Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-06-17
Continued From First Page


pay So million down. while Ma
tional City agreed to make a
down payment of Sc, 100000.
Both propositions would spread
the balance over Is years. Ma
tional City plans to provide this
by giving etc $6,72O,OO0 of its
l5-year sinking fund debentures,
secured by all assets of the new
company Mr.. Chalk would pay
of his $5.440,000 balance by
giving etc mortgage bonds Sc
cured by real estate of his new
company These bonds, under
yesterdays boost in the interest
rate, would pay S per cent a year.
Mr.. Colladay insisted the
Chalk proposal might be more
attractive to Louis E. Wolfson,
CTC controlling stakeholder
than the National City deal be-
cause it would provide more i'm
mediate cash.
And, he said. he had been told
by j. A. B. Broadwater, etc
president, that Mr.. Wolfson had
not known of the National City
deal until Mr.. Broadwater
phoned Mr.. Wolfson and said,
Boss, I've Just sold your COM
pany to National City"
Franchise a Vital Factor
a more practical hope Of up
setting the National City Lines
deal appeared to lie in the prob
lem Of congressional enactment
OF a franchise satisfactory to the
giant transit holding company.
The desired terms were set
forth in the etc sale agreement.
They called for tax relief and
changes in Public Utilities Com
mission regulatory procedures in
q bill passed recently by the
House to restore the etc fran
chise.
Several provisions of this
measure already have drawn the
fire of the Commissioners.
In addition. however, National
City asked that the fares of its
new company be set on an
operating ratio" formula, under
which its earnings would be
calculated as the difference be-
tween gross operating revenues
and gross operating expenses
plus taxes, license fees and in
terest,
1879 Earnings Sought
NCL also proposed that earn \
ings of 10 per cent of its gross 1
operating revenues be declared
as a matter of legislative de-
termination to be the fair and
reasonable return which the new
company shall be afforded the
opportunity OF earning"
Mr.. Mclaughlin branded this \
as unacceptable, and said an al \
lowance of 6 or 2 per cent earn \
ings would be liberal" The
Commissioners at one time pro-
posed return of 6l2Go per cent \
for another applicant. He also
complained that under this pro-
posal the company would calcu- \
late income taxes as expenses. 4
rather than paying them out of I
profit.
Also. he assailed a provision
which would relieve the new COM
pany of paying for repaving md
track removal when it converts
streetcar lines to bus operation.
Under present legislation. Capital
Transit would have to pay the
whole cost of this, estimated att
from SO million to Sill million.
In some cities, such costs are split \
half and half between the local I
government and the company.
Depreciation Plan Questioned
Mr.. Mclaughlin also took issue
with language covering provis-
ions for calculating depreciation
on transit equipment.
He refused to speculate whether
any agreement might be reached |
Tuesday on these issues between
the Commissioners and National
City Lines officials.
Mr.. Chalk and Mr.. Fox. how
ever, insist they ar Elm virtual
agreement with the Commits
sioners on franchise conditions
They hope to get the support of
the city heads in report which
the Commissioners plan to make
wednesday to House and Senate
conferees on the transit crisis.
They also hope for support
or at least the absence of oppose
ton - from the local transit
workers union. Insisting that he
is planning for harmonious labor
relations. Mr.. Fox reissued a press
release on the subject of last
March Is.
1t said Mr.. Fox's group will
accept impartial and binding