Evening star., 1952-06-23

Not Justified,
Says Flanagan
Londis Report Full
Of Confused Theory,
Chuirmun Contends
By Colt HendIey, Jr.

1uUIlC OClllLleS COMMISSION
Chairman James H. Flanagan to-
day said a report before Congress
criticizing the PUC's handling of
transit affairs here was full of
confusing and baSeless theories
and charges.
Mr.. Flanagan made the charge
in a statement prepared for the
Senate District Committee.
He will appear before the COM
mittee at 3 pm. tomorrow. Nom
PortioI Text Of FIonoeon Reply to Londis
Report. Poee AS
Tronsit Strike Due Next Week II Tolks
Foil. Poee A.
mated by President Truman for
|another term on the PUG, he has
been under fire by the committee
which must confirm his nomina-
ton.
The report he referred to was
made by James M. Lands. former
chairman of the Securities and
Exchange Commission. Tie Lam
dis report is being studied by a
House District subcommittee
which has been looking into the
transit situation here.
Any Errors Honest"
Mr.. Flanagan declared:
IF I have been guilty of errors
Of Judgment. they have been hon.
est errors. I insist, however, that
my judgment on matters of major
Importance during my tenure of
Office has resulted in fair and
equitable treatment to both the
citizens of the District and to the
utility companies which serve
them"
He pointed out that the Lands
report, in commenting on the four
fare increases granted to the Cap
ital Transit Co. since 1947, stated
lit cannot be fairly said that any
one of these increases was not
necessary"
Mr.. Flanagan said the function
of the PUG was to insure safe and
adequate utility service at reason
able, just and non-discriminatory
rates.
Generalizations Cited.
"A close study of the Lands
report does not disclose a single
specific instance of lack of safe
and adequate transportation Serv-
ice for the residents of the Dis
Itrict," he said, adding:
obviously, if the fare increas-
es which my commission granted
were reasonable. then the many
charges contained in the Lands
report are without merit.
I'm view of the foregoing, it Is
my opinion that any further dis
cussion of the confusing and base
less theories and charges con-
tanned in the Lands report is aca-
demic."
Mr.. Flanagan, however, went
on to comment on each point
which Mr.. Lands made against
the PUG.
One Lands charge was that
the PUG had allowed accounting
methods which cd not give a
true picture of substantial profits
made during the war years. To
this, Mr.. Flanagan replied that
the transit company's reports
have been prepared in accordance
with standard system of accounts
prescribed for transit companies.
Stand on Tax Refunds.
Commenting on a charge in the
Lands report that certain large
tax refunds were not recaptured
for the benefit of the public rather
than the stockholder, Mr.. Flana-
gan declared:
"The Lands report fails to state
how. under the laws and decisions
of the courts. this commission or
any other Federal agency. includ-
ing Congress itself. could accom-
plish this result"
The Lands report also criticized
PUG for allowing the transit COM
pany to use tax refunds and other
earnings to write certain inflated
property charges off company
books. To this Mr.. Flanagan
said:
1T seems to me that any COM
pany which deliberately and of its
own volition uses almost So mil
lion of its own earnings and sur
plus to eliminate an inflationary
item from its books, and thereby
puts itself in a position where it
cannot declare this amount as
dividends to its stockholders, de-
serves a pat on the back and not
cynical comment to the effect that
it has more cash than it can use
anyway"
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