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the Secretary the authority to enter into an agreement with a private concessionaire, do you feel that you would have your day in court, so to speak, in competitive bidding, or do you feel that the Secretary might favor another type of service than you are providing now? What is your feeling on that?

Mr. DAWSON. Mr. Chairman, I believe the answer is in about three parts there.

First of all, if you gave notice and withdrew from the compact, there would be no question of your rights insofar as the compact itself was concerned.

I would point out that the operation of this service as envisioned by the Secretary-and I believe by the committee-operates not only on federally owned property, but on property owned by the District of Columbia, the city public streets, so that the Congress does not control the operation on those streets.

And the third part is that the Congress did, in 1956, give D.C. Transit System, after very serious consideration and countless hearings and study, a franchise to operate the public transportation system in the District of Columbia, and I believe such action by the Congress would be morally wrong.

Mr. GRAY. This is what I wanted to find out, your opinion.

Let me ask you this: Would your company be interested, from a financial standpoint, in providing free bus service, let's say, from the Union Station up to the Capitol and taking a portion of the proceeds from parking?

Mr. DAWSON. Yes, sir.

Mr. GRAY. The reason I ask that question is I wonder whether or not free service would have anything to do with your rate structure. I understand you have to go before the Commission here in the District, and I understand you have an application in now for a rate increase, which has been rejected. Now

Mr. DAWSON. There is one pending, Mr. Chairman.

Mr. GRAY. Would you see any conflict if the Congress would act to give free bus service from the Visitor Center up to the Capitol and the arrangement could be worked out with the Secretary on the reimbursement, that this would have any effect at all on your rate structure in the rest of the city?

Mr. Dawson. Mr. Chairman, there is a provision in the compact that free transportation cannot be provided. However, as I understand, what you are suggesting is there would be payment through some source to the company for the service that it does perform. Mr. GRAY. Right.

Mr. DAWSON. At the present time the company does provide transportation for schoolchildren with the District of Columbia for 10

cents.

Mr. GRAY. The way you look at it, General, this would not affect your rate structure and your fees for the carrying of passengers in the District of Columbia if you had a separate contract with the Department of the Interior to provide this free service, and that contractual obligation was entered into in good faith between you and the Secretary, in your opinion as a lawyer, it would not have any effect on your rate structure in the District of Columbia?

Putting it another way, if you got a 10-percent increase in your fares, would this necessarily hold that the 10-percent increase would apply to this shuttle service from Union Station to the Capitol?

Mr. DAWSON. I believe, Mr. Chairman, that anytime the company applied for a fare increase, that its income from this source would be taken into consideration as a part of its total income and the rate structure would be based including that income.

Mr. GRAY. But would it necessarily mean that this free service. would have to be increased along with the other fares?

Mr. DAWSON. No, sir.

Mr. GRAY. That is the point I am getting at. That could be operated separately?

Mr. DAWSON. I would say so.

Mr. DENNEY. Mr. Chairman.

Mr. GRAY. The thing I am trying to avoid is saying we are going to provide this service free to visitors and then 60 days later you get a general fare raise. Then we have to go to Congress and the taxpayers to make up the difference. This is what we are trying to avoid.

Mr. DAWSON. Mr. Chairman, I might point out that as of now, we also have contracts with the Department of Defense and State Department for carriage of their employees on a specialized basis.

Mr. GRAY. Let me ask another question, General, that might shed some light on this.

This overall fare increases that you have pending now, would this affect this contractual obligation to carry schoolchildren for 10 cents? Mr. DAWSON. The pending fare increase application would not affect that.

Mr. GRAY. So the point is these contracts can be handled separately? This is what I am getting at.

Mr. DAWSON. This is correct.

Mr. WRIGHT. Will the gentleman yield?

Mr. GRAY. Yes; I yield to the gentleman from Texas, Mr. Wright. Mr. WRIGHT. The public schools in Arlington, Va., for example, operate their own schoolbuses, I believe. This is separate and distinct from your D.C. Transit Co.

Why does that not come under the purview of the Commission? They are within the geographical area of jurisdiction of this metropolitan Commission.

I do not suppose the Metropolitan Commission has given a certificate of public convenience and necessity to the Arlington school system to operate the schoolbuses, has it? Or has it?

Mr. DAWSON. Mr. Wright, Mr. Davis can respond to that.

Mr. WRIGHT. Yes, sir.

Mr. DAVIS. Under the compact

Mr. WRIGHT. Under the compact itself they were exempt, is that correct?

Mr. DAVIS. That schoolchildren transported in schoolbuses are exempt.

Mr. WRIGHT. Right, all right.

Mr. DAVIS. In addition to that, in Arlington, they do use private enterprise to transport schoolchildren.

Mr. WRIGHT. I see. Now, just as a practical matter, laying aside for the moment the legal questions involved in the compact and the jurisdiction of the Commission-I tend to disagree just as a legal matter. I think the Congress probably has a right to exempt a certain route, but let's lay that aside and not argue that point here. I do not think we want to get into that or we would be here all day.

Do you think, just from the standpoint of business, that D.C. Transit could make money on a separate route of the type we described earlier in this hearing distinguishing it from your regular D.C. Transit System, and perhaps not interchangeable with it by means of transfer? Mr. DAWSON. Yes, sir, Mr. Wright. I think the company could make money and I am sure Universal contemplates making money.

Mr. WRIGHT. Let us assume that the Commission had heard the application of Universal, it being a successful bidder in this instance with the Interior Department. And let us assume further that the Commission had granted to Universal this certificate of convenience and necessity. Would you then feel that that constituted an infringement of the franchise?

Mr. DAWSON. I would say, Mr. Wright, that the Commission must make its determination on the basis of the evidence presented as to whether the convenience of the public will be served, and that the Universal company would have had to make that showing. And if it were shown that D.C. Transit could not provide that service under its franchise, the Commission might well decide that the public would be served better by Universal.

Mr. WRIGHT. The Commission might so decide. Let's assume the Commission had so decided. Would it be your position as the attorney for D.C. Transit that the Commission's action was final? Or would you, in that instance, have felt that you might have cause for action on the grounds of infringement of your franchise?

Mr. DAWSON. There is always a right of appeal to the courts, so we might have that opportunity.

Mr. WRIGHT. I suppose what we come to is that we have two separate and distinct acts of Congress: One by which we agreed to the compact, and the other the act of 1956 by which we granted the franchise to D.C. Transit.

Now, do you think it is not a sufficiently established principle of law that an act passed subsequent to an earlier act and specifically repealing all acts or parts of acts in conflict therewith is adequate to establish the primacy of the latter act?

Mr. DAWSON. That is a general rule of law. I do not think it would be applicable with respect to unilaterally modifying the compact without observing the terms of the compact.

Mr. WRIGHT. Do you think it would be adequate with respect

Mr. DAWSON. I do not think, Mr. Wright, in good conscience, the Congress would want to lightly derogate its obligation under the franchise.

Mr. WRIGHT. I quite agree with you on the question of conscience and the question of good faith and so forth. But we got into a legal discussion awhile ago, and I am not sure it is a good thing for us to pursue it in great depth here, but I am trying to find a way out.

You present one way out which you think will satisfy everybody, that would be for D.C. Transit to run this route under a certificate granted by the Commission; correct?

Mr. DAWSON. That is right.

Mr. WRIGHT. Do you think the service ought to be provided? Correct?

Mr. DAWSON. I did not hear you.

Mr. WRIGHT. You feel it is a service that should be provided?

Mr. DAWSON. Yes, sir.

Mr. WRIGHT. And yet you have had an application pending for some time before the Commission to provide such service, and it has not been acted upon.

Mr. DAWSON. Mr. Wright, in some justification of that delay, may I say that the Commission was waiting for the court decision. In my judgment that was not a proper basis for delay.

I would point out that the Commission has a right to delay as long as it sees fit to, up to a certain point.

Mr. WRIGHT. Surely. Now put yourself in the position of the committee, or let's say of Congress. What we want to do is assure that this service will be provided. By eliminating section 5, we do not so insure, do we?

If we just eliminate all reference to it, we do not have any guarantee that this service is going to be provided, do we?

Mr. Dawson. It will not be provided in the law, but I have the assurance that I have given you by Mr. Chalk that D.C. Transit will provide such a service.

Mr. WRIGHT. You cannot speak for the Commission as to whether it will grant you a certification of convenience and necessity?

Mr. DAWSON. I believe that the court case now being disposed of, Congress not taking contrary action, the Commission would grant that

certificate.

Mr. WRIGHT. Well, our situation, as I think you understand is that we want to see to it that service is provided. We also want to make certain that at least parts of this service bringing visitors from the Visitor Center to the Capitol are provided on the basis that comports with what we are trying to do in parking their cars.

Mr. DAWSON. The company supports you wholeheartedly in that. Mr. WRIGHT. Do you believe you could operate on the basis of a stub given to your driver for vehicles in the lots for a relatively nominal sum to transport people from the proposed Visitor Center to the Capitol?

Mr. DAWSON. We are using stubs in connection with the children's fare in the District of Columbia now.

Mr. WRIGHT. Thank you very much.

You can see that we have a somewhat knotty problem, I am sure, and we can appreciate your situation.

Mr. DAWSON. We appreciate your position.

Mr. WRIGHT. We do want to make sure the service gets provided not only to the Capitol, but I want to see to it that visitors get the opportunity to get on a separate shuttle service that will take them to the points of interest up and down the Mall.

Mr. DENNEY. For purposes of the record and to help this committee, I would request that Public Law 757, by unanimous consent, be inserted in the record at this point, and specifically section 3, which provides that no other transportation system will be granted in the District because of this exclusive franchise that has been given to D.C. Transit.

I think we have a real problem on whether to strike out section 5 entirely, or to work out some language that protects this franchise. Otherwise, we are going to have to repeal the franchise, and I do not think that is proper.

Mr. GRAY. I will say to the distinguished gentlemen, we certainly will take this up in executive session and try to do what is fair.

Mr. DENNEY. May we have a ruling on my unanimous consent request?

Mr. GRAY. Without objection, it will be printed in the record at this point.

(Public Law 757 follows:)