Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-04-14
Details Drafted
After Accord on
CTC Operation
Subcommittee Plan
To Restore Company
Franchise in Works
BY HECTOR MCLEAN

Final details of a deal to keep
the Capital Transit Co. in bust
ness were being worked OUT on
the House side Of Capitol Hill
today.
Agreement on the overall terms
was announced late yesterday by
Chairman Harris of the House
Commerce subcommittee han
ding Washington transit crisis.
This came only one day after a
Senate District subcommittee APP
proved a bill to have a public
authority take over the transit
system. Under present legiSla-
ton. passed during last summers
52-day transit strike, Capital
Transit'S charter and franchise
will die at midnight August IA.
In its major outlines, the deal
would give CTC exemption from
two District taxes gross receipts
and motor vehicle fueD which
last year cost the company $780,
AIT out Of the total of $939,9l2
it paid to the city, and from costs
of helping the city clear streets
OF snow.
Still Under Commission
And. despite contrary requests
by the company, the deal would
leave CTC under full regulatory
control by the District Public
Utilities Commission. but would
require the commission to decide
within 80 days on any applica-
ton for an increase in streetcar
and bus fares. In the past the
commission has taken as long as
ii months to decide such cases.
Also. the deal is designed to
provide an opportunity for the
company 10 earn up to 6 Il per
cent on its rate base" and would
freeze existing fares for at least
one year.
The subcommittee proposed
bill, final language for which
is being drafted today. also would
End several quarrels caused by the
thrce-year feud between the
utilities commission and the COM
pany.
II would settle-in the COM
pany's favor-a utilities commits
sion contention that the $40 mil
lion CTC rate base is S2.4 million
too high because of a shortage in
its depreciation account.
Fluctuating Figure
The rate base, upon which the
company's rate of return is COM
puted, is dollar valuation of the
original cost of the firms in
vestment in property used and
useful in public service. minus
depreciation. 1t changes con-
stantly as buses and streetcars
are purchased or retired. The
bill would write into law as a
base figure the valuation of
slightly more than $50 million
which existed last summer.
The measure also would freeze
the depreciation rate on existing
property at the level OF last July
81, thereby blocking any move by
the utilities commission to write
of as worthless the companys
streetcars. This was suggested
last summer by Public Utilities
Commissioner Robert NJ. Weston.
The depreciation rate on new
property would be set. as usual,
by the commission.
The deal also would save the
streetcars for the present, reouir-
ing that the company program
OF conversion of street railway
system to buses be in conformity
with economic conditions, as laid
out in the Gilman plan, prepared
at the instigation of the COM
pany."
The w. c. Gilman Co. recon-
mended seven-year conversion
program. The utilities commits
sion and the District Commits
sloners have sought to make the
conversion Immediately next
August IA by bringing in a new
sll-bus company, thus avoiding
the cost of buying the CTC
streetcar system.
Final language OF the proposed
franchise bill must be accepted
both by the subcommittee, which
may do so early next week. and
by the company's board of di-
rcctorS, These, however, arc re-