Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-06-17
voIuminous Record
Studied for Findings
lin Transit Case

4 The Public Utilities Com
mission today began digging into
more than 1900 pages Of tran.
script and exhibits Of its Capital
Transit Co. hearings to compile
findings for U. S. District Court
for the District Of Columbia by
July s.
The commission is under court
edict to report the results of its
special investigation Of transit
affairs. This report is to be q
key in helping the court de-
termine whether the dividend
policies Of the present manage
ment weaken the company to
the detriment Of the public in
tereSt.
Capital Transit financial prac.
tees have been under commits.
sion investigation since last Feb
ruary. The probe was precipitated
by the company's announced in
tention to redeem the last $50
million Of its bonded indebted
ness and to declare q new 1884,
600 dividend.
Redemption Upheld.
The commission obtained tenn
porary court injunctions against
both these moves. Later 1t ap-
pealed District Court orders dis.
solving the restraints. The U. S.
Court of Appeals for the District
Of Columbia subsequently ruled
the bond redemption legal but
referred the dividend question to
the District Court for further
study, to be hinged largely on
the final findings Of the utilities
commission.
Indications were the commits
sion'S legal brief and conclusions
win be anything but brief. Rob-
ert M. Weston, In the absence
Of Chairman Robert e. Nc.
Laughlin, said that IAN extern.
sive opinion seems justified"
Normally, we favor short,
terse opinions" he said. But
this case must be elaborate, be-
cause it is a case of first i'm.
preston here-nothing like It
before. A lot Of utilities COM
missions elsewhere are following
it, as q matter Of fact"
Account In Question.
| Among the numerous and
complex accountancy and eco
Monies approaches pursued by
both sides during the investiga-
ton, chief emphasis conferred
on the depreciation reserves &C
count kept by the company. The
commission staff commended this
reserve had an indicated" de.
flciency Of more than 50 million.
The company countered that the
property depreciation involved
was only q bookkeeping account
to begin with, and was not de.
ficient in the next place.
BY showing the account de-
ficient, the commission contend
ed, a restriction on the amount
of company surplus available for
dividend distribution would be in
order. On that basis, dividend
declarations of which there
have been two since last Febru-
airy should be prohibited since
the company's financial position
and service to the public would
be jeopardized.
Sitting through the technical
details is only part Of the COM
missions problem. The men,
bers-the two civilians and Brig
Gen. Louis w. Prentiss. District
Engineer Commissioner -alsc
must wade through a number Of
challenges involving personali-
ties.
Transit attorneys raised this
question at the final session last
Friday. Edmund L. Jones de-
clared:
ANY reviewing court, W.
think, would welcome the oppor.
tunity to nationally and objec'
lively assess the administrative
expertise of the tribunal who's
decision is before them"
Sees Impertinence.
Commission Counsel Lloyd 3
Harrison objected to this on tn
ground that the proposition wa
grossly impairment"
1.-THE qualifications Of tn
members Of this commission ar
fixed by statute and have bee
carried out by nomination Of tn
President and confirmed by tn
Senate Of the United States" h
said.
Chairman Mclaughlin inter
jected that he would "rathe
have the information in the rec
ord than out of the record, s
let's finish your speech, MI
Jones'"
The information submitted b
the transit company lawyer wa
substantially that presented Z
the Senate during the confirma
ton proceedings Of both Mr.. Nc
Laughlin and Mr.. Weston las
year. It showed. according =
Mr.. Jones. that both men hal
experience as lawyers. but "ha'
never managed a public utility
had never participated in tn
management Of any business en-
terprise and had never made de
probation studies of utility prop
critics or other businesses"
To this, Mr.. Harrison coun
tered it would be equally in orde
if the company would stipulat
that no court is qualified to pas
on the question of the case "be
cause they have never operates
a transit authority"