, and shall, except as hereinbefore provided, be elected annually by the stockholders at such time and place as shall be determined by the by-laws of the company. The officers of the new company shall be selected by the board of directors.

Fourth. The New Company shall have such rules, regulations, and by-laws as the directors shall adopt not contrary to its charter or to the laws in force in the District of Columbia, The duties and powers of the directors and the duties and powers of the officers of the company shall be such as are set forth in the by-laws.

Fifth. The authorized number and par value of the shares of stock of the New Company, the number of shares of stock to be issued originally for the