Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-06-22
DC. Heads OK
Mcdonald Bid
For Transit
Action Reverses
Prior Stcnd for
Public Authority
By HECTOR MCLEAN

The District Commissioners to-
day sent Congress a new
statement on the Washington
transit crisis announcing that
one Of three prospective buyers
Of Capital Transit Co. had
shifted to an acceptable position
on franchise demands.
The disclosure came only seven
hours after the city heads had
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Text Of District Report to Transit Con-
ferees. Poge A-l0
told House and Senate conferees.
who must decide on a solution
of the transit muddle. that the
only hope Of continued bus and
streetcar service after Capital
Transit goes out of business next
August IA is in establishment of
a public authority to take over
the system.
At the time, they ruled out as
unacceptable the franchise terms
sought by National City Lines,
Inc, nationwide transit holding
company, which last Friday
signed an agreement to buy all
the properties of etc and set up
a new operating company. They
also said the National City Lines
deal apparently precluded either
of the other two bidders from
completing negotiations.
Talk to Mcdonald
During the afternoon, how
ever, the Commissioners con-
ferred for more than two hours
with representatives of the group
headed by Harry A. Mcdonald.
former head Of the Securities
and Exchange Commission and
of the Reconstruction Finance
Corporation under President
Truman.
Afterwards. Robert 3. Nc
Laughlin, president of the Board
of Commissioners, said the city
heads had agreed to a modified
form of the Mcdonald franchise
proposal and would so notify the
confereeS today.
This left the Mcdonald group
standing by" to see If anything
might upset the National City
Lines deal and give them a clear
track to negotiate with etc. The
National City deal has two ma
jor conditions-granting by Com
gress of a franchise acceptable
to the company and acceptance
of the purchase terms by holders
of two-thirds Of CTC's $50. 900
shares of stock.
The Mcdonald proposition
calls for purchase Of etc stock,
unlike the other two proposals,
which are to buy all the COM
pany's assets and liabilities,
leaving Capital Transit a COR
porate shell.
Members of the group stressed
today that their proposal gave
the stockholders the choice Of
retaining their stock or selling
at the terms offered. Both APP
proaches require stakeholder APP
proval. which would take about
80 days.
National Lines Firm
B. w. Franklin, vice president
of National City Lines and its
chief negotiator here. indicated
the Commissioners statement on
the Mcdonald bid had not af-
fected his company's position.
80 far as / know, Mr.. Nc
Donald has no agreement with
Capital Transit" Mr.. Franklin
said. I'VE have an agreement
with Capital Transit. We are
going ahead with our dealings
with Congress for a franchise.
It's up to Congress to vote a
franchise"
Mr.. Franklin said he had been
visiting on the Hill and talking
with members of Congress and
explaining his company's plans.
He said he had had an agreeable
reception.
He was asked to comment on
the Commissioners expressed
fears that the time necessary
to carry out the National City
Lines-Capital Transit deal would
leave the city without any trans
it service at least for a while
after August IA. He saw no big
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