Mr. APPERSON. No, sir. There is not a firm date. We have up to 120 days, at which time we will go back to the membership and report back to them. There is no firm date.

Senator EAGLETON. When is the 120 days up?

Mr. APPERSON. Within that period of time, I would say, it would be about August 1.

Senator EAGLETON. That is all I have, Mr. Apperson. Thank you for being here.

We will recess, then, until 2:15, to hear about six witnesses in this afternoon's session.

(Whereupon, at 12:05 p.m., the subcommittee recessed, to reconvene at 2:15 p.m., the same day.)

AFTER RECESS

(The subcommittee reconvened at 2:20 p.m., Senator Thomas F. Eagleton, chairman of the subcommittee, presiding.)

Senator EAGLETON. The subcommittee will be in order. We will commence with our afternoon set of witnesses.

We have Mr. James A. Mollison, a director of the Washington Board of Trade as our first afternoon witness.

Mr. Mollison.

STATEMENT OF JAMES A. MOLLISON, A DIRECTOR, WASHINGTON BOARD OF TRADE

Mr. MOLLISON. Thank you, very much.

My name is James A. Mollison, a director of the Metropolitan Washington Board of Trade and chairman of its Task Force on Mass Transit Bus Service. I appreciate this opportunity to present our views concerning bus service in the National Capital Area, a situation which causes us grave concern.

Our task force met with officials of various agencies concerned with the current crisis in bus transportation and we have studied the record of the Washington Metropolitan Area Transit Commission concerning problems confronting D.C. Transit, Inc. Subsequently, our board of directors has reviewed this matter and concluded that rising costs have reached the point where D.C. Transit can no longer pay for its operations, much less make a profit. Therefore, a basic change in financing bus operations is essential to the continuing operation of bus service.

D.C. Transit management has testified before the House District Committee that financial relief is imperative and it has endorsed the subsidy concept. S. 1813 proposes such a subsidy based upon a 25cent fare. The Board of Trade opposes rolling back the fare. We think the present 30-cent fare is justified in the Washington economy. If subsidy is provided, it should be as small as circumstances demand. WMATC has projected a subsidy of $1,157,102 at the 30-cent fare, and $5,956,332 at the 25-cent fare for the year ending June 30, 1970.

In todays economy, a 5-cent fare differential does not impact heavily on the rider, but the District budget would be increased by nearly $6 million. We do not think the nickel differential is a large enough direct savings to riders of buses to justify asking the community to accept this additional tax burden.

In event, under this bill the whole matter would again come before the Congress for the same reappraisal this committee is now conducting. This bill appears to be a temporary, stopgap measure which would defer the problem to a later date. We are hopeful a solution can be. reached now which will provide a satisfactory long term answer. Therefore, we support S. 1814 which would require the Washington Metropolitan Area Transit Authority to initiate negotiations with (145)

D.C. Transit, Inc., for the purpose of acquiring its assets, thereby putting our major bus service and the rail rapid transit system under a single ownership. We support the provision for a temporary subsidy if it is necessary to insure continuity of bus service while negotiations are being conducted and compact amendments are agreed upon.

Long term financial stability should result from a common-fare structure and cost relationship under WMATA and the metropolitan financial base provided by the Transit Authority's compact. Compatability and service by bus and rail rapid transit should be maximized under single ownership especially since a prime function of bus operations will be to serve the rail rapid transit.

We believe S. 1814 provides an equitable approach to resolving the current fiscal crisis and putting the community's mass transit services on a sound basis for the years ahead.

Thank you for this opportunity to present our view on this highly important matter affecting mass transportation in Metropolitan Washington.

Senator EAGLETON. Mr. Mollison, have you given any thought, in terms of S. 1814, to what should be done if private negotiations between the two parties break down in the sense that an agreement cannot be achieved?

What should be the ultimate resolution of the dispute condemnation?

Mr. MOLLISON. I think condemnation is the only thing we can lean to on that, because after all, in condemnation, the interests of the seller as well as the buyer are protected.

Senator EAGLETON. Thank you very much, sir. We appreciate your appearing.

Mr. MOLLISON. Thank you very much, sir.

Senator EAGLETON. Mr. Bruce Terris, chairman of the Democratic Central Committee of the District of Columbia.

STATEMENT OF BRUCE TERRIS, CHAIRMAN, DEMOCRATIC CENTRAL COMMITTEE OF THE DISTRICT OF COLUMBIA; ACCOMPANIED BY LANDON DOWDEY, COUNSEL

Mr. TERRIS. The gentleman at my side is Landon Dowdey, who has been counsel in these struggles for sometime.

This hearing is one more step, though we hope the last one, in the long and almost continuous struggle against exploitation of the public by O. Roy Chalk. A half dozen years ago, we, Congress and other community groups were silent, our predecessors on the Central Committee began a series of suits challenging the fares and profits of D.C. Transit. The Central Committee has since that time won several court decisions which have saved the public millions of dollars.

Now, we hope that this committee will report a bill which will deny D.C. Transit an opportunity to exploit the public in the future and guarantee reasonable fares to the public.

First, the Democratic Central Committee supports a subsidy. It is clear that operating costs will continue to rise. The poor cannot afford to pay spiraling bus fares to move from one place to another. Higher fares will mean that more affluent riders will increasingly drive their cars which will result both in increased demands for freeways and

fewer bus riders which in turn will produce even higher fares. We therefore support the proposal of subsidies to retain present fares and in fact to lower them as much as possible consistent with other critical needs of the District.

It is of course essential that the city only subsidize riders within the city. We hope that suburban communities will meet their responsibilities by subsidizing their own riders in order so that they will ride buses rather than continue their demands to drive freeways through our neighborhoods.

We urge that the funds for subsidies come as much as possible from new sources of funds. The city government already suffers from severe shortages of money for education, welfare, health, and other vitally needed services. An appropriate source of funds would be a tax on all full-day parking. This tax would not only provide funds for a bus subsidy but would discourage commuters from driving and therefore making demands for more freeways and would encourage them to ride buses thereby lowering the subsidy received.

While we support a subsidy in principle, we strongly oppose any subsidy of O. Roy Chalk's D.C. Transit. The history of private ownership in this city under Wolfson and Chalk strongly supports public ownership. We oppose even a temporary subsidy to Mr. Chalk because it will be used to benefit Mr. Chalk and not the public and will only extend the time before public ownership is achieved. Mr. Chalk has assets that can be sold or mortgaged to enable him to meet his bills prior to public ownership.

Public ownership is hardly a radical step. The District of Columbia is by far the largest American city with a privately owned bus company. Except for a few small cities, no private bus company receives a subsidy in this country.

No matter how committed one can be to free enterprise, there is no justification for subsidizing O. Roy Chalk. He has demonstrated that he is not an honest businessman interested in making a fair profit by providing the best service at the lowest price. His record shows that he has exploited the riders of this city. It would be unconscionable to use the public treasury to bail out Mr. Chalk and guarantee him profits after what he has done to the public.

First, D.C. Transit under O. Roy Chalk has made extravagant profits. Over a 10-year period, D.C. Transit made $728,000 per year in profits on a $500,000 investment or a return of over 140 percent a year. The dividends per year for 6 consecutive years were $500,000, a 100 percent return on investment a year. These are entirely operating profits; they do not even take into account substantial appreciation of real estate.

Second, Mr. Chalk has consistently failed to meet his obligations. He is over $2 million in arrears to the employees' pension fund. He has deliberately broken agreements with the Metropolitan Transit Authority such as failing to buy 100 buses a year after being granted a depreciation allowance to do so. His dissipation of a fund for the benefit of riders by using it for operating expenses has been found illegal by the court of appeals.

While Mr. Chalk justifies these failures by claiming poverty, his company has many valuable nonoperation assets which could be sold to meet his legal obligations. Any other private businessman would