Evening star., 1950-11-27
PUCHeariing Sci
On Stock Split by
Capital Transit
Dec. 8 Is Dute Named
As Company Opposes
Pepeo Rate Raise

Pepeo Rate Raise
The Public Utilities Commis-
sion today scheduled a public
hearing for December 8 on the
Capital Transit Co.'S petition te
split it's stock four ways and re.
duce the par value from $100 te
$25 a share.
This action came as Capita,
Transit officials were undergoing
cross-examination before the PUG
on its opposition to an overall 9.4
per cent electric rate increase
sought by the Potomac Electric
Power Co.
The transit company faces a 81
per cent increase in its power bill
under the Pepco proposals. No
only is Capital Transit opposing
the raise, but it has stated it should
have reduction of about $780,.
900 in its annual bill. An increase
would mean higher streetcar ano
bus fares, transit officials stated
Asked Split Nov. TO-.
It was November 20 that the
transit company filed with the
PUG petition to amend it's char
ter authorizing it to Subdivide OF
split on the basis of four shares
for one, all of it's authorized ano
outstanding shares. The com
pany also requested that if a cer-
tif1cate be necessary the commits
sion issue such a certificate au-
thorizing split and the issuance
OF the new stock.
The PUG also ordered that an
investigation should be instituted
to determine certain technicalities
involved in the stock split. This
involves the creation of capital
surplus in the amount of IS ,250 900
now recorded on the company's S
books under the heading of road
and equipment.
At today's electric rate hearing
Robert E. Harvey, special assistant
controller for the transiC COM
pany, was being questioned on
testimony he had offered previ-
ously that the company should
have received reductions in rates
in the past II years. as did ether
Pepco customers.
Calls Rates Equitable.
Mr.. Harvey stated that the
money paid to Pepco for power
had been in accordance with the
contract terms established In
1888. He stated he felt the rates
set up at that time for Capital
Transit, under it's separate con-
tract, and other Pepco customers
were equitable.
However, he said he did not be-
1ieve the transit company should
have paid some 81 million which
it would have saved if it had res
ceived rate reductions comparable
to those given other customers.
The end of the long hearing
which has been under way spo-
radically since August 21-was not
in sight yet. Pepco is seeking an
overall increase which would bring
in additional revenues of $3.379.-
600 a year.
SIS Million Recommended.
The PUG staff has recommended
that the increase in Pepco's in
come should not exseed SIS mil
lion year. Mr.. Harvey, in his
previous testimony. has main
tanned that the power company s
insome should be raised only
$684, 900.
Meanwhile, the transit company
reported today that sharp i'm
provement in October raised net
income for 10 months of this yeal
to $537 ,126, compared with $685.
884 in the same 1949 period.
October net income was $751;.
1876, compared with $83,714 in thu
preceding month and was more
than double $71,082 in October
1949.
So Dividend Declared.
The improvement supported +.
recent forecast by E. Cleveland
G1ddings, vice president, that 1851
earnings would cover the So divi.
dend payments declared this year
This would require an income oj
$4,000 for the year on the basi:
OF 100000 shares outstanding.
Operating revenues for the 10
months totaled $22,637,19 COM
pared with $23,4S4,5s5 a year
earlier, lag of 3.6 per cent. AS a
result of higher fares which went
into effect in July, October reve-
nues of $2,435.72O were 80 pe,
cent above $2,360,676 in October
1949. ,
Operating expenses, taxes and
depreciation for the 10 months
totaled $21 ,906, ,697, a decline of 3s
per cent from a year earlier. The
same item in October was $2,258..
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