Evening star., 1937-11-25
No. ~ and Final OF a Series.)
BY JAMES E. CHINN.


What's the future of Washington's s
mass transportation system?
Demands have been made for public
ownership and operation. There also
have been proposals that subways be
constructed for rapid transit service.
These plans. the proponents claim,
are the only salvation of the transit
system. They are the outgrowth OF
the recent action of the Public Utilities
Commission in increasing token fares
But why did the commission author
ize the fare increase? Simply because
it came to the conclusion the plea OF
the Capital Transit Co. for financial
help was justified.
First Of all, the company claimed
it was not making a fair return, and
its 100000 stockholders had been paid
q dividend of only 81 a share since
the merger in December, 1888. 1t told
the commission nearly $4,000. 900 had
been spent on new equipment and
track changes since the merger to
improve service. 1t complained, too,
Of an ever mounting tax bill and a
pay roll increase Of 1925, 900 a year.
Commission Attacked.
Some civic organizations and indi-
vidual car riders, however, seriously
questioned whether service had been
improved. A few contended the SER
vice now is worse than it was before
the consolidation. Others denounced
%bn oro rl,,o1 ovtorciov, NJ nna WON cor
operations, and took the commission
to task for not permitting sale Of
three tokens for IS cents instead of
six for so cents. Still other groups
demanded a new utilities commission
one that would act ''in the interest
of the public"
But thus far, there has been no
attack on the commission for serving
notice on the guardian Of the transit
company-the North American Co. OF
New York, one of the largest utility
holding companies in the country
that hereafter it should make funds
available for replacing existing obsolete
rolling stock.
The North American, it has been
pointed out, is not making any large
profits out of its control Of the transit
company. Nevertheless, it has been
drawing staggering sums from the
Potomac Electric Power Co., which 1t
also controls. From the power COM
pany, the North American has COL
lected about $10,000,000 since the
merger, and the commissions idea
now Is that 1t should come to the aid
Of its struggling brother, or, in other
words, return to Washington some OF
the money 1t has taken away.
Must Aid Transit Company.
Utility experts realize that unless
the North American aids the transit
company in the future, it probably will
be unable to procure funds to provide
additional new equipment. In order
to borrow money from other sources
the company would have to show
sunlcient earnings to satisfy an in
vestor he would receive interest regu-
larly and that he would get th<
principal back when the bonds fell
due. And it is doubtful, in view Of
the present situation, whether thu
company could inspire confidence in
those who have money to lend.
Although the transit company hal
been unable to pay but 81 in dividend.
per share to stockholders since the
merger, it has kept up interest on
bonds. For the last two years, however
the amount available for interest has
been covered by . narrow margin
As q result, the company's bonds have
dropped sharply In the market and
now are selling at from so 10 10 pei
cent Of face value. Its 500 par stock
which now Is paying no dividends. Is
selling around 50 . share, less than
10 per cent Of its par.
Another reason the company claims
It has been unable 10. make money 4