Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-09
BY I. A. FLEMING.


Directors of the Capital Traction Co.
VIII probably meet within few days
for the consideration Of the July divi-
dend rate and other matters of vital
Importance.
For some time the annual distribu-
ton has been upon the basis of per
cent per annlirn, a rate that the courts
permit utilities to earn upon their phys
ical valuation. It Is admitted that the
company has not been earning its divi-
dend, but the directors have pursued
a liberal policy for the advantage of the
shareholders, even going so far as to
anticipate the passage of the merger
measure through Congress and per-
haps higher fares, to which they be-
lieve they are entitled.
Rate Petition.
In days of yore this corporation was
one of the big money makers and is
one of the leading public utilities of
the city today. That was prior to the
entry of the automobile into COMPETE
ton with the passenger carriers to the
great reduction Of the income OF the
latter
The people of Washington seemed to
favor merger Of the street car sys-
TENS. the House passed the measure,
but 1t died with the Seventy-first Con-
gress.
Capital Traction officials, In conjunc-
ton with those of the Washington Rail-
way & Electric Co., not long ago filed
petition with the Utilities Commits
sion asking for higher rates. but with
drew 1t on request, pending action on
merger.
1t is within the probabilities that re-
newal of this request will be asked in
the near future. The court has sus-
tanned the physical valuation of the
company's property around 26,000,000,
while the Utility Commissions experts
have placed $l80oo,o00 as the correct
valuation.
The company has not asked xates
based on per cent OF its own valua-
ton, but would be satisfied If given
that percentage on the lesser basis,
which 1t feels is nothing more than
right.
In the prosperous days before the
Utilities Commission and the auto
competition Capital Traction shares
were quoted much higher than their
present value. 1t is recalled that as
high as $152 share was paid by some
officials for their holdings
Some of this stock is still held by
also in strong boxes OF the heirs Of
many Of the city's leading citizens.
May Cut Dividend.
No one can tell Just what the d.
rectors will do regarding the dividend
for the second quarter of the year and
there is equally uncertainty regarding
action Of the Utility Commission when
presented with plea for higher fares.
Changes in the personnel Of the COM
mission make their position in the
matter more uncertain and in the end
an appeal to the courts may be taken.
A million dollars remains in the treas
ury of the company, cash surplus. aside
from surplus in .trackage and equip
ment. and it is just possible that the
board may decide it best to continue
on the 7 per cent basis, in the interest
of many shareholders who may suffer
from a cut in their incomes.
One and perhaps two per cent have
been estimated by brokers as the prob
able extent Of the cut in the event Of
the board finally deciding to take this
drastic action.
May Win Out.
Granting of the petition for higher
rates of fare would be favorable for
Traction shareholders and some day
some day when the automobile pas
senger traffic is barred from downtown
may win back its lost
On the local market Traction shares
have declined from their one-time high
to 9212 the low for this century, and
closed on Friday at 94l4.
1t is recall d that at one time, not
so many years ago, the vehicle for the
of all local utilities was at
hand and killed off by Senator La
Toilette
A serious decline in Traction shares
was sustained in the years when the