Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-07-08
Sale Contract
For CTC Signed
After 10 Hours
Sessions Resulting
In Purchase Accord
Run Around Clock
By HECTOR Mclean

A formal contract for the sale
of Capital Transit Co. was signed
at 1924 am. today.
The document was signed
after a 16-hour drafting session
with seven lawyers by etc
President j. A. B. Broadwater
and o. Roy Chalk. wealthy New
York real estate owner and presi-
dent of Trans-Caribbean Air.
ways, Inc.
After working throughout the
day without lunch, they recessed
for dinner and afterward re-
sumed work.
A spokesman said the legal
battery concentrated on the de-
tails of the document rather than
any major questions.
Stockholders Must Okay 1t
The contract is subject to ap-
proval by holders of two-thirds
of CTC stock and to granting by
Congress of a franchise salts
factory to Mr.. Chalk. A special
etc stockholders meeting has
been called for August 3, and
House and Senate conferees will
meet at 2:30 pm. tomorrow to
consider proposed franchise
terms.
AS agreed upon a week ago,
the contract calls for Mr.. Chalk
to buy out CTC's assets and as
sumo its liabilities for $13.543.-
900. OF this. sos million would
be paid Immediately. while the
balance of $3.943.000 would be
paid over is years at five per cent
interest, secured by the real es-
tate now owned by etc.
Yesterdays and this mornings
legal marathon was held in the
offices of etc General Counsel
Edmund L. Jones. On hand were
Mr.. Chalk and his associate,
Morris Fox, president of a local
trucking company, with five
lawyers. They were Emil Rogers,
general counsel of Trans Carib-
bean; Harvey M. Spear, legis-
lative counsel of the new operat-
ing firm Mr.. Chalk plans to set
up; Theodore I. Seamon, and
Edward F. and D. C. Colladay.
attorneys for Mr.. Fox, who were
instrumental in initial negotia-
tons with etc.
Representing etc were Mr..
Broadwater and vice president
E. c. Giddings. with two lawyers,
MIR. Jones and Joseph M. Click
stein.
The Chalk-Fox group has an
nounced plans to set up a new
company, named D. c. Transit
System. Inc. to operate the
buses and streetcars being pur-
chased from CTC. Articles of
incorporation have not yet been
filed.
Similar to House Bill
Terms of the proposed fran
chise for D. C. Transit System
are notifications of the pro-
posals approved several months
ago by the House in a bill to
restore the etc franchise.
Highlights of the proposal call
for a 20-year franchise, a one
year freeze on present transit
fares. relief from the District
gross receipts tax (Which has
cost etc more than 100000
a year. and conditional relief
from the city's 6-cent-a-gal-
lon gasoline tax to the extent
that the company fails to earn
a return of six and one half per
cent.
The franchise draft says the
company should be entitled to
earn a fair return and that I'M
der present circumstances a
return of six and one half per
cent on either the company's
rate base without stipulation
of how much that shall be- or
on annual gross operating re-
venues would be not unreason-
able.
The franchise also calls for
conversion to an all bus opera
ton within seven years, after
which the company would be
eligible for conditional exemp-
ton from the real estate tax. II
also relieves the company OF
liability for helping clear the
streets of Snow