Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-02-26


q two-pronged attack directed
both at the company's decision
to recall more than So million
in outstanding bonds and also
to declare the latest of a series
of 40-cents-per-Shar quarterly
dividends of transit stock.
Mr.. Mclaughlin said the COM
missions decision in the case
was unanimous with all three
members voting.
Transit President j. A. B.
Broadwater announced the COM
pany'S action yesterday.
Mr.. Mclaughlin said the COM
mission will try to prepare the
necessary court papers either to-
day or tomorrow.
The commission counsel, Lloyd
B. Harrison, was instructed to
draft q preliminary injunction
petition to present to U. S. Dis
trict Court for the District Of
Columbia. Mr.. Harrison also
will prepare a formal investiga-
ton order for the commission
itself.
Speed Required.
Speedy action is necessary,
Mr.. Mclaughlin explained, since
the transit bonds are due to be
called in ON Monday.
MI Mclaughlin gave as the
commissions reason for taking
legal action that I'VE feel the
company's action (recailing its
outstanding bonds) put it in a
cash position which endangers
the ability of the company to
serve the public.
In the Public Utilities Act of
1913 Congress delegated this
authority to this commission to
see that the community is rem
dered adequate service"
The commission went into
emergency session yesterday
afternoon Immediately on hear
ing Mr.. Broadwater's announce
ment. Chairman Mclaughlin
and Robert M. Weston. the Sec
ond civilian member of the COM
mission, held further meetings
with their staff and Capitol Hill
aides for four hours last night.
Having arrived at no decision
by 1880 pm. the civilian COM
missioners. joined by the third
member. District Engineer Com
missioner Louis w. Prentiss, re-
sumed their staff discussions at
$3.50 o'clock this morning.
Announcement Issued.
It was nearly / pm. before
this session broke up with Chair
man Mclaughlin handing a
one-Sentence statement to the
press. This announcement read !:
1.-THE commission has decided
to take appropriate action with
respect to the Capital Transit
Co.'S recent dividend declara-
ton and the call Of its outstand-
ing bonds, and has instructed
its counsel to take necessary
steps,"
Mr.. Mclaughlin subsequently
explained that the statement
meant the commission would 60
to court.
He added also that with the
undertaking of legal steps, the
commission will order Capital
Transit to stay its announced
decision to call in the bonds and
declare a new dividend. It was
uncertain at this stage the exact
relationship between such a stay
order and the contemplated
court action.
E. Cleveland Giddings, vice
president of the transit firm, said
the company has no comment on
the commissions proposed move.
The two civilian commission
ers reacted yesterday with
obvious alarm and irritation over
first news Of the company's de-
cision to guarantee continued
healthy dividends in 1854 by
paying of outstanding bonds.
The Capital Transit announce
ment came as salt rubbed into
wounds made by the company's
earlier declaration that the COM
mission has fallen fiat on its
face" with its forecast Of greater
revenues through the latest fare
increase.
Chairman Payne Of the Senate
special subcommittee Investigate
ing District transit problems.
(See TRANSIT. Page A-3.)
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