Evening star., 1934-09-10

The proposal, onered after many
months of private negotiations, must
meet with the approval of the Public
Utilities Commission before it can be
placed in effect. Under the street car
merger agreement approved by Con-
greSS. the Capital Transit Co. was
authorized to buy stock of the
bus company "at the fair market
value" and on terms as may be ap-
proved by the utilities commission.
The bus company was bought by the
North American Co. of New York in
1925 for $515.966. 1t lost money
steadily from 1925 to 1894. The cor
porate deficits by years, according to
the records of the Public Utilities
Commission. are: 1926, $88 900: 1927,
S89, 900; 1928. $4,000; 1929, $1,000;
1890, $4,000; 1881, $4,000; 1892,
$63. 500; 1898. $45. 500. This makes a
total deficit for these years Of $402, 100.
Stock IN Wilson's Name.
The stock of the company now
stands in the name of Harley P. Will
son. He is a director in the North
American Co.
Commissioner Riley E. Elgen said
today a public hearing would be
called to inquire into the reasonable
ness of the purchase. He would not
comment on the proposed purchase in
advance of the hearing. Neither
would Commissioner Richmond B.
Keech.
Peoples Counsel William A. Roberts,
asked for comment, said, That's lot
of money to pay for old busses."
The Washington Railway & Elec-
trio Co. and the old Capital Traction
Co. merged last December l, under
authority of the agreement approved
by Congress. The North American
Co. then controlled the w. r. g. E.
and, through it, the Potomac Electric
Power Co., and also held small per-
centage of the stock Of the Capital
Traction Co.
Mr.. Hanna informed the commits
sion today the plan had been ap-
proved by the Board of Directors of
the Capital Transit Co. He said the
company had offered to buy the
minority stock holdings in the bus
company at the same figure Of $24
a share as offered owners of the
ma jority stock.
Hanna's statement to the commits
sion said:
The agreement provides for the
purchase of 1887 shares Of a total
Of 2l,6l2 shares issued and outStand-
ing for the sum of $4,000 and for
the purchase by Capital Transit Co.
of the outstanding notes Of the WASH
ington Rapid Transit Co. amounting
to 1927 .253.87. The terms and condi-
tions Of the agreement were arrived
at as the result of extensive negotia-
tions covering considerable period,
and before approving this agreement
the directors of Capital Transit Co.
gave the matter very careful consid-
Grafton and engaged the services of
Prof. Albert s. Richey Of the Wor-
cester Polytechnic Institute, a compe-
tent and experienced transportation
engineer, to make an appraisal Of the
value Of the property. Mr.. Richey's
report has been received and thor
oughly justifies the price proposed to
be paid.
$24.30 Per Share.
THE directors at the time of the
approval of the purchase contract also
authorized the officers of the company
to purchase any or all of the remain
ing outstanding stock of the (bus)
company, amounting to 375 shares, at
price provided in the contract,
namely, $2430 per share"
The commission was asked to give
its approval to the contract Of pur-
chase as soon as possible, "in order
that the benefits to the public and to
the company from unification be not
unduly delayed"
In statement released to the press,
President Hanna stated that the
$843 900 purchase price offer was ap-
proximately 100000 less than the to-
tai of LAG, 900 named in the 1928
unification agreement which was pro-
posed by the then two street car COM
panies and Mr.. Wilson as spokesman
for the bus company. That proposal
failed of approval.
THE final step in complete unifca-
ton (of street car and bus systems)
will greatly simplify the problem Of
rerouting the various bus and rail
lines of the Capital Transit Co., a
most important matter which is now
before the public and the commits
sion." Mr.. Hanna said.
1T will, by co-ordinating all of the
available facilities, enable the COM
pany to make substantial operating
economies, furnish better service now,
and plan for the future transportation
needs Of the city in a more compre-
hensive and logical plan"
68 Busses in Service.
The Washington Rapid Transit Co.
now has some 68 busseS in service
Nearly all of these were purchased
some years ago.
For the first seven months of this
year the company shows a net cor
porate income Of $1,000. Commission
experts say this was possible because
Of $4,000 decrease in money being
set aside for depreciation, that is re-
tirement of old buses when their
service life Is ended. For the first
seven months of 1893 there was a
deficit Of $33 900 in corporate income.
Clayton AssaiIs Price.
William NICK. Clayton, chairman
Of the Public Utilities Committee of the
Federation of Citizens Associations,
said of the price proposed for the
Washington Rapid Transit.
why that price is out of the ques-
ton. The commission would not
stultify itself by condoning any such
figure
What does this bus company have
to sell? Not a franchise, because they
don't own any. Is it good will?
Hardly, because the comany is in the
red.
Besides, all that this offer really
amounts to is the North American Co.
dealing with itself. The North Ameri-
can Co. is the whole Of this transac-
ton. The street car company wants
to take the bus company in at a
large figure, include this figure in its
investment, and then squawk because
1t is not getting fair return on it,"
Fvnarf Il CroSs Exorn;roI