Evening star., 1937-12-26

December 1888, 1t had SILVER spoon"
in its mouth-a surplus reserve of about
$6.0OO,OOO. That's gone now, and in ad-
dition the company last year borrowed
sl,5O7,000 from Washington banks to pur-
chase II buses and IS cars
Estimates furnished by the Public Utili-
ties Commission indicate the six for so
cents token rate will add about 1884 900
year to the companys income Even
then, the commission claims, the company
will not earn fair" return.
Not More Than 3.7s Per Cent.
While the commission failed to hx the
valuation Of the company in the new
fare order, it did declare the figure to be
mot less" than $23,Ooo,Ooo. With the
estimated s254.000 in added revenue, the
commission said Its total return on the
$23.000,00 figure would be only 379 per
cent. All other utility corporations in
the District arc earning 4 considerably
higher return.
In granting the higher fare, however,
the utilities commission put both the
transit company and the North American
Co. on the spot" 1t told them, rather
bluntly, that they would have to replace
all old street cars now in service with
new and modern rolling stock
But why did the commission "pick" on
the North American? True, it controls
the transit company, owning slightly more
than so per cent Of the 100000 shares of
the common stock outstanding The re-
mainder Of the stockholders, or most Of
them, at least, are said to live in WASH
ington. The commission did not tell the
local stockholders to chip in with the
North American and make up the neces-
sary funds to purchase new equipment.
Can the stockholder be persuaded to invest
more funds in company which is not
earning enough now to pay dividends?
The reason the North American was
picked by the commission to come to the
aid Of the transit company was simply
because its acquisition of the transporta-
ton system gave it control of veritable
gold mine"-the Potomac Electric Power
Co. From Potomac Electric earnings since
the transit merger, North American has
collected more than $1O,000000.
In fact, here is exactly what the utilities
commission said in the fare order:
with the corporate set-up in control of
the Capital Transit Co., with the ability
of the controlling company adequately to
protect itself under the most adverse cir
cumstances, plus the outlet which the local
operation affords Of power Of another op-
Grating company potomac Electric sells
power to. the transit company and the in
crease in revenues of the operating company
to request, and the controlling company to
make available funds with which to bring
about the replacement of all old street cars
in the interest Of the operating company
and the riding public"
To Explore Utility Links.
When the investigating subcommittee
delves into the relationship between the
transit company and the North American
it also plans to study the holding COM
pany,s connections with all other WASH
ington utilities. It proposes to learn why
the Potomac Electric was not made a party
to the merger as advocated when the
merger plan was proposed years ago.
william NICK. Clayton. chairman Of the
Public Utilities Committee Of the Fedora
ton Of Citizens' Associations, recently told
mass meeting Of civic organization repre-
sentatives opposing the fare increase that
had the power company been included TN
the merger, as originally proposed, street
car fares would be on the decline rather
than on the increase.
After probing into this corporate set-up
the investigating committee finally plans
to determine who got the benefit out Of
the merger? Neither the street car riding
public nor the traction company might at
this time, answer Il"