Evening star., 1955-07-10
DISTRICT:
Cun Trunsit
Pay Cost of
Wage Boost?
DISTRICT:
By HECTOR MCLEAN


As the strike drags on,
transit riders are asking how
much O settlement would cost,
and whether the Capital Tran
sit Co. could stand it. Here are
some of the factors that have
to be taken into considera-
ton.
/. What are the eompany's
estimated earnings for the
past year? What return do
thes~ earnings make on the
valuation set by the District
Public Utilities Commission?
In testimony before the
utilities com mission last
month, the company said its
net income for the year which
ended last April 80 was $685.
797. This figure includes non.
regulated items. Earnings on
the regulated portion gave the
company q net operating in
come of $657, 1892 for SYSTEM
wide operation. The company
calculated that this was equal
to 2.s5 per cent of its rate
base" which is q dollar valua-
ton Of the company's invest
ment In buses. streetcars.
tracks and other properties
used in serving the public.
2. What does the company
estimate rs the cost of the
union demands? What does
the union estimate rs the cost?
The company's estimate is
81 million q year. The union
says it doubts the accuracy Of
this figure. but will make no
estimate Of its own on the
grounds that 1t lacks access to
company information upon
which the figure was based.
Also. the union points out. its
demands are initial ones and
are "bargainable.'
3. What would be the cost to
the company. on the basis Of
present fares, II it granted half
the union demands? How
much return would the COM
pany have left for its stock
holders?
Taking the company's esti-
mate of 81 million, half would
be $3.5 million-five times the
profits for the year as reported
to the utilities commission.
If all the profits were given
to the workers. it would repre-
sent only about 10 per cent of
the initial bargaining de-
mands.
4. What are the estimated
increases in company revenue
that would accrue: (a) From
House and Senate bills to in
crease school fares; (b) From
abandoning the city tax. ON
gross receipts; (c) From grant,
ing the company's request for
higher fares?
(a) The bills would permit
the utilities commission to in
crease school fares from three
cents to half the adult fare.
II the fare were doubled, the
boost to the company's rev.
enues is estimated by the COM
pany at no more than $3.50, 900
after taxes.
(b) Exempting Capital
Transit from the District gross
receipts tax would cost the
city about $480.0O0 a year.
After other taxes, this could
increase company revenues
about $250,000. Capital Trans
1t estimates.
(c) The company has asked
the Utilities Commission to let
1t abandon the weekly 75-cent
permit. with which passengers
travel for 10 cents a ride. and
to increase the cost Of tokens
from Is to 10 cents Give for
95 cents). The 20-cent cash
fare would continue un-
changed.
If this is granted, the COM
pany testified. 1t expects to
have a net operating income of
$l.340.435 in the coming year
on its operations in the Dis
trict. 1t said this return would
equal 6.86 per cent Of its rate
base. If the utilities commits
sion accepts the company's
$l9,550,972 estimate of the rate
base. II the commission cuts
the rate base by $2.4 million to
Offset alleged shortages in the
company's depreciation ac-
count. the rate Of return figure
would automatically go up to
~ per cent.
Adding all these revenue in
creases would indicate a sur
plus of 81 740,4 ,435. II all of this
were given to the workers
leaving nothing for the stock