Evening star., 1951-07-16
ice Approves Split
OF Transit Stock Over
Examiners Protest
FinoI Decision on Change
From $l00 to SIS Par
Value Is Up to PUG
By DonoId B. HodIey

Overriding it's own examiners
the Interstate Commerce
Commission today approved the
proposed 4-for-1 stock splitup OF
Capital Transit Co.
The decision set aside conten-
tions of the examiners, H. c.
Howard and w. L. Fulton, that
the split was not in the public
interest. 1t cleared the way fol
a final decision on the split by
the District Public Utilities Com
mission.
The ICC approval was given by
a three-man division acting fol
the full commission. One of the
three, Commissioner Charles D
Mahaf11e, sharply dissented, as
serting that Capital Transit's
common stock has not been above
$38 a share in recent years and
has traded as low as $40 a share
in the last three years.
No Objection at Hearings.
Obviously" he said, such
prices are within the reach of the
ordinary investor without the nee
essity for a further reduction
which would result from the pro-
posed 4-for-1 split"
Mr.. Mahaffie also asserted that
patronage of the company's trans
portation facilities has been on
the decline in the face of a pop
ulation increase.
However, the ICC division ma
jority said that in spite of the
examiners findings, no objection
had been raised to the split when
hearings were conducted.
t Under the splitup 240, 900. shares
of S100 par value would be re-
placed by 100000 shares of $25
par value Each stockholder
would receive four new shares for
each old share. Total value of the
stock would not be changed.
Agreement Indicated.
The District Public Utilities
Commission on January 6 with
held approval of the splitup, but
indicated that the company had
only to eliminate a $5,250,000
"unclassified account" from its
declared assets to gain approval
When the company did not meet
this condition, the PUG later ex-
tended the time for such action,
and indicated that it was keeping
the case open until the ICC
reached decision. There were
signs this week that the PUG
would reach an agreement with
the company for approval of the
splitup.
The 1CC examiners report is
sued on January Is asserted there
was nothing in the splitup pro-
posal that would improve the
company's ability to give service
to the public and took note that
the company had no plans for
buying additional service equip
ment in the present year.
Recent increases in the price OF
the stock mot supported by
earnings" may indicate that spec
ulators rather than investors are
interested III the stock" the ex-
aminers declared. They suggested
that the plan may be expected
to enhance the opportunities of
present stockholders to dispose Of
some or all of their holdings at a
p1ofit."
Report Called CapriciOus
The report added: THE antici~
pated wider distribution of this
stock appears to be based upon
The assumption that the present
stockholders desired to sell al4c
cen more advantageously sell
some of their holdings if the price
share is reduced.
Attorneys for Capital Transit
the examiners report in
a brief filed with the ICC on Feb
ruary Is. 1t charged the report
was unlawful, unreasonable, ar
bitrary. capricious and unsupport-
ed by substantial evidence"
The examiners report, the brief
contended. "is based wholly on
conjecture and is not supported
by any evidence whatsoever. Any
temporary price increase result
ing from speculation would be-
Continued on Page Az, Col. %