Evening star., 1954-05-02
More D. E. Controls
Over Carriers Urged
In Congress Report
CONTINUED From First Page.) )

peIIuSIlC, VI oregon. 1Aey naQ
the approval of all members of
the District Committee to file
the report, although that unit
has not yet passed judgment on
the findings.
Tomorrow, the subcommittee
members plan to introduce an
omnibus bill to carry out the
new legislative proposals, not
already covered in pending bills.
The subcommittee also urged
enactment of bill, already
before the Commerce Subcom-
mittee, to authorize the utilities
commission to regulate the rate
of school children's fares and
to adjust it up to not more than
one-half of the adult fare.
The Scent pupil fare which
has been in effect under an act
of Congress since 1881, the sub
committee said, does not meet
the cost of transporting the
pupils. The regular transit pa
irons, therefore. are subsidizing
the school system, the Payne
group said. This is an unfair
burden to place on the low
income group which constitutes
the backbone of transit pa
tronage."
1t also renewed it's approval
of Senate-passed bills (now held
up in the House) for, creation
of regional commission to study
transit. bridge, highway and
other Washington area problems;
and for creation of a regional
transit control authority.
Dividend Policies Blasted.
The Payne subcommittee used
scathing words denouncing the
dividend policies followed by the
c. T. C. since it's control was
captured in 1949 by the Florida
syndicate.
It showed that dividends de-
clared since 1850 are much in
excess of net earnings and said
that while at the end of 1852
the financial structure was quite
sound there was "just cause for
future concern"
It concluded:
This subcommittee can view
the recent dividend policy of
Capital Transit Co. under the
Wolfson management only as a
course of action wholly incon-
siderate of the public interest,
wholly inconsistent with the
philosophy of fair and reason
able return to the owners of a
regulated utility, and wholly
inconsistent with the stated in
tentionS of representatives of
the Wolfson group before the
/. C. c."
The subcommittee showed that
for the nine years 1941-1949, the
company under Washington
management paid S3,720,000 in
cash dividends out of net earn
ings of $13,242,000.
Setting up sharp contrast with
what has been done under the
Wolson management, the sub
committee showed that for the
three years 1850, 1851 and 1851
cash dividends paid amounted to
S5.424,000 while net earnings
were only $3.546.000.
And for the first nine months
of 1858 the group added. cash
dividends totaled $1.152000 while
net earnings were but 1869 900.
Claim Resources Depleted.
The subcommittee found that
from 1850 to 1852 some $50
million of company property was
converted into cash by way of
depreciation charges recovered
through revenues. while only
$2.7 million was expended for
new property. Dividends were
paid from earnings of either cur
rent or prior years.
Such policies, the group held.
raised the real question" of:
Whether the management is de-
pleting the resources of the COM
pany to the point where it's
ability to render services may be
impaired. either now or in the
forseeable future.
whether at some time in the
future the management will have
stripped everything of value from
the company and then will not
be able to produce the necessary
capital to provide adequate
equipment to serve its patrons,
It pointed up this concern also
by stating:
THE general managerial atti-
tude of the Wolfson group =.
and their public statements
clearly indicate that they place
their own private financial in
terests above those of the public
in their operation of the COM
pany.
This attitude has given credi-
bility to the widespread public
belief that the Wolfson group is
milking the company prepara-
tory to dumping the system on
the Government.
Whether this is the intent
of the group the subcommittee
cannot. of course. conclusively
determine; but there are strong
indications this may be their
ultimate goal"
Law Called Imperative.
The Payne group therefore
said it deemed it imperative"
that Congress quickly pass the
bill giving the Utilities Commits
sion power to regulate and put
restraints on utilities company
dividend policies. The Com
merce Subcommittee of the SEN
ate District Committee, headed
by Senator Payne, already has
favorably reported the Beall bill
J to this end. This is modelled
after an Illinois law. A similar