Evening star., 1955-07-18

l1949, the company had In casl
l$2.734.e68. and marketable Sc
Icurities Of $4,006,3 ,353. or a tota
Iof cash and marketable securi
tiles Of $6.740.241. On May 81
1885, the company had cash o
So, ,663, ,025 tbut no marketahl
Isecurities), which shows q re
Iduction between the aforesai'
dates in cash and inarketabl
securities Of $4.077.2l6.
i The annual dividend rate a
the time the Wolfsons boush
control was 81 per share. i
1850 dividends were paid at tn
/ rate Of So per share, In 1851 81
lin 1882 $3.50 including q spe
lcial dividend Of SO, in 1888 $6.4
and in 1854 1902, including
dividend in kind of $1.22 pc
lshare. These figures are beforI
the 4-to-1 stock split. Thes
increases in dividends are il
sharp contrast to the continuou
decrease in earnings from $50
Iper share in 1851 to $40 il
1852. to 81 in 1858. to 1884 u
1854.
| Between September. 1949, ami
May 81, 1855. under the presen
management Of Capital Transi
Co., dividends have been paid il
cash in the amount Of SO, ,808, ,000
There was also a distribution il
kind with a total book value O
I$518.330. The total amount
therefore, Of cash dividends ant
distribution in kind, treating
the distributions in kind at tn,
stated book value, amounts Il
So. .326, $3.50. Stated In anothe,
way. this amounts to 1886 PEE
share on the basis Of the sharei
before the split Of the stock b!
the present management.
Four Fare Increases
| During the years from 1914!
to 1854 the company was granted
four fare increases by the Public
Utilities Commission.
Primarily because of the poll.
cies pursued by the Capita
Transit Co. after the. Wolfsor
interests acquired control, thu
Senate on July %, 1858, passed
a resolution ordering a complet.
investigation Of public trans.
portation in the District Of Co.
lumbia. The investigation wa.
made BY a subcommittee headed
by Senator Frederick g. Payne
/ This subcommittee, after {
complete investigation of publ,
Transportation serving the Dis.
trict of Columbia, in its repor
(Senate Report No. 1874 of tn,
83d Congress, I'd SESSION. said
in reference to Capital Transit
Co., on pages 80 and 40:
THE real question which arise.
out of the present dividend policy
is whether management is de.
lpleting the resources of the com.
pany to the point where it.
ability to render service may b,
impaired either now or in tn,
foreseeable future; whether al
some time in the future thu
management will have stripped
everything of value from thu
company and will then not b.
able to produce the necessar,
capital to provide adequate equip
ment to serve it's patrons.
1 View on Dividend Policy
On Page II of that report, tn,
committee said it views tn,
transit company's recent dividen,
policy under the Wolfson man
agement:
"As a course of action who'll,
inconsiderate of the public inter
est, wholly inconsistent with tn,
philosophy of fair and REASONABLE,
return to the owners of a regu.
lated utility, and wholly incon
sistent with the stated intention,
Iof representatives Of the Wolfso,
group before the ICC."
Under Chapter VII, Genera
Management Policies of Capita
Transit Co.." the Senat,
subcommittee concluded will
this paragraph:
"This general managerial at,
titude Of the Wolfson group to
ward the problems previousl,
discussed in this section ans
their public statements clearl.
indicate that they place thei,
own private financial interest
above those of the public in theil
operation of Capital Transit Co
This attitude has given credi
lbility to the widespread publ,
belief that the Wolfson group !,
milking the Capital Transit Co
preparatory to dumping thu
system on the Government
Whether this is the intent O
the group the subcommittee can
not, of course. conclusively dc
termine: but there are stronl
indications that this well ma,
be their ultimate goal"
Profit Before Service
i There have been other indica
tions Of an attitude on the par
of the present management O
1.-THE Capital Transit Co., whicl
!, place private benefit and prof
J, ahead of the paramount puhli
Interest in the operation O
property devoted to public serv
lice.
Mr.. Wolfson, chairman Of tn,
board Of directors, testified unde
oath before the Public Utilitie
Commission in that body's inves
|tigation of current financia
practices and position of tn
! company (formal case No. 433
on April 6. 1854, that In an In
| sslterview with Mr.. Richard Fryk
! lund, which appeared in tn
Sunday Star Of March 20. 1854
he had stated as follows: ~~
II have a responsibility to Sc
! that the stockholders of Capita