Evening star., 1954-05-28
Capital Transit
Deal Bypasses
Utilities Board
Property VoIued at
SIS Million Shifted
To Stockholders
By DonoId B. HodIey

The Capital Transit Co. today
transferred ownership of about
SIS million of property, includ-
ing Glen Echo amusement park.
to its individual stockholders.
without approval of the Public
Utilities Commission.
officials of the Public Utilities
Commission. which is studying
company affairs and has pro-
hibited further payment Of
dividends during the study. said
the legality of the property
transfer is questionable.
However, a company spokes-
man insisted that "the distribu-
ton of the dividend in kind Is
not in conflict with any order Of
the court or the Public Utilities
Commission"
Stock Distribution.
The property transfer was ac-
complished today through the
distribution Of stock certificates
Of Continental Enterprises, Inc.
to about 1900 stockholders Of
Capital Transit on a share-for-
share basis.
Capital Transit directors au-
thorized the formation of Con-
tinental Properties on February
Is to take over the Glen Echo
Park Co. and real estate in the
Brentwood area of the District
and at Lyttonsville, Md.
The new company has 960, 900
shares, the same as Capital
Transit. Capital Transit stock
holders of record March IL re-
ceived the distribution.
The amusement park, which
has been carried on the COM
pany's books at $19,240, includes
1873 acres and buildings that
originally cost $401 500.
On the basis Of the parks
net income in 1853 amounting
to sol.777 after taxes, William
Falk, executive accountant and
auditor Of the PUG, recently
testified the park had an indi.
Gated value of $9o0.0v0.-
Bought Under Old Ownership.
The Brentwood and Lyttons-
vile properties were bought
before Louis E. Wolfson and
his associates took over Capital
Transit. They were intended for
use as sites for a bus garage and
storage facilities.
The Brentwood tract Of 14.97
acres was purchased by the
company in 1943 at a cost Of
$144.754. 1t is just north Of
the Washington Terminal yards.
The Laytonsville tract was pur-
chased in 1946 for $17,387. The
value of both tracts has in
NACdoCO OuUSIdIltldlly.
Company directors at that time
felt they were needed to keep the
system in good condition. They
were paid for from company in
come derived from riders Of
streetcarS and buses.
The company statement today
described the transferred proper
ties as non-transit properties no
longer used or useful in Capital
Transit's business of providing
public transportation and were
not included in the rate base used
for determining fares"
Commission officials said the
proposed transfer was never sub
mitted to them for approval and
pointed out that its legality was
being considered, along with the
general financial policies of the
company, under Order 4060.
which prohibits dividends pend
ing the study.
Official Taken by Surprise.
When told of the company's
action today an unidentified
commission official commented
wryly that I'VE have to get a
surprising amount of informa-
ton about Capital Transit from
the newspapers these days"
He said the commission had
to be on its toes to keep up with
the company's condition and ac-
tivitieS, because the company
had not been cooperative in
furnishing information except
where specifically ordered to
do so.
He also expressed an opinion
that distribution of the COM
pany's property, whether in cash
or in shares of another company.
amounts to the same thing.
1T further depletes company
resources which may be needed
to assure continuance of ade-
quate service to citizens of the
District of Columbia. he said"
Meanwhile. directors of the
company yesterday voted to ap-
peal to the Supreme Court a