That the present rates of fare (except with respect to transfers) shall remain in force for a period of one year after the date of closing as hereinbefore defined, but the existing companies shall not be precluded from requesting a change in fare if this agreement is not approved by the present session of Congress.

Mr. GIBSON. Yes; I had taken that provision into consideration. Mr. HANNA. That provision was specifically put in there to cover the present situation, and I want to say, Colonel, for my own selfdefense that we were not taking that position except for the fact that we had publicly made known our intention to apply for an increased rate of fare six or eight months ago, before these negotiations ever began.

Mr. GIBSON. Of course, you must recognize that we are nearing the end of the session. We have very many matters of importance to the country as a whole pending, and it is entirely possible that through lack of time that we can not get this through this session, work as hard as we may.

Mr. HANNA. I understand that fully, and I also realize very fully that we have been operating with a very small return for five or six years or four or five years.

Mr. GIBSON. But you paid a dividend when your stocks were above par?

Mr. HANNA. We have paid dividends. We can not, of course, continue our present dividends-we do not want that done and we feel we are entitled to relief whether or not the merger goes through; if the merger goes through, that is taken care of.

Mr. GIBSON. The stockholders are getting along pretty well as it is, getting dividends and their stock is above par?

Mr. HANNA. I have talked to some of them that do not seem to feel that way about it.

Mr. GIBSON. Do you think that this agreement creates a monopoly of street-railway transportation?

Mr. HANNA. It depends entirely upon what you consider a monopoly. The language of the agreement asks for reasonable relief from competition.

Mr. GIBSON. What construction do you give that?

Mr. HANNA. The construction we give that is this, that public transportation by busses and by street cars within the District of Columbia, known as the metropolitan area, would be in the hands of this company, and that as long as this new company gave to the community the proper transportation that was required that no other company would be allowed to come into the District.

Mr. GIBSON. It does in fact create a monopoly in that way; there is no question about that.

Mr. HANNA. It creates a monopoly, there is no question about that, Colonel. It seems to me that the very word "merger" signifies monopoly. The reason we are asking to bring these two companies together is for the purpose of monopoly. But it is not an absolute monopoly, and there would be nothing in the law which this resolution would write on the statute books that would prohibit or prevent or hinder the Public Utilities Commission in the future from seeing to it that the citizens of the District of Columbia got proper transportation service.

Mr. GIBSON. If not this company, service by some other company? Mr. HANNA. If not this company, service by some other company; I do not think there is any question about that at all.

Mr. GIBSON. Yes, there is a question in my mind, if I were attorney for the companies and wanted to keep control in their hands I think I could do it under the merger agree

Mr. HANNA. I will amend my statement to this extent

Mr. GIBSON. That is just my personal opinion.

Mr. HANNA. And may have been stated as my personal opinion and my opinion of what was desired when the language was put into that agreement. As to what interpretation might be put on it by a court and by our own attorneys in the future I prefer not to express an opinion. But that was the intent of the language as written.

Mr. GIBSON. You were inquired of or made the statement in regard to the taxes paid by the bus company. I think you said the Washington Rapid Transit Co. did not pay any taxes.

Mr. HANNA. They do not pay the 4 per cent franchise tax. They pay, of course, their tax on any real estate which they may own, and they pay personal property taxes on their busses and other equipment, which we do not pay, and they, of course, pay the 2-cent gasoline tax. Mr. GIBSON. Well, of course, everybody pays that.

Mr. HANNA. Yes. They pay the same taxes as any individual would pay and, of course, the automobile license. There is no special license with respect to that tag.

Mr. GIBSON. That automobile license must be a great burden on them. How much is it?

Mr. HANNA. Not very much; and they have to buy some Maryland tags, of course.

Mr. GIBSON. Over in Maryland they have a law that is a real law. Mr. HANNA. Your statement just reminds me of a statement of Mr. Clayton. He made the statement that this bus company was not a merger, that it was a fraud. He used the words that it "was a fraud, that it was not a merger." If the committee pleases, that statement was one that was made without any foundation in fact whatsoever. This is a merger and an effective merger that is provided for these three companies. The fact that the bus company is to be acquired through purchase of its securities instead of through purchase of its property does not affect the situation at all. The usual method of operating buses by electric railway companies is through a subsidiary. The agreement is so worded that either method can be followed in this particular case, as the Public Utilities Commission in the future may decide. But the operation of these three transportation utilities will be just as effectively combined in this plan as they would in any other plan that could be devised. The two companies are actually merged into one company. The stock of the third company is bought.

There have also been charges made that no protection is given to these few minority stockholders of the bus company. My understanding is-Mr. Wilson can answer this question more directly-that he has not been able to locate those stockholders, and I am willing to state that the new company stands ready to pay or willing to pay each of the minority stockholders of the Washington Rapid Transit Co. the same price per share as Mr. Wilson will receive for his shares. The only criticism that is made about that price is that it is too high.

Mr. GIBSON. How much of the stock of the bus company does Mr. Wilson own?

Mr. HANNA. I believe Mr. Wilson owns 21,237 shares out of a total of 21,612.

Mr. GIBSON. He owns 98 per cent or something like that?

Mr. HANNA. Yes, sir.

Mr. GIBSON. I suppose what Mr. Clayton had in mind was that it was not a true merger in that the physical property of the Washington Rapid Transit Co. was not turned over, but that it was simply the representation by way of stock of the physical property. Is that what you meant, Mr. Clayton-I am asking that; I do not know.

Mr. CLAYTON. Yes; and that holding it that way, when apparently it could be merged, may change the 10-cent fare on that line, the independent operation of it, with additional charges, if necessary, between an independent bus company operated that way and a unified railway company. That is what can be done and will be done.

Mr. HANNA. So far as the 10-cent fare is concerned, that has nothing whatever to do with it, and Mr. Clayton knows as well as anybody else, because the Washington Railway & Electric Co. are operating 10-cent fare bus lines and we are operating bus lines at 25, 10, 5, and two for a quarter. So that the question as to what the rate of fare is has nothing whatever to do with it.

Mr. CLAYTON. Mr. Hanna, if you receive those fares to-day-the Washington Railway & Electric Co.-over 10-cent fare to be paiddo you propose to ask for an increase in them also when you apply for an increase?

Mr. HANNA. We will settle that at the time we make application. The commission can give consideration to it whether or not we apply for it.

Mr. GIBSON. Let me ask you it you intend-I think you covered that in an answer this morning-to ask an increase in fare for the Washington Railway & Electric Co. You said you did for the taxi company. Do you intend to do it for the other company, as to whether or not they will apply?

Mr. HANNA. Yes, I made the statement I did not know what they will do.

Mr. GIBSON. You do not know?

Mr. HANNA. I merely made the statement, I assume, without any particular reason for assuming that the commission if they granted an increase to us that they would grant it to them, as was done before.

With reference to this question of either acquiring the securities or the property of the company, I would like to refer again to the act under which we are working, an act to permit a merger of street railway corporations, which definitely 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 by lease of 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 that each or any of said companies.

All of these methods of merging are definitely provided for under that particular act.

Mr. COMBS, Jr. Mr. Hanna, have you used the buses for extension. of the service now beyond the end of the street car lines?

Mr. HANNA. Yes, sir; in many instances.

There

Mr. CoмBS, Jr. Is an additional fare charged now? Mr. HANNA. There is an additional fare in most instances. are one or two cases where the buses replaced the existing trolley lines that had been in operation for a good many years without a transfer charge, and on those no transfer is charged.

Mr. COMBS, Jr. Is an additional fare charged on the other lines? Mr. HANNA. A 2-cent transfer.

Mr. COMBS, Jr. There is no operation in that extended service bearing more than a 2-cent transfer?

Mr. HANNA. No, none of it as far as it operates in the District of Columbia.

Mr. COMBS, Jr. What will be the situation with reference to that same service after the merger is consummated?

Mr. HANNA. There will be no change whatever, unless the commission see fit to require it. I am reminded that we have one bus line that operates now without any transfer charge. That operates from Seventeenth and Pennsylvania Avenue SE. out to Good Hope through a very sparsely settled country, and it was put out knowing it was to be operated at a loss at the request of the citizens, and there is no transfer charge made on it.

Mr. COMBS, Jr. There is no such extended service in which a full additional fare is charged?

Mr. HANNA. There is in that particular case and no other.

Mr. CLAYTON. May I ask Mr. Hanna a question, with the permission of the committee?

Mr. HANNA. Yes.

Mr. CLAYTON. You read the act of Congress in regard to this merger. In your opinion is that act applied to street railway merger either by purchase or by merger?

Mr. HANNA. Yes.

Mr. CLAYTON. Why then bring into this merger, or whatever you call it, this bus line?

Mr. HANNA. Because there is no question, we feel-and the commission apparently felt and practically everybody except Mr. Clayton has felt-that the benefits of the merger would apply equally as well to merging the bus company as well as the other.

Mr. COMBS Jr. Do I understand, Mr. Clayton, that you are opposed to including the bus line in the merger?

Mr. CLAYTON. I do not oppose it. I asked why he was sticking so close to the law.

Mr. COMBS, Jr. What is your position about the matter, may I ask?

Mr. CLAYTON. I can state it in this way: Up to this time I do not know just what the public opinion is, except some of those people were opposed to including the bus line in the merger-I do not say how many, but up to a period of one year or two years ago there was an insistent and persistent fight against the inclusion of the independent bus line in any merger; and when the merger proposition was before the Senate committee it was opposed very vigorously there, and at that time it was excluded-the independent bus linethe idea being this, that they had received so much benefit from the competition of this independent bus line, which it succeeded in bringing into the District of Columbia, as they saw it leading the two. railroad companies to compete with them with buses, that it was

worth while, and there yet rests in the minds of people there is not an error, at least the law does not call for an additional bus line. Mr. COMBS, Jr. I am trying to get your personal judgment. Mr. CLAYTON. My personal judgment?

Mr. COMBS, Jr. Yes.

Mr. CLAYTON. I would not include the bus line; I would have and independent bus line to meet conditions that will arise in the future.

Mr. GIBSON. You would have competition.

Mr. CLAYTON. Absolutely.

Mr. COMBS, Jr. My understanding is the other day that you were objecting because there was not a real consolidation of the street railways with the bus line.

Mr. CLAYTON. I say so far as this is concerned, for it pretends to be a consolidation when it is not.

Mr. COMBS, Jr. If it were a complete consolidation, then you would have no objection to it, I assume, except from the angle of competition.

Mr. CLAYTON. Yes, I am speaking independently for myself. When I say "personally," I prefer to have competition of an independent bus line against the street railway combination.

Mr. GIBSON. You said you wanted to ask a question, Mr. Hanna. Mr. HANNA. I wanted to be sure whether or not that is the attitude of the Federation of Citizens' Associations with respect to this bus company.

Mr. CLAYTON. It was their attitude-I am talking about the attitude expressed by the resolutions-about the past but not their present attitude.

Mr. HANNA. The Federation of Citizens' Associations with respect to this bus merger?

Mr. CLAYTON. Our attitude before the commission was this: We were sent down without instructions before the Public Utilities Commission. Since that time I believe that the federation is on record including the bus line.

Mr. HANNA. Thank you.

Mr. GIBSON. Let us see if we can straighten out about the citizens' associations and the federation. Mr. Clayton, what do you mean by the Federation of Citizens' Associations?

Mr. CLAYTON. Why, that is an organization made up of two delegates from each of the 50 associations.

Mr. GIBSON. A sort of representative body?

Mr. CLAYTON. Yes; or clearing house for the citizens' associations. Mr. GIBSON. Certain citizens' associations have gone on record, I believe, in regard to this merger?

Mr. CLAYTON. Yes.

Mr. GIBSON. How many?

Mr. CLAYTON. That is, for independent bus lines?

Mr. GIBSON. No, on the merger for or against.

Mr. CLAYTON. Oh, I suppose every citizens' association in the District has acted.

Mr. GIBSON. Mr. Roberts, do you know?

Mr. ROBERTS. Yes; 51 in favor of the action of the public utilities committee of the federation and three in favor of the merger as