Evening star. [volume] (Washington, D.C.) 1854-1972, 1963-04-21
Board of Trade
Supports Area
Rail System
BY LEE FLOR
Star staff Writer

bonds would be needed to fl
nance a Washington-area rail
transit system through a "pri-
vate loan" plan, it was dis
closed yesterday.
President Kennedy was told
last January that federal guar
antees would be needed for
$3.50 million in bonds. The
Treasury Departments opposi-
ton to direct loans for con-
struction apparently changed
this to $73l million in federally
guaranteed bonds.
The disclosure of the new fl
nancing plan came as the
Metropolitan Washington Board
of Trade announced its support
for a rail rapid transit system.
The National Capital Trans
portation Agency was COM
by the Board for at
tempting to provide a rapid
system that would be self-sup-
porting" the Board said.
IF it should develop later
that a subsidy is necessary to
support such a system. this
consideration should not be al
lowed to delay its conStruc-
ton" the board said.
Kennedy Plan Delayed
In other transportation de-
velopments. it was announced
that President Kennedy'S rec
concentrations to Congress on
a transit system would be de-
layed at least another week"
The change in financing may
have something to do with the
delay. The message was eX-
pected last week, but the Treas
ury Departments position was
disclosed lat Tueday.
A White House spokesman
said the transportation mes
sage was delayed, but he was
unable to explain why.
The discarded financing plan
called for the $3.50 million in
guaranteed bonds to be issued
in 20-year bonds between 1871
and 1874.
The new financing plan
under consideration calls for
40-year bonds to be issued be-
tween 1866 and 1878.
Proposals Explained
The bond issue would have
first claim on $l.8 billion in
anticipated net revenue from
the system over 40 years, to re-
pay the principal and interest.
If the bonds are retired earlier.
the principal and interest cost
would be around SIG billion.
Because the earlier proposal
had the Treasury Department
assuming some of the risk, Of
ficials said a straight COMPARE
son is difficult to make between
the two financing proposals.
One expert said the differ
ence between the interest on
the two proposals is between
$3.50 million and 1919 million,
with some additional cost for
the principal on the bonds.
Another major difference be-
tween the two proposals appar-
emily is that almost twice as
much in revenue would be
needed to prevent the Treasury
from having to pay for bonds
and interest.
The Federal guarantee for
bonds would start after funds
for 9 per cent of the system
had been obligated, and would
be responsible for the remainder
of construction.
Under the discarded plan.
Federal guarantees would start
after rs per cent Of construc-
ton funds had been obligated,
and the majority Of the bonds
would not be issued until the
entire system was completed.
Downtown Subway
The Board of Trades indorse-
ment of a rail transit system
was reported in a carefully
worded statement by the boards
president, Charles f. Phillips.
The directors Of the board
said immediate steps should be
taken 10 start engineering and
construction for a downtown
subway and connecting railroad
links.
Construction Of the Three
Sisters Bridge and the Fast Leg
and Center Leg freeways also
was Endorsed.
But the design and con-
struction for the North Leg
freeway and for outlying"
parts OF the rail transit system
should remain flexible and
subject TO review"
THE board feels this is the
only way to develop the most
economical ana efficient sys-
tenn for the National Capital
area" the statement said. The
statement added:
-. The basic conclusion
OF the Mass Transportation
Survey OF 1859. that a balanced
plan Of highways and rail
rapid transit is needed, is still
valid.
The Board OF Trade sup
ported the early construction
OF the Center Leg OF the Inner
Loop FreeWay System. II also
hopes that ali early determine
alton can be made as 10 the
exnct location Of the proposed
Inner Loop East Leg west OF
the AnacOstia River, and
strongly recommended the CON-
struction OF the Three Sisters
Bridge. This is necessary for
the completion Of the South
west Freeway. the Potomac
Freeway and other connecting
freeways."