Evening star., 1955-07-17
By HECTOR MCLEAN


Transit and the District Public
Utilities Commission which
erupted along with Washing
toms bus and trolley strike has
been building up for q long
time.
Now, the company flatly
blames p. q. c. for the strike
and says It's up to that agency
to end 1t.
While this Is probably q
louder explosion than has oc-
eurred elsewhere, the conflict
n general throughout the
country between regulatory
commissions and privately
ewned transit companies.
Repeatedly, the transit in
dustry has complained against
the regulatory lag"-the gap
between rises in costs and ap-
proval Of rate increases justi-
fied by these costs.
Here in Washington, Capital
Transit officials are vitriolic
against two commission mem
bers In particular. Robert E.
Mclaughlin (recently ap-
pointed . District Commis-
sioner) and Robert M. Weston,
who still is on the P. U. c.
The commission itself is
composed of three men. Two
are civilians appointed by the
President, the third is the
Engineer Commissioner Of the
District.
chonee Of Attitude
Until the Eisenhower ad-
ministration took office. the
p. u. c. was dominated by
Democratic appointees, Chair
man James H. Flanagan, who
had been named by President
Roosevelt, and Kenneth w.
Spencer, q veteran District
employe named by President
Truman in 1850.
Even though Capital Transit
finally hired Mr.. Flanagan to
be its controller and q vice
president, the company was
not happy with the commits
sion which he headed.
Early In 1852. for example,
Capital Transit President j. A.
B. Broadwater loosed the first
of his many blasts at the COM
mission and regulatory delays.
along with the warning that
unless the company was al
lowed to earn a fair rate OF
return 1t would soon wind up
on the public payroll. He also
complained that he couldn't
understand why the Flanagan
commission had cut the al
lowed rate from rs to CTS
percent.
After the election Of Presi-
dent Eisenhower, though.
things began to get really
rough for transit. Mr.. Flana-
gan, under fire from the COM
pany for being too strict and
from congressional critics for
being too lenient in a period
when the company was declar-
ing fat dividends from past
earnings. decided his days
were numbered under the Ell
senhower administration. Get
ting an offer Of Q job at higher
pay from the transit company.
he announced he would &C
cept and turned in his resig-
nation from the p. q. c.
He was replaced by Mr.. Nc
lAughlin, an ardent cam
paigner for Mr.. Eisenhower In
the District prediction cam
peign and q man who by no
means could be accused Of
partiality toward Capital
Transit.
Shortly thereafter. Mr..
Spencer quit, too, for a job In
private industry; figuring he
didn't stand q chance Of re-
appointment when his term
ran out In O month or 50.
Enter Mr.. Weston
He, in turn, was replaced
by another Eisenhower sup
porter, Mr.. Weston, q Nc
Laughlin candidate. Taking
ONCE during q period when
Capital Transit had been sky
rocketing its rate Of dividend
payments and thus the mar
ket price of its stock. he said
In an inaugural speech that
"public utilities securities
should not be the subject Of
stock market speculation or
sharp fluctuations in price.
IF the utility in question
is soundly financed. operated
and regulated, its securities
win be good long-term invest
ments as typically legals' for
widows and orphans-not
speculative items"
The speech was generally
construed as a fiat warning to
Capital Transit and Louis E.
wolfson, the Florida multi
millionaire who had bought
control IN l949.
In any event, the new utifi-
ties commission was funda-
mentally at variance with Mr..
Wolfson's stanchly held views
on the rewards to which risk
capital Is entitled under q
profit-motivated, private en-
terprise system Of capitalism,
at least in the company view.
It was this difference, per-
haps. that led to the recent
Appeals Court decision order
ing the p. u. c. to explain
what method It used In setting
the company's current rates o