permanent improvements, renewals, or repairs to public bridges over which the street-car lines operate, are hereby repealed (acts or parts of acts repealed to be cited here), such repeal to be effective on the date the unification herein authorized becomes operative: Provided, That the Capital Transit Co. herein provided for shall bear the entire cost of paving repairs or replacements incident to track repairs, replacements, or changes made at a time when the street or bridge is not being paved, and shall bear one-fourth the cost of other paving, repaving, or maintenance of paving between its tracks and for 2 feet outside the outer rails, and shall bear the excess cost of construction and maintenance of public bridges due to the existence or installation of its tracks on such bridges: Provided, That nothing herein contained shall relieve said Capital Transit Co. from liability for street paving as owner of real estate apart from rights of way occupied by its tracks, as provided by section 8 of the act of Congress entitled 'An act making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June 30, 1917, and for other purposes,' approved September 1, 1916, as amended to date." This paragraph is the only provision in the entire bill that will in any way affect the revenues of the District of Columbia. It is requested that you submit this proposed legislation to the Budget Bureau for indication as to whether it would or would not be in conflict with the financial program of the President. This commission is of the unanimous opinion, in which the people's counsel joins, that a merger of the street-car lines of the District of Columbia is highly desirable, both in the interests of better service to the public, and as a means of providing lower street-car fares for the future, and also for the ultimate development of Washington. The provision affecting certain charges upon the street-car companies is a vital part of the agreement as it now stands, and the elimination of this relief might bring about a complete failure of the consummation of the present unification plans, thus delaying further the long hoped for consolidation of the street-railway companies of the city. Very truly yours, JNO. W. CHILDRESS, Chairman. Gen. H. M. LORD, COMMISSIONERS OF THE DISTRICT OF COLUMBIA, Director of the Bureau of the Budget, Washington, D. C. SIR: The Commissioners of the District of Columbia transmit herewith a letter addressed to them by the chairman of the Public Utilities Commission of the District of Columbia, dated April 2, 1928, in which that commission informs the commissioners that under the provisions of the act approved March 4, 1925, entitled "An act to permit the merger of street-railway corporations operating in the District of Columbia, and for other purposes," it intends to submit to Congress proposed legislation with reference to a merger of the street-railway corporations operating in the District of Columbia. Included in such legislation is a paragraph reading as follows: "That all provisions of law making it incumbent upon any street-railway company to bear the expense of policemen at street-railway crossings and intersections, the laying of new pavement, the making of permanent improvements, renewals, or repairs to the pavement of streets and public bridges, and the permanent improvements, renewals, or repairs to public bridges over which the street-car lines operate, are hereby repealed (acts or parts of acts to be repealed to be cited here), such repeal to be effective on the date the unification herein authorized becomes operative: Provided, That the Capital Transit Co. herein provided for shall bear the entire cost of paving repairs or replacements incident to track repairs, replacements, or changes made at a time when the street or bridge is not being paved, and shall bear one-fourth the cost of other paving, repaving, or maintenance of paving between its tracks and for 2 feet outside the outer rails, and shall bear the excess cost of construction and maintenance of public bridges due to the existence or installation of its tracks on such bridges: Provided, That nothing herein contained shall relieve said Capital Transit Co. from liability for street paving as owner of real estate apart from rights of way occupied by its tracks, as provided by section 8 of the act of Congress entitled 'An act making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June 30, 1917, and for other purposes,' approved September 1, 1916, as amended to date." This paragraph, as stated in the letter of the Public Utilities Commission, is the only provision in the entire legislative proposal that will in any way affect the revenues of the District of Columbia, and is the only part of the measure that directly involves the official consideration and judgment of the commissioners. The commissioners favor the proposal to relieve the new company to be created under the merger agreement from the salary expense of policemen at street-railway crossings. They also favor relieving the new company from bearing a share of the cost of renewals or repairs to public bridges crossed by its lines, including new construction, to the extent indicated in the quoted paragraph of the proposed legislation. The commissioners do not at this time desire to express an opinion as to whether the new company should be relieved of any part of the cost of new paving and maintenance of paving as established by existing law. The question was considered before the Public Utilities Commission whether in view of the provisions of the merger act of March 4, 1925, it became necessary to submit this matter to the Budget Bureau. The decision was reached that so much of the proposed legislation as contemplated the transfer of certain expenses from the new company to the District of Columbia was properly a subject for consideration by the Budget Bureau pursuant to the provisions of circular No. 49 of that bureau. The Commissioners of the District of Columbia are particularly anxious to cooperate in every way possible to have the merger bill placed before Congress at the very earliest date, and because of the lateness of the present session they would appreciate prompt action by your bureau in indicating to them whether the provisions of the proposed legislative paragraph hereinbefore quoted are or are not in conflict with the financial program of the President. Yours respectfully, BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA, By PROCTOR L. DOUGHERTY, President. BUREAU OF THE BUDGET, DEAR MR. DOUGHERTY: I have your letter of April 9, 1928, quoting the following paragraph from a legislative proposal which the Public Utilities Commission of the District of Columbia intends to submit to Congress under the provisions of the act of March 4, 1925, entitled, “An act to permit the merger of street railway corporations operating in the District of Columbia, and for other purposes. "That all provisions of law making it incumbent upon any street railway company to bear the expense of policemen at street railway crossings and intersections, the laying of new pavement, the making of permanent improvements, renewals, or repairs to the pavement of streets and public bridges, and the permanent improvements, renewals, or repairs to public bridges over which the street-car lines operate, are hereby repealed (acts or parts of acts to be repealed to be cited here), such repeal to be effective on the date the unification herein authorized becomes operative: Provided, That the Capital Transit Co. herein provided for shall bear the entire cost of paving repairs or replacements incident to track repairs, replacements, or charges made at a time when the street or bridge is not being paved, and shall bear one-fourth the cost of other paving, repaving, or maintenance of paving between its tracks and for 2 feet outside the outer rails, and shall bear the excess cost of construction and maintenance of public bridges due to the existence or installation of its tracks on such bridges: Provided, That nothing herein contained shall relieve said Capital Transit Co. from liability for street paving as owner of real estate apart from rights of way occupied by its tracks, as provided by section 8 of the act of Congress entitled, 'An act making appropriations to provide for the expense of the government of the District of Columbia for the fiscal year ending June 30, 1917, and for other purposes,' approved September 1, 1916, as amended to date." You indicate that the commissioners desire to report favorably to Congress upon the proposal to relieve the new company to be created under the merger agreement from the salary expense of policemen at street-railway crossings, and also upon the proposal to relieve the new company from bearing a share of the cost of renewals as repairs to public bridges crossed by its lines, including new construction, to the extent indicated in the above-quoted paragraph, but do not desire to express to Congress an opinion as to whether the new company should be relieved of any part of the cost of new paving and maintenance of paving as established by existing law. You are advised that such a report to Congress would not be in conflict with the financial program of the President. Very truly yours, Hon. PROCTOR L. DOUGHERTY, President Board of Commissioners, H. M. LORD, Director. District of Columbia, Washington, D. C. UNIFICATION AGREEMENT BETWEEN WASHINGTON RAILWAY & ELECTRIC CO., THE CAPITAL TRACTION Co., AND WASHINGTON RAPID TRANSIT Co. Whereas, a certain Joint Agreement of Unification, dated as of the 10th day of February, 1928, was entered into by and between the Washington Railway and Electric Company (hereinafter referred to as "Washington Company "), The Capital Traction Company (hereinafter referred to as Capital Company "), acting by their respective Boards of Directors and officers, and Harley P. Wilson, owner of 21,237 shares of the stock of the Washington Rapid Transit Company (hereinafter referred to as the "Bus Company "), and 66 Whereas, the Public Utilities Commission of the District of Columbia thereafter required certain modifications as necessary to accomplish the purposes thereof; and 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 conditions 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 Whereas, the Washington Company and the Capital Company 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 the Bus Company is organized under the laws of the State of Delaware for the purpose of carrying on bus and other business; and Whereas, the authorized capital stock of the Capital Company consists of 120,000 shares of the par value of $100.00 per share, all of which stock is now issued and outstanding; and, Whereas, the authorized capital stock of the Washington Company consists of 85,000 shares of preferred stock of the par value of $100.00 per share and 65,000 shares of common stock of the par value of $100.00 per share, all of which authorized shares of preferred and common stock are now issued and outstanding; and, Whereas, the authorized capital stock of the Bus Company, consists of 50,000 shares of capital stock of the par value of $10.00 per share, of which 21,612 shares are now issued and outstanding; and Whereas, the respective Boards of Directors of the said corporations deem it 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; Now, Therefore, in consideration of the premises, covenants, agreements and grants herein contained, it is as of the 7th day of April, 1928, hereby agreed by and between the parties hereto, who are the same as the parties to the aforesaid agreement of February 10, 1928, that their respective properties as hereinafter described shall be transferred to and vest in a new company, and the parties hereto by these presents agree to and prescribe the following terms and conditions of said transfer, and the mode of carrying the same into effect: 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 Sub-chapter 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 stocks 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: all subject to the approval of the Public Utilities Commission of the District of Columbia. 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 citizens 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 initially authorized share capital of the New Company shall be 300,000 shares of preferred stock of the par value of $100.00 per share, which, subject to approval by the Public Utilities Commission of the District of Columbia, may be issued in Series from time to time as hereinafter provided, and 300.000 shares of common stock of the par value of $100.00 per share. Sixth Of the authorized stock, there shall be issued originally for the purpose of the unification and in payment for the properties of the Capital Company and the Washington Company to be acquired hereunder: 120,000 shares of 7% preferred stock, Series A. 193.420 shares of common stock plus that number of shares at par equaling the total net current assets including materials and supplies received by the New Company. Seventh: The description of the classes of stock and the designations, rights, preferences and voting powers or restrictions or qualifications of each of said classes of stock shall be as follows: Each share of stock shall be issued as fully paid and non-assessable. Each share of Series A preferred stock shall entitle the holder thereof to receive, and the New Company shall be obligated to pay when declared by the Board of Directors out of the surplus or net profits of the New Company, cash dividends at the rate of 7 per cent per annum in perference over any dividend on the common stock, such dividends to be payable quarterly, on dates to be fixed by the Board of Directors and such dividends shall be cumulative from and after the beginning of the quarter yearly period during which such stock is issued. The common shares shall be subject to the preferential rights of the preferred shares as above specified. No dividends on the common stock shall be paid in any calendar year unless all cumulative dividends on preferred stock accrued prior to such year shall have been paid or declared and set aside for payment in such year, and only after declaration and setting aside for payment in such year of the full dividends on the preferred stock for such year. After full dividends on Series A preferred stock shall have been paid or declared and set aside for payment in any such year, the holders of the common stock shall be entitled to receive all amounts that may be distributed in dividends in such year up to and including 7 per cent upon the amount of all common stock then outstanding and after such 7 per cent dividends of any character on such common stock shall have been paid or declared and set aside for payment in any year, the Series A preferred stock shall be entitled per share to dividends pro rata with the common stock out of all dividends paid in such year. The Series A preferred stock shall be subject to redemption and may be redeemed and retired in whole or in part on any dividend date after five years from the date of original issue, but not before, and for five years thereafter at $120.00 per share, plus accrued and unpaid dividends thereon, and thereafter at $120.00 per share less 25c. per share for each elapsed period of one calendar year or fraction thereof for forty years thereafter, and thereafter at $110.00 per share, plus in each case accrued and unpaid dividends to the date fixed for redemption. If less than the entire amount of Series A preferred stock then outstanding shall be redeemed, then redemption shall be made ratably among the holders of such stock in proportion to such individual holdings with suitable provision for fractional shares. The time, place and manner of such redemption shall be in the discretion of the Board of Directors of the New Company; provided, however, that redemption shall be made only on at least sixty days' prior notice to the holders of the stock to be redeemed, which notice shall be given by advertisements in at least two daily newspapers of general circulation published in the District of Columbia; provided that the Board of Directors may give such other notice by mail or otherwise as they may determine. From and after the date fixed in such advertised notice as the date of redemption (unless default shall be made by the New Company in providing moneys for the payment of the redemption price pursuant to such notice) all dividends on the Series A preferred stock thereby called for redemption shall cease to accrue, and all rights of holders thereof as stockholders of the New Company, except the right to receive the redemption price (but without dividends or interest after date set for redemption) upon surrender of the certificates of stock by such holders shall cease and determine. In the event of an involuntary liquidation or dissolution of the Company or of an involuntary sale of all or substantially all of the assets of the Company, or upon any involuntary distribution of its assets, the holders of preferred stock shall be entitled to receive out of the assets of the Company, $100.00 per share, plus an amount equal to all arrears of accumulated dividends thereon to the date of such distribution, and no more, before any payment shall be made or any assets distributed to the holders of common stock. In the event of voluntary liquidation, dissolution or winding up of the Company, or upon any voluntary distribution of its assets, the holders of preferred stock shall be entitled to receive out of the assets of the Company, the then redemption price of such preferred stock, plus an amount equal to all arrears of accumulated dividends thereon to the date of such distribution, and no more, before any amount shall be paid out of said assets to the holders of common stock. If any payment shall have been made in full to the holders of the preferred stock, as provided in either of the two preceding paragraphs, the remaining assets of the Company, if any, shall be distributed ratably, share for share, among the holders of the common stock. If, however, upon such liquidation, dissolution, winding up, or distribution of the assets of the Company, whether voluntary or involuntary, the assets thus |