Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-08-10

500. He pointed out that actual
income for May and June alone
totaled $210,385.
Considering that the months
of April, october and December
are traditionally better than
May and June, and that three
other months are not far below
those two, Mr. Falk said 1t
would be unreasonable to expect
Capital Transit to realize only
$117,1l7 in the remaining 10
months of the test year, as the
company's estimate indicates.
The effect of the long stoppage
of Capital Transit operations on
the riding habits of the public
was analysed by Mr.. Falk. He
said that he anticipates SIS per
cent decline III the number of
passengers when service resumes
This decline, in turn, will at least
reduce the operating expenses OF
the company by 3.6 per cent.
The accountant differed with
company estimates that post
strike service will be reduced
by 134,471 street car-bus hours
per year. Mr.. F'alk said that
the service cutback will total
near $4,000 hours. This, with
a related drop in maintenance
labor hours will reduce operat-
ing expenses considerably more
than the company figures, he
said.
Brings Await to His Feet
Mr.. Falk brought Company
Counsel F. G. Await to his feet
when he testified that in his
expense-revenue calculations for
the test year he does not take
into account any losses incurred
by Capital Transit during the
strike.
Wouldn't it be more realistic
to give consideration to the
strike? There's a very real diff
ference in revenue involved"
Mr.. Await declared.
Utilities Commissioner Robert
M. Weston obtained from the
witness comparisons of the total
salaries of the top executives of
transit firms of six cities as COM
pared with the pay of Capital
Transit's top echelon. Seven top
officials of Capital Transit re-
celVed annual salaries totaling
more than $4,000 in 1854, Mr..
Falk said. Among the other
cities, the total salary range was
from the Baltimore Transit Co.,
$4,000. to the Philadelphia
Transportation Co., 100000.
Mr.. Weston also inquired into
Capital Transit's purchase of
insurance from a firm with
which Louis E. Wolfson, tram
sits board chairman and prin-
cipal stakeholder, is associated
The Commissioner said he in
tends to summon Capital Transit
President j. A. B. Broadwater
to discuss not only insurance
purchases, but gasoline and oil
purchases as we'll as the COM
pany's financial affairs generally.
Earlier in yesterdays session,
Mr.. Falk presented computa-
tons showing that the COM
pany's expenses and income are
in better balance than the COM
pany contends. On the basis of
certain "adjustmentS"-to which
Capital Transit does not agree
in arriving at the value of the
company's rate base property
which ultimately determines the
size OF passenger fares.
Produces As Pet.
Mr.. Falk said that, in the last
nine years. Capital Transit has
averaged an adjusted" net
operating income Of S1.2 million
annually, on an average rate
base of $27.4 million. This, he
said, has produced an average
adjusted rate of return of as
per cent.
Unadjusted, the rate of return
has averaged 3.5 per cent, &C
cording to his figures. The COM
pany has contended its rate per-
centage has been still lower than
that. All the percentage figures
are well under the 6.25 per cent
rate Of return considered "fair
and reasonable" by the commits
sion.