Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-02-26
Capital Transit
Head Hints New
Dividend Is Near
Broodwoter Expects
TO Ask Payment From,
81 Million Surplus

~~ sSS
Indication that Capital Transit
Co. stockholders may get another
chunk OF the company's earned
surplus" fund, now standing at
more than ~ million, came today
from its president. ]. A. D. Broad.
water.
In a talk prepared for delivery
|at q Joint meeting Of the Public
Utilities Committee and the Rail-
roads and Transit Lines Commits
tee Of the Washington Board Of
Trade At the Burlington Hotel,
Mi. Br0adwater said he may reCs
0tfitfiehd the move soon.
The company created 4 fufoF
IN JANUARY when IL declared a
SHIbBGa .shafe bonus dividend 10
lts st0ekh6lders while awaiting 4
Public Utilities Commission de-
6lsl0h Oh d request for a fare Ina
crease based Oh a plea OF p00P
earnings
Repeated demands for A e0ha
eFessl8nai Investigation resulted
In assignment by The House BlsG
tFlet Committee Of Representa-
1--we Patterson Republican, Of
connecticut 10 PeVleW complaints
AGAINST the company He plans
70 ME A report and Recommended
items with the Gemmittee, which
then WIN decide whether a formal
lnVestlRatlen IA warranted,
" Milll0R Remaining,
the pempanys accumulated
surplus stood at about az million
before distribution Of the special
dividend OF about Sa,4 million,
Mr., RFoadWater said today, "
think the payout OF some part
OF this 81 million was long over
due, There Is still more than a.
million remaining, and some Of
this, IN my opinion, should also
DO paid out to the stockholders,
y may recommend such action
IN the not too distant future"
The transit president said he
believed q dividend payment to
stockholders Of not less than $3.50
a share annually on the present
par value Of $3.50 should DO
established and maintained.
This must be done, he said, IL
transit In Washington Is to con-
tinue under private ownership"
At the current rate, the dividend
amounts to 81.
Cites Two Alternatives.
Mr.. Broadwater said there were
only two alternatives "in provid-
Ing transit system that will con-
tinue to serve the Metropolitan
Area and aid in its orderly eco
nomic and cultural development:
/. An assurance that Capital
Transit would be permitted to
earn at least a rs per cent return
on its investment in plant and
equipment. Last month, the PUG,
which granted the company q
10-cent increase in the price Of
the weekly pass, concluded that
6A per cent was fair return, he
noted.
2. Creation Of q metropolitan
transit operating authority.
Noting that the PUG in 1947
found rs per cent return fair.
the transit company head said
the commissions later decision
was q mystery" to him In view
Of the higher cost Of money and
inflated values.
He said rs per cent return
could be set by rewriting the regu-
latory procedures by congressional
action or by q more liberal In.
depreciation Of present adtninis-
trative laws. He explained this
would eliminate costly and drawn
out fare and service hearings, and
cut out substantial legal expense
and waste Of time by company Of.
f1cials who could be applying their
efforts In other directions.
Hits Archaic Procedure.
He blamed present "ArchAic
procedures" Of the city and In
other Jurisdictions partly for The
unhealthy financial condition Of
the transit industry Because 0f
the record Of financial instability
81 transit companies, he said, they
fall 10 attract conservative eapltai
and appeal only ITO capital 0i The
most vehtufes0if1e type"
MI Bf0AdWater said The e0ndia
tl0h can be partially corrected
heFe by eHttlhe down The time Ian
between hlaheF operating cost lTs
eeBtl0h from vase increases and
bhe Hrahtlhe OF 4 fare Increase,
WIN assurance Of A w per
cent RETURN capital Transit
w0Hid nave the incentive 10 INV
70 acquire ether privately u0Wned
tpaRSlt lines IN the MetPepelltaN
AFear " They could no obtained
~ 2 raw price no went ON, and
htlF operations could than be
IntegFatea and meFsed into q
slngle system,
The transit afieial declared
that . pFiVately-apeFated Gom-
pany eaAnot aiVe the type Of tran,
slt service desired BY the people
o. washington In the face OF the
tremendous pressuTes" by the
public and BY labor, and because
OF the form OF regulation to which
the company is subjected,