(2) no person who, at the time this section takes effect, is an officer or director of an air carrier shall be required to secure the approval of the Civil Aeronautics Board in order to hold the position of officer, director, member or stockholder holding a controlling interest of the Corporation or of any common carrier controlled by the Corporation which is engaged in mass trapsportation of passengers for hire in the Washington Metropolitan Area. As used in this subsection, the term "air carrier" has the same meaning as when used in section 409 (a) of the Civil Aeronautics Act of 1938. (e) Notwithstanding section 20a (12) of the Interstate Commerce Act, authorization or approval of the Interstate Commerce Commission shall not be required in order to permit a person who is an officer or director of the Corporation to be also an officer or director, or both, of any common carrier controlled by the Corporation which is engaged in mass transportation of passengers for hire in the Washington Metropolitan Area.

"Air carrier”.

49 USC 489.

41 Stat. 496. 49 USC 20 a.

Capital

Transit

SEC. 14. The Corporation, at the time it acquires the assets of Capital company, liabillTransit Company, shall become subject to, and responsible for, all ties. liabilities of Capital Transit Company of whatever kind or nature, known or unknown, in existence at the time of such acquisition, and shall submit to suit there for as though it had been originally liable, and the creditors of Capital Transit Company shall have as to the Corporation all rights and remedies which they would otherwise have had as to Capital Transit Company: Provided, however, That the Corporation shall not be liable to any dissenting stockholder of Capital Transit Company for the fair value of the stock of any such stockholder who shall qualify to be entitled to receive payment of such fair value. No action or proceeding in law or in equity, or before any Federal or District of Columbia agency or commission, shall abate in consequence of the provisions of this section, but such action or proceeding may be continued in the name of the party by or against which it was begun, except that in the discretion of the court, agency, or commission the Corporation may be substituted for the Capital Transit . Company. In any and all such actions or proceedings, the Corporation shall have, and be entitled to assert, any and all defenses of every kind and nature which are or would be available to Capital Transit Company or which Capital Transit Company would be entitled to

assert.

PART 2.-MISCELLANEOUS PROVISIONS

SEC. 21. (a) Section 14 of the joint resolution entitled "Joint resolution to authorize the merger of street-railway corporations operating in the District of Columbia, and for other purposes", approved January 14, 1933 (47 Stat. 752), as amended (Public Law 389, Eightyfourth Congress), is hereby repealed to the extent that such section repeals the charter of Capital Transit Company, without thereby affecting the termination of its franchise.

(b) Upon the taking effect of part 1 of this title, Capital Transit Company shall not be authorized to engage in business as owner or operator of electric railway, passenger motor bus, public transportation of passengers, or common carrier of passengers within, to, or from, the Washington Metropolitan Area.

(c) Capital Transit Company shall continue to exist as a corporation incorporated under the provisions of subchapter 4 of chapter 18 of the Act entitled "An Act to establish a code of laws for the District of Columbia", approved March 3, 1901, as amended (D. C. Code, title 29, ch. 2), under its certificate of incorporation, as amended, and Capital Transit Company may amend its charter in any manner provided under the laws of the District of Columbia and may avail itself of the provi

69 Stat. 724

31 Stat. 1284.

Effective dates.

Temporary transit system.

sions of the District of Columbia Business Corporations Act in respect to a change of its name and may become incorporated or reincorporated thereunder in any manner as therein provided. Nothing referred to in this title, or the sale and vesting of the assets of Capital Transit Company, referred to therein, shall cause or require the corporate dissolution of Capital Transit Company.

SEC. 22. Nothing in this title shall be deemed to extend the franchise of Capital Transit Company beyond August 14, 1956, or, except as otherwise provided in this section, to relieve Capital Transit Company of any obligation to remove from the streets and highways at its own expense all of its property and facilities and to restore the streets and highways in accordance with the provisions of the District of Columbia Appropriation Act, 1942 (55 Stat. 499, 533) in the event the Corporation fails to acquire the assets of Capital Transit Company. If part 1 of this title takes effect, Capital Transit Company shall thereupon be relieved of all liability to remove from the streets and highways of the District of Columbia all of its properties and facilities and to restore such streets and highways.

SEC. 23. The powers and jurisdiction of the Public Utilities Commission of the District of Columbia with respect to Capital Transit Company shall cease and be at an end upon the taking effect of part 1 of this title.

TITLE II

SEC. 201. (a) Part 1 of title I shall take effect on August 15, 1956, but only if prior thereto D. C. Transit System, Inc. (referred to in this title as the "Corporation") has acquired the assets of Capital Transit Company and has notified the Commissioners of the District of Columbia in writing that it will engage in the transportation of passengers within the District of Columbia beginning on August 15, 1956. If the Corporation has not acquired the assets of Capital Transit Company prior to August 15, 1956, but does thereafter acquire such assets, the Corporation shall, on the date of such acquisition, give written notice thereof to the Commissioners, and part 1 of title I shall take effect upon such date of acquisition.

(b) Part 2 of title I, and this title, shall take effect upon the date of the enactment of this Act.

SEC. 202. If it is determined by the Commissioners of the District of Columbia that, due to any act or omission on the part of the Corporation, the Corporation has not acquired the assets of Capital Transit Company and if such Commissioners approve a valid contract, ratified and approved by the required number of stockholders of Capital Transit Company, between Capital Transit Company and some other corporation providing for the acquisition of such assets and if such other corporation is also approved by such Commissioners as capable of performing the operation contemplated by the franchise provisions of part 1 of title I, then the terms "D. C. Transit System, Inc." and "Corporation" as used in this Act shall be deemed to mean such other corporation for all purposes of this Act.

SEC. 203. If part 1 of title I of this Act does not take effect on August 15, 1956, the Commissioners of the District of Columbia may authorize (including authorization of such contractual agreements as may be necessary) such mass transportation of passengers within the District of Columbia, beginning on and after August 15, 1956, and until such date as part 1 of title I of this Act takes effect, as may be necessary for the convenience of the public. Such transportation shall be furnished to the public at such rates and under such terms and regu lations as may be recommended by the Public Utilities Commission and approved by the Commissioners of the District of Columbia. Approved July 24, 1956.

Mr. GRAY. Are there any other questions?

I am sorry, Mr. Dawson, I thought you had completed your

statement.

Mr. DAWSON. Mr. Chairman and members of the committee, there is one other point that gives us some concern, and that is that we noticed in the brochure that was circulated yesterday, on page 14, that the Secretary had negotiated a contract for this service, and that implies negotiation to a conclusion.

However, D.C. Transit was never invited to submit a proposal for the new type of service between the parking area and the Capitol and the service on the Mall area, and that one variation alone might very substantially alter the proposal that D.C. Transit would make.

We think in all fairness that every public transit company operating in the District should have an opportunity to submit a proposal and to be considered in negotiations, although we deny the right of the Secretary to negotiate in view of the decision of the court and the suspension of all Federal laws by the compact act.

Mr. GRAY. That is a very important point you raised, General. Public Law 757, section 3, states no other transportation system in the District can be used, then what latitude would the Secretary have in advertising for competitive bids? He would not really have any, would he?

Mr. DAWSON. We think he has no authority to do so at the present time.

Mr. DENNY. That is the point I am bringing out, Mr. Chairman. Mr. GRAY. This is your contention then?

Mr. DAWSON. Yes, sir.

Mr. GRAY. He has no authority even on Government-owned property?

Mr. DAWSON. No, sir.

Mr. GRAY. What about the section of law he quotes, the act of May 26, 1930? I have not read it, but I assume that it is the National Park Act, which gives the Secretary authority to enter into agreements for transportation on Government-owned property.

Mr. DAWSON. Mr. Chairman, the Compact Act of 1960 in section 3 suspends the application of that act.

Mr. GRAY. Even on Government-owned property?

Mr. DAWSON. I believe you have a copy of the compact, in the yellow

jacket, before you.

Mr. GRAY. Even on Government-owned property?

Mr. DAWSON. It suspends the application of all laws.

Mr. GRAY. As pertaining to the District of Columbia?

Mr. DAWSON. All Federal laws.

Mr. GRAY. I say, as pertaining to the District of Columbia? It does

not repeal the act of May 26, 1930, per se.

Mr. DAWSON. It suspends the application.

Mr. GRAY. In the District of Columbia?

Mr. DAWSON. Yes, sir.

Mr. GRAY. Are there any other comments or questions?

Mr. DAWSON. Now, Mr. Chairman, I have one other very important practical aspect that I want to bring to the attention of the committee. Mr. GRAY. Yes.

Mr. DAWSON. Now, independent of all the legal reasons that D.C. Transit has offered you for its opposition to section 5, there is a very practical reason for opposition to that section. If the Secretary is directed to provide public transportation services in the Mall area and to the National Visitor Center at Union Station, D.C. Transit will be deprived of substantial revenues, fares that it would have collected had it not been for the competitive service of the Secretary.

I tell you, gentlemen, in all sincerity, that D.C. Transit cannot afford to lose these or any other revenues.

Management of the company notwithstanding, every effort for economy and efficiency has found it necessary to apply for three seperate fare increases in the last 3 years to meet rising costs. The third such application was just filed this past September and the income statement accompanying such application indicates that for the 12 months ended May 31, 1967, the company earned only a 2.05-percent rate of return on operating revenues of approximately $34 million.

The company cannot survive for long without financial relief in the form of either higher fares or Government subsidy. Under these circumstances, it would be most damaging to the financial plight of the company to have any of its existing revenues siphoned off by the Secretary.

Some idea of the extent of the revenues that D.C. Transit would stand to lose by enactment of this bill can be found in the court of appeals case to which I have referred. An exhibit in that case indicated. that the proposed shuttle operation on the Mall area alone, under contract with the Secretary, would cost the company over a million dollars in revenues.

It should also be realized in passing that to the extent the financial soundness of D.C. Transit's mass transportation operation is allowed to be impaired through the performance of competitive services by the Secretary, the ability of the company to provide effective feeder lines for the forthcoming subway system is correspondingly affected.

Now, there is one last point I want to comment upon. The second sentence of section 5 directs the Secretary to provide transportation to the National Visitor Center. There is no geographical limitation upon the scope of the Secretary's operation to the Visitor Center. He could conceivably operate between Union Station and any point, or as many points in the District as he desired, whether or not such points were part of the national park system under the Secretary's jurisdiction. Mr. Chairman, thank you for the opportunity to appear before you today.

Mr. GRAY. Well, thank you, Mr. Dawson, and also Mr. Davis. We deeply appreciate your coming.

This is a real problem and I am sure you can understand that we are sympathetic to the existing franchise, and we are sympathetic to your firm. However, I am also sure you realize legislation has to be a compromise. We hope we can work up something that will be satisfactory to everyone concerned.

Are there any other comments or questions?

Mr. MCEWEN. Mr. Chairman.

Mr. GRAY. Mr. McEwen.

Mr. McEwEN. General, I appreciate your calling our attention to that item on page 14 of the contract that the Department of the Inter

ior has already negotiated. I had read.this publication, but I am afraid I missed that.

I rather agree with your observation, this is speaking not only of the Mall area, but also to and from the Visitor Center.

I notice preceding that sentence, it says: "This service can be initiated immediately by the enactment of legislation authorizing the Visitor Center." Then it goes on and concludes "Under a 10-year contract the Department of the Interior has already negotiated."

I understand, General, it is your feeling that this would preclude D.C. Transit from bidding on this.

Mr. DAWSON. We have been precluded from bidding.

Mr. MCEWEN. On the Mall?

Mr. DAWSON. We bid on the Mall package, but not on the parking area package plus the Mall package.

Mr. MCEWEN. You would consider that this would indicate you would be foreclosed from putting a bid in on the transportation connection with the Visitor Center?

Mr. DAWSON. That is the way I read it.

Mr. GRAY. I thank the gentleman from New York.
Are there any other questions or comments?

I thank you gentlemen for coming. We appreciate it.

I wonder if I could have the attention of the committee members. We have two more witnesses. The next witness is the very lovely and distinguished Mrs. Ester Coopersmith, a member of the 21-member Commission. She has been very patient. I hope we can take her next, if you do not mind.

Mrs. Coopersmith, will you please come forward.

She is a member of the Commission, attended all the meetings, worked very hard in helping us come up with these recommendations, and she is here on behalf of the 21-member Commission.

I would hope we could conclude the hearings today and go into exexcutive session by next Tuesday and the full committee meeting by next Thursday. So if I could have the patience and tolerance of the members, we will try to finish today.

On behalf of the committee, Mrs. Coopersmith, I want to thank you for your very tireless work in behalf of the Commission. You attended all the meetings and were very attentive, very helpful, and we appreciate your patience in the last 2 days waiting to testify, and thank you very much for coming.

You can proceed in your own fashion.

STATEMENT OF MRS. ESTHER COOPERSMITH, MEMBER OF THE NATIONAL VISITOR CENTER STUDY COMMISSION, WASHINGTON,

D.C.

Mrs. COOPERSMITH. Thank you, Mr. Chairman. It is always a pleasure to wait on this committee.

Mr. Chairman and members of the House Subcommittee on Public Buildings and Grounds, my name is Esther Coopersmith. I am a mother of four children and I live in Chevy Chase, Md.

I am a public member of the President's Commission for the National Visitor Center.