Evening star., 1953-12-09
Transit Control
ByWo|fson Hit
As a Reversal
Counsel Says Sale
Was Okoyed on Bosis
Of Non-interference
By Don S. Worren

Subcommittee said today the
Wolfson syndicate of Florida
probably would not have been
allowed to buy a major holding
in the Capital Transit Co. had
it been anticipated that the
group would take over actual
control of the company.
The point was raised by Albert
E. Conradis. attorney for the
>---~-~---~---~---
Wolfson Questions and Answers During
Tronsit Probe. Poee A-33
subcommittee as it resumed pub
lie hearings today.
With j. A. B. Broadwater, the
$4,000 a year president of the
CTC on the stand, Mr.. Conradis
cited for him statements made
by Wolfson spokesmen in l949
when they were seeking Federal
agency approval of purchase of
a major share of CTC stock.
Disclaimed Big Shakeup.
These declarations then were
to the effect that the Wolfsons
were interested in the stock only
as an investment. had no inten-
ton OF shaking up the Board of
Directors, replacing top manage
ment officials and had no in
tention of taking over control"
OF the company, Mr.. Conradis
pointed out.
Mr.. Broadwater agreed that
those statements had been made
to both the Securities and Ex-
change Commission and the In
terstate Commerce Commission
These agencies later approved
proposals by which the Florida
syndicate bought about 46 per
cent of the company stock for
$40 a share. or for a little more
than 50 million.
Had you told the ICC and
SEC to the contrary" Mr.. Con-
raids said, "the chances are YOU
would not have won their ap-
proval."
Mr.. Broadwater said he
couldn't say what the commits
sions might have decided but he
stoutly maintained that what
the Wolfson spokesmen told
them at that time was the truth.
Says Conditions Changed.
At that time, he said, the
prospective Wolfson investors
were ION the outside looking in"
and that later, after they had
been in the company. conditions
changed and they decided i'm
could be made.
He also insisted that the Wolf
sons had told the Federal agen-
cieS that they wanted to have
at least four Wolfson represent
atives as members of the 15-man
board OF directors.
Mr.. Conradis suggested that
most all of the directors since
had been changed, with the ex-
ception of two. The witness cor
rected him to insist that four
of the "old" directors were still
there.
Mr.. Conradis also brought out
that two OF the former directors
had resigned because of q con
flict of interest" He named Rob-
ert V. Fleming and Alfred G.
Neale, who were directors of
the Potomac Electric Power Co.
They chose to stay with Pepco
and gave up their places on the
CTC board because at that time
Pepco was moving to increase
the rate for power sold to >the
transit company.
Asked Only Two to Quit.
Mr.. ConradiS asked whether
other former directors had been
asked to resign, and Mr.. Broad
water insisted the only two that
he had asked to leave were Mr..
Fleming and Mr.. Neale.
1t was brought out today also
that, after the Wolfsons took
over control of the company in
1850, a study was made of the
plan to sell CTC stock to COM
pany employees.
Mr.. Broadwater said the ques-
ton was surveyed by the execu-
(See TRANSIT, Page A-33.)
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