Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-03-10
Financial Outlook
Capital Transit
Explored byCourt
By Howard [. Dutkin

By Howard l. Dutkin
Public Utilities Commission
Chairman Robert E. Mclaughlin
said today in Federal court that
Capital Transit's financial posi-
ton by the end of 1854 might be
good from a short term stand
point"
His remarks were made in
reply to questions by Judge
Edward M. Curran, who is hear
ing a suit for preliminary in
junction brought by the PUG.
The commission seeks to FORE
stall the transit firms planned
redemption of $50 million in
bonds and Accent dividend to
stockholders.
Affidavit cited.
Judge Curran cited an affi-
davit from Robert E. Harvey,
vice president and controller of
the transit company. to the eff
feet that company cash surplus
at the end of this year would
total $1.8 million.
The judge posed the question,
assuming the statement is true
and assuming no dividend pay
ment would be made: Would
you say the financial position
OF the company at the end of
1854 would be good or bad?"
Mr.. MscLaughlin replied: 81
think it would be good from a
short-term standpoint"
Short Range Outlook.
The judge then cited figures
from a supplemental affidavit of
Mr.. Harvey'S which estimated
the cash surplus on January 81,
1855. would be $4,000, 900. He
posed the same question to Mr.
Mclaughlin. who again said he
felt the company's financial
position, if the figures were COR
rect. would be good from a short
range standpoint.
But, Mr.. Mclaughlin stated
the P. U. c. has authority to
require certain changes in tran
sit operations such as conversion
from streetcars to buses. He
pointed out such moves would
entail a considerable outlay. He
told the court that the object
of a P. u. C. investigation set
for March Is is to determine
exactly just what the company's
financial position would be.
Must Have Evidence.
The PUG is contending that
dividend payments and the bond
redemption plan among other
things point to a possible liqui-
dation of the company with COL
lateral injurious effects on the
public welfare.
AT one point during the ques-
tioning, Judge Curran said: Il
have got to find out when the
company is in good financial
position and when it isn't. l
have got to have evidence"
During a hearing recently on
an application for a restraining
order by the PUG, Judge Curran
had remarked that he is con-
cerned about the rights of the
bondholders under terms of an
agreement with the company
which had been sanctioned by
the PUG.
Under the agreement the call
ing of the bonds is to be adver-
tiSed and the bondholder en-
titled to payment as soon as the
money is put up by the COM
pany with the trustee.
An argument developed today
between opposing counsel as to
whether the advertising was
necessary in order that the bond
holders be assured of immediate
payment. 1t was pointed out
that the advertising was not
placed because it had been held
up by the restraining order.
Complied with Agreement.
Judge Curran commented: ITO
all intents and purposes, Capt.
tai Transit has complied" with
the agreement. "They didn't adj
vertise because you stopped it
by getting a restraining order"
he said to attorney Lloyd B. Har-
rison. PUG counsel.
Attorney Godfrey Munter, de-
clared that under the terms of
the agreement the trustee was
"irrevocably" authorized to paw
off for the bonds.
An order scheduled to expire
at 3 pm. yesterday, forbidding
the company from going through
with stock dividend and bond
redemption moves. was extended
by the judge for the duration
OF the hearing.