Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-01-21
New Fare Rise
'Disalppoints'
Transit Official
20-Cent Rate
And Other increases
To Start Jan. 81

transit 60. COQay Or6uQeo OlS-
appointing" the fare increase
decision announced late yester-
day by the District Public Utili-
ties Commission.
The comment came from Rob-
ert E. Harvey. vice president and
controller of the company, on the
commission order establishing:
A 20-cent cash fare. tokens five
for 80 cents and institution of q
75-cent weekly permit, which
patrons may use at 10 cents per
ride. with free transfer privi-
legeS.
Effective date is 4 am. Janu-
airy 81. At that time, the unlim-
tied ride weekly pass of more
than 20 years standing here goes
out Of existence.
Capital Transit had asked for
the 20-cent cash fare, but it also
wanted tokens to be sold at five
for 95 cents and the weekly pass
to be abolished outright. Pres
ent fares are II cents cash,
tokens five for IS cents and q
$40 pass.
BrOadwater Silent.
Other than voicing his cha
grin. Mr.. Harvey reserved COM
ment until he could study the
41-page-long findings and order.
Company President j. A. B.
Broadwater also refused to indi-
cate what he thought Of the de-
cision or the prospects of TAX
ing the case into court.
In q recent statement to the
Payne subcommittee investigat-
ing mass transit here, Mr.. Broad
water declared the company in
tended to file soon for another
rate increase. regardless of the
outcome of the drawn-out pro-
ceedingS just ended.
Capital Transit aimed its case
toward increasing its gross pas
senger revenues. by about So
million and getting a II per
cent rate of return on its in
vestment. The commission con-
cluded that a Sill million in
crease in gross passenger rev.
enueS-for a net increase of
$494, 546-would be enough. The
commission computed the rate
of return at 6.32 per cent.
Transit. Policies Criticized.
In their lengthy findings. the
three Observation-Disclosures Rob-
ert Mclaughlin, Robert Weston
and Brig. Gen. Louis w. PrentiSS.
District Engineer Commissioner.
we're critical of a number Of pol
icies and practices Of the transit
company.
They noted the record Of sub
stantial stock dividends declared
since 1919 when the Louis Wolf
son syndicate bought control of
the company. Stockholders, the
commission said, have made
Every substantial economi c
gains" But. the opinion went
on:
I'VE would observe that. con-
trary to the company's conten-
ton, no duty to investors requires
us to attempt to set fares un-
reasonably high in order to i'm
prove earnings and permit divi-
dends to the point that the mar
ket price of the company's stock
equals the book value of the
stock.
I'm general, we find that the
investors must look to an i'm
provement in use of mass transit
in Washington-economic recov-
cry Of the company-rather than
to constant rate increases. to re-
store further the market value Of
their shares. The commission
will not impose rates of fare in
tended to improve present mar
ket values"
Hit High Salaries.
The commission also submitted
that it believes the salaries of
Mr.. Broadwater ($40.OO0), Mr..
Harvey ($21. OOO) and D. S.
Weinstein, executive vice presi-
dent $3.50, OO0). to be too high. +"
This observation led the men,
bers to refuse to consider as OPP
Grating expenses the 500 per
meeting fees paid to company di-
rectors, although. they conceded,
the amount is too small to make
much difference.
The company was also accused
Of:
/. Undertaking and distort-
ing the true picture" Of opera
tons for 1851 and 1852 by fall
ing to account properly for its
unredeemed transit token liza
bility,
2. Excessive accruals" in the
reserve fund covering injuries,
damages and income tax liabili-
ties. 81. We viii continue to
closely scrutinize these accounts
to guard against habitual over
accruals which ultimately preju-
dice the interests Of the transit
riders" the commission declared.
8. Discrimination against Ne
groes by refusing to hire mem
bers Of that race to operate
transit vehicles. This, the COM
mission said. cost the company
$3.50. 900 in 1852 in overtime pay
because Of an insufficient num-
Der Of white operators. The
commission further wondered
whether the company was vio-
lating the Constitution by its
race policy.
Seen as Duty.
Although the commissions
job was confined to studying ex-
penSeS in the transit case, the
members said: TT is, of course,
our duty so to act as to avoid
any possibility of infringing
Constitution rights"
The commission said, more
over. that insufficient evidence
~s,0~ SM~.r Sa..~na ~, 49, ,.-..-.. =.