Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-03-04

| FOLLOWING is the statement G
yesterday by the District Publ
In carrying out its duties relat-
ing to the regulation Of the
transit system in the District OF
Columbia, the Public Utilities
Commission has sought at all
times to keep the public fully in
formed as to its decisions and the
reasons for making these deci-
isions. We have, however, avoided
engaging in any public contro-
versy or public debate on the is
'Isues. We have generally confined
ourselves to the official actions
which we were required to take
and the official recommendations
which we were called upon to
make to the Board of Commits
sioners or to the Congress.
At the present time. however,
it appears to us that there is a
calculated campaign by special
interests to create public confu-
sion and thereby to subvert the
public interest. While the self
Interest of these advocates may
be clearly apparent to the pub
ilic, it appears to us that the pub
Ilic is entitled at this time to a
clear statement of the issues in
Ivolved. We. as the official body
charged with protecting the pub
lie interest and with having the
full technical knowledge of the
issues involved. have a clear pub
Tic obligation to speak.
The central issue today relates
to the street railway system of
the Capital Transit Co. At the
present time, the company faces
the liquidation of its properties
on August Is, pursuant to Public
Law 389 of the 84th Congress.
The present deep concern of
the management is to realize the
most that it can get for its street
railway properties. These prop
critics on August IA, 1856. will be
carried on the books of the COM
pany at value of approximately
$11 million. This is also the APP
proximate cost of removing rails
and restoring pavements.
Net Value Could Be Nil
Therefore, if the salvage value
of rail property equals its book
value, the net market value of
the street railway properties. in
Guiding the obligation for re-
moving rails and restoring the
streets, would be nil. To the
extent that the salvage value of
the property is less than book
value, the rail properties would
have a minus value.
/ It is apparent that the Capt.
tai Transit Co. stands to gain
about $11 million if it can sell
the street railway system to the
successor operator at book value
and concurrently transfer it's re-
sponSibility for removing the
rails and restoring the streets.
Now consider the value of the
street railway system to a new
! franchise holder. In a negotiated
purchase of franchise rights, the
buyer is normally required to
take over all properties with the
franchise. In Washington, how
ever, the new franchise holder,
whether it be a private corpora
! ton or public body, receives its
rights directly from the Govern
Iment and has no obligation to
deal with the former franchise
holder.
! Thus, the only proper consid-
Grafton for the new operator in
buying property from any source
is the value of this property in
the new system. 1t is public
knowledge that this commission
has not required any private ap-
plicant to buy any part of the
existing properties; and there
would appear to be no justifica-
ton for imposing any such OBJ
legation on a public body.
Not Desirable Property
1t is further apparent that a
street railway system is not a
desirable property for a new sys-
TEN to acquire. Street railways
are not being built for urban
systems and have not been built
for years. The operating costs
are so high and the salvage
operation is so costly that a new
operator is financially compelled
to refuse these rail properties
unless full allowance for in
creased operating costs, as well
as conversion costs, is made in
the purchase price.
At the present moment, the
Congress has before it proposed
Legislation which was transmitted
by the Board of Commissioners
of the District of Columbia on
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