Evening star., 1952-07-07
Expert Backs
10 Pei. Earning
For Transit Co.
Opinion Voiced by
Company Analyst
At PUG Hearing

York today testified that the
Capital Transit Co. should carr
not less than 10 per cent on it:
investment to maintain its credit
and financial integrity.
This opinion was voiced BY
w. C. Gilman. retained by tht
transit company to analyze it.
financial structure for current
rate hearing.
The Public Utilities Commission
opened the hearing at the Dis.
trict Building today. Before it i.
a request by the transit company
that fares be set at II cents cash
and six tokens for 95 cents. The
weekly pass would be abolished BY
the company proposal. Bus anc
Streetcar fares now are IS cents
cash, three tokens for 40 cents arlo
$2.10 for a weekly pass.
s Per Cent Only Once.
Mr. Gilman testified that since
1946, the transit company has
earned as much as 5 per cent only
once. That was last year when
earnings hit 81 per cent.
He said earnings this year woulc
be Al per cent. without the wage
increase granted to employees last
month, and substantially less II
the wage increase is taken intS
account.
He cited the following earnings
Of the company: 1916, As PEI
cent; 1947. 0.8 per cent: 1948, 2.3
per cent: 1949, 2.5 per cent: 1850
4.6 per cent and 1851, ST per cent
He declared:
I'm my opinion a fair rate o1
return is not less than 10 per cent
on its rate base. This is the
amount in dollars after deprecia-
ton and taxes which the COM
pany should be allowed to earn
This is needed to maintain the
credit of the enterprise and it,
financial integrity"
Is Citizens Appear.
In previous rate hearings in.
volving the transit company, the
PUG has stated that a return o1
6.5 per cent was not unreasonable
The company makes the point
that it has never earned this rea-
sonable rate specified by the PUG
Only Is citizens showed up al
the District Building to attenc
the hearings. Arthur B. McNerney
representing the Federation Of
Citizens Association, is attending
as an official observer for the
group. He said the federation wa.
not intervening in the case as il
has done in the past.
Mrs. Selma w. Samols, repre-.
senting the Progressive Party oi
the District, testified her grour
was opposed to any increase ir
fares.
L. Seth Schnitman, president o1
the Arkansas Avenue Community
Association, testified his group
was ready and willing to beal
part of the higher costs of public
transportation. He said the pub
lie should not be required to bear
the whole cost and stated he was
opposed to the elimination o1
either passes or tokens.
Controller Presents Statistics.
He said the PUG should moi
grant an increase which would
substantially reduce the number
of people using public transpor-
tation.
The first witness at the hear
ing was Robert E. Harvey, vice
president and controller Of the
transit company. He began pre-
senting statistics to show that
the company needed the higher
rates.
Mr.. Harvey said the sale Of
weekly passes had been declining
steadily since the price was in
creased to $2.10 early this year
Sales are off 11.2 per cent over
the previous year, he said.
Pass Has Lost Appeal.
'"This reduction in weekly passes
sold indicates that a price beyond
50 is not attractive to the transit.
riding public in Washington" ht
said. "It has resulted in a de.
cline to the point where the per.
centage of passengers riding or
weekly passes has decreased to thu
lowest in the history of the com.
pany since the pass was instituted
In the fare structure"
Mr.. Harvey said the transit
company did not believe there wa
any advantage to the firm or t.
the great majority of passenger
In continuing the weekly pass.
He declared the 10-cent boost il
the price of the pass had failed tt
produce the income which tn
PUG had estimated it would. Con
sequently. he added, the compan,
is earning substantially less thai
q fair rate of return.
Mr.. Harvey then presented fig
ureS to show that the increases i
bus and streetcar fares since 1913
had not kept up with other items
He said the average fare ha'
increased So per cent since 1913.
when the cash fare was 10 cent:
tokens sold for three for Is cent
and the weekly pass cost $1.25. I
that period the consumer pric
index for Washington showed a
increase Of IS per cent, he de
clared.
Bus and streetcar operator
wages jumped 1872 per cent durin
the period, he said.
Mr.. Harvey also pointed OF
that The Washington Star an
The Washington Post had in
creased their weekly subscriptio
rates 169 per cent since 1889: ths
. loaf Of bread cost 100 per Ger
more and Uario,,e okI,n,, Co. s..-.