Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-06-21

was in agreement with the Com
missioners on all conditions of
the franchise with the exception
that he would insist on a modi-
flcation Of Sections "a and 2b
of HR 1901. providing that these
sections would be in effect for
eight years only and that con-
version would be completed in
the same time.
Meeting With Mcdonald
At II am. on June 10. 1856,
THE Board Of Commissioners met
with Mr.. Harry A. Mcdonald,
representing the so-called Nc
Donald group which had been
negotiating for the purchase of
Capital Transit Co. stock. Mr..
Mcdonald was accompanied by
Attorneys Pehle and Luxford,
who had participated in negotia-
tons for the Bell group. Mr..
Luxford indicated that negotia-
tions with the Bell group. had
broken down and Alexander
Brown had withdrawn when it
became apparent that an invest
ling group would be required to
accept a controlling stock in
lterest and responsibility for
management of the reorganized
company. Such group was
organized by Mr.. Mcdonald and
had prepared its proposals at
the time the Capital Transit
agreement with National City
Lines was announced.
This group indicated its &C.
ceptance of the elimination of
paragraphs "a and 2b Of the
House bill. but desired some
assurance from the Public Util-
tiles Commission that the his
torical rate base would be re-
tanned until a change to an
operating ratio was made. The
group reiterated its request for
additional tax concessions after
completion of conversion and
also sought extension of CONVEX
sion to eight years. In view of
the contract between National
City Lines and Capital Transit
Co.. this group assumed that its
proposal would be considered
only if this contract were can
celled.
On the afternoon of June 10.
1856, the Commissioners met
with B. w. Franklin and other
representatives of the National
City Lines and discussed fran
chise provisions that the Com
missioners are willing to recon-
mend to Congress. These pro-
visions are essentially the same
as those that the Commissioners
were willing to recommend in
conjunction with the Bell pro-
posal. The representatives Of
the National City Lines asked
for time to consider these pro-
visions. They will advise the
Commissioners when they desire
a further conference.
| At 9 am. June 20, 1856. the
Commissioners. met with Messrs,
Chalk. E. F. and D. C. Collady
and M. Fox to further discuss the
provisions of a franchise that the
Commissioners would recon-
mend to Congress. Mr.. Chalk
stated that he would accept the
franchise as recommended by
the Commissioners provided that
he could obtain the assurance of
the Public Utilities Commission
that the rate base would be not
less than $18 million, and the
rate Of return not less than 6la
per cent.
When the Commissioners ini-
tiated negotiations with the Bell
group on May 80 they did so in
good faith and with high hopes
of continuing the operation of
Capital Transit Co. under condi-
lions that would be satisfactory
to management, stockholders
and the public. AS indicated
above the Commissioners. to-
gether with the Public Utilities
Commission and their respective
stats. worked assiduously and
continuously to develop with the
Bell group a franchise to recon-
mend to Congress that would
have been acceptable to a reor-
ganized Capital Transit Co. and
at the same time protective of
the public interest.
Negotiations Time Extended
! In order to exhaust every pos
sibility OF developing a firm
proposition to present to Con-
gress that would retain the
operation Of mass transporta-
ton in the District of Columbia
and in certain contiguous areas
in the hands of private owner
ship, the Commissioners, with
the concurrence of Senator Nc
Namara and Representative
Harris, extended the time of
negotiations. Whether or not
the Bell plan could have been