Evening star., 1953-11-25
General Fare
InCreaseDenied
Arnold Lines
ICC Examiner
Suspects Owners
UnjustIy Enriched
BY WilIiom A. MiIIen

MISSION examiner charged yes
terday that Joseph L. Arnold
and his wife, majority stock
holders in the Washington, Vir-
ginia & Maryland Coach Co.,
may be 'unjustly enriching
themselves at the expense of the
public" He said they have un-
necessarily increased the rent
the company pays on a building
that belongs to them.
Examiner Charles H. Riegner,
who made the charge, denied the
company general increase of
about cents a zone. He pre-
sided at recent fare increase
hearings.
He recommended the company
be permitted to abolish tokens.
But he disallowed the company's
proposal for an additional Zone
l, with fiat 20-cent fare.
Contents of Report.
In his report, Examiner Rieg-
ner wrote:
"The fact that respondent (the
w. V. & M. Coz is paying $12,-
600 year more than it was OBJ
ligated to pay under a lease,
which, by its terms, would not
expire until 1856, suggests the
possibility that the owners of
the property are unjustly enrich
Ing themselves at the expense
of the public.
GAS in the 1852 fare case. we
here conclude that the last in
crease in rental has not been
shown to be a just and reason
able charge to operating expense
and will be diSallowed for the
purpose of this proceeding"
Former Rentals Cited.
The property involved is at TOT
North Randolph street, Arling-
ton, where the company's head
quarters and terminal are To-
Gated. Examiner Riegner, in his
opinion, recalled that from 1941
through March 27, 1850, the
company paid rentals on the
terminal properties ranging from
$4,000 to 100000 annually.
But on March q, 1850. he said,
Mr.. and Mrs. Arnold and Bernard
Wahle, executive vice president
of the line, executed a lease for
IS years at an annual rental
of $4,000.
The examiner pointed out the
old lease did not expire until
1856. He declared the new lease
recited no consideration for the
increased rental and none was
advanced by the company at the
hearing. He asserted there were
no negotiations between the
Arnolds and the company before
executing the new lease.
MIR. Wahle testified he con-
sidered Mr.. Arnold to be his
s1nerior officer and, therefore,
signed the lease as directed by
Mr.. Arnold, the examiners opln-
ion said. Mr.. Arnold is the
company president.
Respondent as a motor car
rier had no independence in ne
gotiating a lease with the Ar
nold's," wrote Examiner Riegner.
1T does not appear that any
responsible and prudent ousl-
ness man or corporation would
voluntarily agree to pay an in
creased rental such as in the
instant case"
100000 Loan.
While the company pointed
out a conservative mortgage
company loaned the Arnolds
$6OO,0OO on the property in May,
1853, Examiner Riegner declared
it appears additional security
was given. He said this appar-
entity took the form of an irrev-
ocable assignment to the mort
gagee of the rental of $4,000
annually.
Examiner Riegner said that in
view of the testimony he did not
feel called upon to determine
the actual present value Of the
property. He did say the expert
witness for the Arlington County
Board, Charles L. Hanowell, an
Arlington real estate broker,
testified the fair market value
of the property is $751; $40. Mr..
Hanowell, at the hearing, said
a fair rental value is $55. .512. or
S16,488 less than the company
is paying.
Under the report proposed by
the examiner, the Arnold line
would be required to maintain
rates not in excess of its present
cash fares between Washington
and its present zones in Vir-
ginia.
Partial Approval.
The examiner said that, al
though the company needs addi-
tional revenue, the full amount
of the requested increase should
not be granted. Present cash
fares run from 20 to 40 cents,
on a zone basis.
Attorneys James w. Lauder
dale and Manuel J. Davis ap-
peared at the hearings for the
company. The Arlington County
Board. which protested the pro-
posed increases, was represented
by Attorneys Peter j. Kostick,
Bryce Rea, jr., and Gerald L.
Phelps. The hearings were held
before Examiner Riegner in
August.
In his report yesterday, Ex-
aminer Riegner said this case
is one of three in which the
company is seeking increased
fares to offset declining revenues
caused by lowered passenger
traffic and increased operating
costs.
In the other proceedings. the
company proposes to increase
fares between Washington and