Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-05
Negotiations for Deal Go On
as Interested Persons
Speculate on Price.
OFFER AND D. c. STAND
ARE NOT REVEALED
Minimum Figure fol-. Rental Held
to Be 81 ,000, 900 Plus Cost
Of Merging Operations.

While negotiations for q lease Of the
street car systems to anonymous out
side interests continued quietly today,
attention Of those interested In WASH
ington's transportation problems turned
to the question of how much money 1t
would take to swing the deal.
Assuming that the companies are in
a mood to bargain, the cash considera-
ton would not necessarily be very high,
but 1t is regarded as unlikely that they
extremely attractive proposition in view
of the immediate prospect for better
corporate earnings.
Tit two companies In 1880 reported
operating incomes Of $1.679, 527.16, and
they are doing somewhat better this
year as q joint result Of the l0-cent
adult fare and rigid. operating econo-
mics. The 1880 figure may be regarded
as the minimum from which negotia-
tons would have to start. The prospec-
tive lessee would have to agree to pay
more than that, otherwise there would
be no profit TO the companies IN enter
ing into the lease.
Would Need Capital Outlay.
II joint operation Is, as reported, the
object, then the lessee would have TO
put out some capital for track changes,
purchase Of new cars and the like.
The estimate on the cost Of track
changes necessary for merged opera
ton, submitted by j. Rowland Bib
bins. engineer, at the Inflated merger
hearing before the Public Utilities Com
mission some years ago. was 1000, 600.
This probably would be decreased some
what now on account Of lowered unit
prices for steel and copper.
~
Of merged operations the companies
would be able to save $S4l 900 q year
Traction men generally have regarded
this estimate Is somewhat too euthu-
siastic, and 1t Is very unlikely that q
lessee undertaking Joint operation could
save anywhere near that amount in
operating expenses. The Bibbins esti-
mate called for scrapping Of shop and
other duplicate equipment, and the
to scrap any Of their property.
Gain Forecast Next Year.
At any rate. the outlay to the lessee
would be his original expense OF 81
600 900 plus the profit the COMPANIES
would exact from him monthly On the
lease. II he would be able to make
substantial savings through joint oper-
alton, the amount Of cash required to
start out in addition TO the expense of
the track changes, would be working
capital, or enough to run the proper
ties until the money started to come
in. plus some amount for . margin
Of safety.
But the companies are looking for
ward TO big business next year, car
ring the throngs expected to visit the
Capital for the George Washington BIZ
centennial celebration. After that the
progress OF the Federal building pro-
gram, with its many Offices concen-
trated In q small area away from park
ing spaces and the increasing strin-
gency of the parking regulations are
expected to turn many thousands OF
automobile drivers back into street
car riders.
The companies seem to have their
10-cent fare well entrenched, and are
making q vigorous court attack on the
Scent fare for school children on con-
stitutional grounds.
Taxi Fares Expected 10 Rise.
The main adverse factor 1T the mo-
ment Is the taxicab competition, with
taxi rates low. But the low taxi rates
are not expected to outlive the low
gasoline prices. and II Is not thought
that their inroads into the car fares
VIII be permanent.
So the car companies, according to
some observers, seem to be in good po-
sition to sit tight and unless the lease
guarantees their stockholders q high
dividend. there appears little reason for
them to accept.
The negotiations are still being kept
from the Public Utilities Commission
Harleigh H. Hartman. the only mem
Der in town. said today that all he
knew about them Is what he has read
in the papers.