Evening star., 1955-06-22

|0fficer Testifies
Boost Would Neon
Annual Increase
OF ST. Million
The Capital Transit Cos
proposed increase in fares woulc
Ilet the company earn a return
of 6.86 per cent on its invest.
ment in Washington properties
serving the publican increase
of $2.1 million annually.
This was the contention o1
Vice President James H
Flanagan who also is controller
of CTC, as public hearings before
the District Public Utilities Com
mission went into their second
day today in the District Build
ing Board Room.
The firm is seeking to abandon
its weekly pass and to increase
the cost of its tokens from the
rate of 16 cents each to 19
cents-flve for 80 cents to five
for 95 cents,
In the year ended last April
80, Mr.. Flanagan testified yeSter-
day, the company earned a 3.3
per cent rate of return on its
District operations-and only 2.a
per cent on all its operations.
If conditions continue with
out a rate increase, he declared
the company will earn only 2.1s
per cent in the District and 1.5t
per cent overall next year. This
compares to a figure Of some
l61a per cent which the Public
Utilities Commission has saic
would be "fair and reasonable
for the company.
Wage Demands in Offing
Unspoken at the hearing was
a union demand for higher wages
land better working conditions
which could blow the company's
estimate of its future costs into
the proverbial cooked hat.
The present union contract
expires June 80 and is generally
expected to trigger what could
be a long and bitter strike, with
the company refusing to grant
any of its workers demands un-
It'll it is assured of a higher in
come.
Yesterday the company pound.
ed hard at charges that re-
Ipeated fare increases since the
close of World War II have
reached the point of diminishing
returns.
Even without an increase, ac-
jcording to r. Gilman Smith
New York consulting engineer
the company will lose IT million
of it's riders-5.46 per cent-in
the year ending next April 80
This. he testified. is normal
Idecline"-which averages Z pei
cent acknowledgement by in
creasing use of the automobile
Itelevision, suburban shopping
lcenters and other forces. The
revenue decline, he said, will be
4.84 per cent.
If the rate increase is granted
he indicated, the company will
lose SIS million more riders. or q
total of 1872 million. However
Mr.. Smith insisted, this drop ir
riders will be offset by revenue
increase of 9.41 per cent, rather
than by a loss which would indi.
cate diminishing returns.
Permit Returns Cited
Mr.. Smith also testified thai
the 75-cent weekly permit. which
lets passengers travel for 10 cent
la ride, has produced 40 cent
less on the average than wa
estimated by the commission wit
ness who suggested it, Edward A
Roberts, New York consultant.
! The permit replaced the COM
Ipany's $2.40 weekly pass at tht
beginning of 1854.
Under questioning by Com
missioner Robert M. Weston, Mr.
Smith conceded several larg'
cities are converting to zone far
systems, such as those used il
the Maryland suburbs of Wash
ington. He declined, however. tt
agree with Mr.. Weston that 81
lis a modern tendency" and ;
mark of true progressive tran
sit companies" And. he said
the use of zone fares must "b'
ftteo TO a given community.
The commission turned dowI
repeated efforts by Attorne!
!, George Spiegel, representing th'
Citizens Transit improvement
Association, to obtain status II
the hearing as an "intervenor'
which would give him the righ
Ito crosS-exanine witnesses.
i Commission Chairman George
IE. C. Hayes said Mr.. Spiegel's
petition had failed to present
lanything new which woulc
Justify a decision in his favor
The commission also rejected
two motions by Mr.. Spiegel tt
suspend the hearings. The body
did rule, however, that he-ane
Iany other interested party-may
participate subject to commits.
sion rulings.
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