Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-08-11
Examiner Urges
ice 10 Bar Sale
0fCapita|Transit
Report Says Control
By Florida Combine
Would Not Aid Public
By Francis P. DouqIos

An Interstate Commerce Com
mission examiner today recon-
mended that the commission deny
the application of a group Of
Florida businessmen for authori-
cation to acquire control of the
Capital Transit Co.
In a report which must be acted
on by the commission, Examiner
Vernon V. Baker held that the
proposed transaction would not be
in the public interest. He said:
Acquisition of control of these
carriers Capital Transit and its
subsidiary, Montgomery Bus Lines,
Inc) by persons so unqualified by
knowledge and experience. and
whose sole purpose is to obtain a
reasonable return on their in-
vestment, would present definite
hazards to continue performance
by the carriers of adequate trans
portation service to the public.
Public Should Not Be Jeopardized.
In the opinion of the examiner.
the public should not be exposed
to such hazards, when. under the
most favorable view to applicants
that could be taken of the trans
action, no counterbalancing bene-
fits to the public would result
from approval"
The Florida group is headed by
L. E. Wolfson. partner in the
Jacksonville mill supply firm of
Wolfson Brothers. and having
other interests. The group in
cludes Mr.. Wolfson's three BROTH
ers and five other Jacksonville
men.
The group has contract to buy
from the North American Co..
utilities holding concern, 109,458
shares of Capital Transit at $40
share. or total of S2,189,160.
These shares constitute 1851 per
cent of the total transit shares
and constitute effective control of
the company.
Could End Groups Effort.
# the ICC upholds the exam
iner's report it will mean the end
of the Florida groups efforts to
acquire the stock and North
American will have to seek other
purchasers for it. North Ameri-
can has been ordered by the
Securities and Exchange Com
mission to divest itself of the
shares under the holding COM
pany act.
There also is an application
pending before the SEC for auth
ority to sell the stock to the Wolf
son group. This application was
filed by North American and
hearing was held June %. If the
ICC upholds it's examiner there
would appear to be no reason for
the SEC to act.
The Wolfson group may file ex-
ceptions to the examiners report,
but their Washington attorney,
John r. Turney, said he has not
yet had an opportunity to dis
cuss the matter with mis- clients.
Earnest Money Would Be Related.
The contract between North
American and the Wolfson group
filed with the SEC provides
that the deal is off If the ICC or
the SEC withholds approval. In
such an event the $250,000 paid
by the Florida group as earnest
money is to be returned by North
American.
Mr.. Baker said in his report
that it is incumbent on the appli-
cant to show that the transaction
would be consistent with the pub
lie interest. He continued:
mo showing to that effect has
been made by the applicants in
this case. The record is wholly
lacking in evidence which would
show, and it is not even claimed,
that the transaction would bene-
fit in any way the carriers or the
public which they serve.
Evidence Is Reviewed.
ION the other hand, it is ad-
mitted that applicants have had
no experience in the transporta-
ton business. They live in places
far removed from the territory in