Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-05-29
BELL Will Meet
ID. {. Heads on
Transit Plan
Guarantee Of Sale
By WoIfson Sought
On New Furnchise
BY HECTOR MCLEAN

The District Commissioners
will meet at 10 am. tomorrow
with Daniel w. Bell, president
of the American Security &
Trust Co.. in an attempt to solve
the Washington transit crisis.
This was announced today by
Robert E. Mclaughlin, president
lof the Board of Commissioners.
after an executive session be-
tween the Commissioners and
the District Public Utilities Com
mission.
Mr.. Mclaughlin said the Me-
mortal Day meeting with Mr..
Bell will be an exploratory ses-
sion to see if there is some way
of solving a king-Size financial
variation of the age-old problem
of which comes first, the
chicken or the egg"
Mr.. Bell today was trying to
figure out how to carry out con-
Igressional prodding to persuade
Louis E. Wolfson, controlling
stakeholder of Capital Transit, to
guarantee that Mr.. Wolfson will
sell his interest in the company
Iif Congress should restore the
dying etc franchise.
Firm Proposal" Asked
The situation developed yes
Iterday when House and Senate
conferees discussed two widely
divergent solutions to the transit
crisis for an hour and 20 minutes
and announced they had agreed
That we advise the District
of Columbia Commissioners and
others interested in private oper-
alton to get together in an effort
to work out a firm proposal and
report back to the conference
committee at the earliest pos
sible date"
Explaining the statement,
Senator Mcnamara, Democrat
of Michigan, chairman of the
conference committee, said the
conferees had agreed to recon-
mend giving back the franchise
to etc If the firm proposal
is satisfactory.
This was echoed by Repre-
sentative Harris, Democrat of
Arkansas. chairman of the House
Commerce subcommittee which
drafted a franchise restoration
bill passed by the House.
Buy and Retire Wolfson Stock
Mr.. Bell has suggested that
the company should buy out and
retire the stock of Mr.. Wolfson,
thus reducing a 960,000-share
company to one of about 100000.
The company would raise the
money for this by borrowing be-
tween SIS million and Sc million
on its own real estate through
! a mortgage bond issue.
The bonds would be sold. for
a fee. by Alex. Brown g. Sons,
an old line investment banking
house. Also, to meet Mr.. Wolf
sons stipulation that all other
stockholders must be offered the
same deal, Alex. Brown & Sons
would offer to buy-at the same
price paid Mr.. Wolfson-all the
shares any other stakeholder
wanted to unload. These they
would attempt to resell to the
general public.
Defining a firm proposal" Mr.
Harris said. THE best thing
would be a contract between the
Bell group and the underwriters
and Wolfson on price-on condi-
ton that the franchise was re-
stored"
Price Agreement Needed
The conferees' decision, he
said, was virtual assurance
that the franchise would be re-
stored if the conditions were
met. Another committee source
called the assurance "about as
firm as they can get"
/ Mr.. Bell declared, "We1l look
at it and see what we can do. >
But. he warned, the procedure
would require an agreement on
price for sale of the Wolfson
stock. Then. if something
should go wrong" he said. "they
could say to Wolfson that's what
we are going to pay you" under
a condemnation suit.
\ The Senate-passed bill would
set up a publicly owned WASH
ington Metropolitan Transit
Authority to take over the
system with broad powers to
condemn etc property.
I Mr.. Belt has pointed out his
proposal would require the sale
See TRANSIT, Page "A
VLH