Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-07-12
FARE BOOSTPLAN
STUDIED BY BOARD
Capital Traction Representa-
tive Explains Stand to Busl.
ness Mems Group.

Taking I'D study of ths need and nus
tie of the increase in car fare BENG
sought by the Capital Traction Co. a
subcommittee Of the public utilities
committee Of the Beard of Trade ysSter-
osv afternoon listened to an eSp'afia-
ton Of reasons for higher fare by j. E.
Heberly assistant to President John II,
Hanna Of the traction company. and at
the close of the session decided to defer
recommendations ON the matter until
SeDtenber when public hearings will
be held before the Public Utilities Com.
mission.
Ea}oh 3. Fleharty. peoples counsel,
who had accepted an invitation to con-
fer with the trade body committee was
not present and members OF the COM
ulittee expressed regret that they were
not given his advice on the question,
Holds Revenue Inadequate.
A high light OF Heberly's statement
uas that the Capital Traction Co. IN
making the desired payment of a per
cent dividend TO its stockholders ourlle
the past year had found II necessary 10.
draw on its surplus, due 10 inSufnc1ent
revenue TO meet the dividends. TINS
he gave as the basis of the plea Tor
hisher fare. which he said vas neces-
sarv to maintain the present good creoit
Of the company.
In answer to questions, Heberlv stated
that the traction company at the close
of 1927 had a surplus OF about Sl-2oo,-
600. It was brought out that the COM
many was withdrawing about $l33,Oou
annually to make up dividend payments
These facts led A. K. Shipe, chair
man of the subcommittee. who presided.
10 question the propriety of the granting
az q higher fare at this time, before
Congress has acted on the proposed
merger Of the transportation HneS OF
the District, which development, unae,
the agreement signed by the Capital
traction Co weJld set aside any in
crease which might be granted IN the
meantime.
Suggests Surplus Is Sufficient.
The Capital Traction Co.. Shipe sug-
rested TO the committee. could continue
TO nav per cent dividend to Its
stockholders for about 10 years on the
present rate" OF fare by Withdrawing
needed sums yearly from its surplus
of 81 100000 before the surplus would
be denleted. For this reason, he added.
q
OF a fare boost now
Members of the committee, however,
did not take issue with the contention
Of the traction official that the return
Of the company was and had been for
several weary below q figure to which
Il was entitled.
Heberly pointed out that the sur
plus was created due to the policy OF
the company in more prosperous years
following the war Of limiting dividends
to per cent when It might have made
larger ones, rather than add 20 Its sur
pluS. In this connection 6hipe de-
IDENTIFY had been fair to the public IN
creating a surplus against possible fu-
ture needs.
Cites Passenger Decrease.
Heberly explained that the company
was seeking either an scent cash fare
or q Io-cent fare with provision for car
tokens at four for 80 cents. This. he
said. is far less than what . company
is eztitled to under the valuation. as
fixed by the court. ana that 1t would
not be entirely Sufficient, to provide
Z per cent dividend to the stockhold-
ers He pointed out that while operat-
ing costs of the company had decreased
only slightly In the past several years,
the number Of revenue passengers car
ried had decreased heavily.
He reminded the committee that the |
company was owned by about 2,200 |
stockholders and that the majority of |
them held q comparatively small num- |
Der OF shares, the largest number being |
about 4.500 shares.
Heberly declared that the petition for |
higher fare was in no wise gesture |
- - 4 1911
merger plan. pointing out that should |
the merger be effected. the fare would |
90 back TO the present rate, under the |
agreement approved by the majority Of
the stockholders Of the company. and
would remain there fer at least year.
He said o. higher fare was essential |
for relief to the company at this time. |
Kenneth B. Armstrong was delegated
to represent the committee at the Sep
tember hearings on the higher fare
before the Public Utilities Commission.