Evening star., 1952-07-29
Plan 1-MetropoIiton
Transit Authority
privately Owned


One company operating in the
Washington Metropolitan area
Other existing companies which
now serve Maryland and Virginia
to be purchased by the Capital
Transit Co. through issuance OF
common stock, or cash purchase
|at fair value.
l. Economies of Unified Opera
tiOn.
A unified company would elm
mate duplication Of personnel
equipment, overhead and other
items. It could be operated at a
lower cost than all of the pres
ent systems. and would permit
more equitable fares and transfer
arrangements than are possible
with four or more independent
companies serving the same area.
2. Fair Rate of Return.
Section 8, Par. 2 of the law
creating the Public Utilities Com
mission of the District of Colum-
bia. as amended. provides:
"That every public utility doing
business within the District Of
Columbia Is required to furnish
service and facilities reasonably
safe and adequate and in all re-
spects just and reasonable. The
charge made by any such public
utility for any facility or services
furnished, or rendered, or to be
furnished or rendered, shall be
reasonable, just and non-discrim-
inatory. Every unjust or unrea-
sonable or discriminatory, charge
for such facility or service is pro-
hibited and is hereby declared un-
lawful. Every public utility is
hereby required to obey the law
full orders of the commission Gre
ated by this section"
The Public Utilities Commission
of the District of Columbia in
Order No. 3199. dated May 8, 1947,
stated:
I'm view of all the facts of
record the commission finds and
concludes that rs per cent con-
stituteS a fair rate of return"
The rates of return set by the
Public Utilities Commission at
various times have been 71a per
cent and ga per cent. A rate Of
return of 71a per cent may be the
correct figure for a privately
owned Metropolitan Transit Co.
To maintain an uninterrupted
efficient modern service at all
times. the Public Utilities Com
mission, if it does not now have
the authority (and we believe that
it does have), should be given au-
thority by Congress to approve
automatically a rate increase to be
effective not more than 20 days
after the Company files data on
increased costs, or proof that the
7H2 per cent return is not being
earned on the company,s overall
operations. This can and should
be incorporated in the franchise
Of any private ownership plan.
This important policy must be
as the first incentive
step in consummating a unified
under private owner
ship.
3. Labor Negotiations.
The establishment and main
tainence Of a fair but consistent
rate of return is a sound approach
to the continuation of private
capital In a Metropolitan Transit
Co. It would then be possible for
the company to negotiate q labor
contract without threat of a.
strike that would paralyze the
community.
When a strike occurs, the pub
lie blames the company and/or|
the regulatory body is more toI
blame than either company or the
union.
It would not be fair or proper
for a Metropolitan Transit Co. to-
have strained management-em-
ploye relationships because Of In
ability to reach an agreement on
q contract when the company is
not in a position to act promptly
and freely to meet the impact Of
any changes that might be agreed
upon. Labor diSsension reflects on
the morale Of the employees Of the
company, which in turn reaches
the public. A satisfied employe|
helps to make q successful COM
pany and renders a better public
service.