Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-04-07
Utilities Aide
Tells Of CTC
Deficiency
$2.4 Million Item
Only Bookkeeping.
Inquiry Is Told
By John W. Stepp


trict Public Utilities Commission
said today that Capital Transit
Co. had an indicated def
cheney" of more than $2.4 mill
lion as of last June 80.
Testifying at a hearing on the
transit firms financial practices.
John j. Ingoldsby. the engineer.
emphasized that his figures rep
resented a purely bookkeeping
matter.
He said the amount was not
covered by the company's hook
reserve" Company Attorney
Edmund L. Jones objected to
that point in the testimony He
was overruled by Commission
Chairman Robert E. McLaugh-
lin.
The public hearing, touching
particularly on the firms re-
Gently declared dividends and a
proposed redemption of 500
million in bonds. was in it's sec
ono day.
Witnesses Resulted.
A reShuffle of witnesses de-
layed until later date the app
pearance of j. A. B. Broadwater,
company president, and Doran
S Weinstein, executive vice pres
ideEt.
Louis E. Wolfson. chairman Of
the company board of directors
and principal stakeholder, had
the witness stand through all Of
the yesterday afternoon session.
While for the most part his teSti-
mony was a rehash of financial
details that have been elected
before. twice he became so angry
over the line of questioning that
he stopped talking to get advice
from his lawyers.
In the course of the hearing,
Mr.. WolfSon also gave what is
probably the most comprehensive
summary of his business philos-
ophy. as it relates to Capital
Transit. that he has ever pre-
sented publicly.
Financial Practices Studied.
The commission is examining
the arrangements financial
practices, partly for its own
purposes and mostly on the in
structions of the u. S. Court of
Appeals for the District of CO.
lllmbia. Pending before that
court is the commissions appeal
! from lower court decision
denying an injunction to prevent
the company from distributing
it's most recently declared divi-
dend. The appellate court stayed
these actions pending a commits
sion report on whether the pub
lie interest is threatened by the
company maneuvers.
Mr.. Wolfson, under close ques-
tioning by Commission Counsel
Lloyd B. Harrison, gave what
amounted to a policy statement
that was both new and sur
prislng.
| I'VE are willing, ready and
able at any time to invest con-
Siderably more money in the
Capital Transit if a solution is
found that we could render a
proper service to this community
for an assured fair rate of re-
turn on our investment. We will
bring unlimited funds into this
company. if we are assured of a
fair return"
Mr.. Wolfson declined to say
what he now considers a fair"
return, although he indicated
that the 4.3 per cent rate OF
last year was far from adequate
and that passenger revenues are
still dwindling.
Challenges Counsel.
He stoutly denied Counsel
Harrison's implications that the
transit management has DELHI
erately tried to create bad pub
lie relations the easier to unload
the utility onto public owner-u
ship.
Regardless of what the infer
ence to your question is" the
witness declared, 1--WE want better
publicity, and we have tried
many times to get it,"
He was asked at one point
which he holds as more impor-
tant: The public interest or the
interests of company stock
holders.
Il can't separate the interests
Of the two." he replied. They're
equally important. Mr. Wolfson
made it clear, however, that If
the equity of the stockholders
should be jeopardized, he would
not hesitate to recommend the
company's liquidation to the di-
rectors' board.
Il am here to protect the
stockholders interests, notwith-
standing Congress and this COM
mission, so long as it's legal" he
declared. He said it is in the
interest Of both the company and
the community that transit
stockholders get a fair rate Of
return on their investment.
WOlfsOn Angered.
The queries that clearly agi.
tated the witness had to do with
the financial status of his BUSH
ness associates and with the dis
position of Capital Transit sur
plus.
To the first he retorted: "I
am willing to sit here from now
till doomsday to answer ques-
tons about Capital Transit, but
1 can't find any justification to
go into the financial position Of
my associates"
To the question about com.
pany surplus. he blurted. IF you
want to ask me whether we de-
clared dividend. ask me. and
the answer is yes" Then he
demanded of his lawyers. F. G..
Await and Edmund L. Jones: