Evening star., 1953-02-27
runsit
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penses, already has cast some
doubt on these hopes. the finan-
cial leaders were quick to point
out.
The company'S January report.
isued late yesterday. showed net
income of $56,121 for the month,
compared with $36,S86 in jan
uary, 1852. But the year-to-year
drop in passengers widened to
11.8 per cent and the decrease
in mileage. q major source Of
expenses, was down only 81 per
cent.
II feel very badly to hear
that Capitol Transit directors
have increased the dividend
again." said a banker and for
mer Transit director.
Every company should have
an adequate surplus on hand so
that it's stability is assured
through both bad and good years.
Cutting the surplus is very bad
policy.
"The special dividend of $3.50
on new stock, or $40 for each
old share, reduced surplus sub
stantially at the start of 1852,
and failure of earnings to cover
1852 dividends further reduced
it," he continued.
Sound Company in 1949.
capitol Transit was q sound
company when it was taken over
by the new group in 1949, hut
I am afraid there won't be r.uch
left when municipal ownership
becomes necessary to maintain
mass transportation here"
Another former director was
cautious and said he did not
feel qualified to comment on
company affairs.
However. do know that an
adequate surplus is necessary
for sound operation of the COM
pany." he said.
The head of a local invest
ment house said he does not
believe there is justification for
paying out more of the surplus.
There is no surplus available
for dividends when you get right
down to it," he said.
I'm case the fare increase of
last fall isn't sufficient to meet
the higher dividends, I don't
see how they can get any fur
ther increase without destroying
the transportation system. The
system already is disintegrating
in the suburbs.
ut will be ironical, after ruin
alton Of the company, if Con-
gress and the citizens of WASH
ington approve use of public
credit to purchase what is left
at a price of around $40 million,
the present rate base. Just
think-$20 million of tax-ex-
empt bonds for what is left"
Community Has Stake.
The senior partner of another
securities firm declared: 81 view
this further increase in the
transit dividend with dismay.
Washington isn't used to this
type Of operators. They are here
to get every last dollar they can.
It is clear they have no local
pride or interest in the continued
soundness of the company.
1T is a very bad thing to see
I think the community has q
very definite stake in what is
going on, for a financially sound
company is necessary to serve
the community properly in the
future"
Shouted another broker over
the telephone when informed of
the dividend increase: "How
can they do it? / am sur
prised. Looks like they are
going to milk the company for
all it's worth. Paying out divi-
dends before they are earned.
simply doesn't add up"
Commented still another
broker: Il am surprised that
Capital Transit increased the
dividend again, but I doubt if
our customers will be concerned
much about it, for most Of them
sold their transit shares some
time ago."
"It's a big surprise to me-"
said an ofiicial Of the Washing
ton Stock Exchange. II don't
see how they can increase the
dividend further when they
didn't earn last years dividend
and still don't know what effect