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COMMITTEE ON THE DISTRICT OF COLUMBIA

JOSEPH D. TYDINGS, Maryland, Chairman ALAN BIBLE, Nevada

WINSTON L, PROUTY, Vermont WILLIAM B. SPONG, JR., Virginia

CHARLES E. GOODELL, New York
THOMAS F. EAGLETON, Missouri

CHARLES MCC. MATHIAS, JR., Maryland
JOHN T. McEvoy, Staff Director
SUBCOMMITTEE ON FISCAL AFFAIRS

THOMAS F. EAGLETON, Missouri, Chairman
WILLIAM B. SPONG, JR., Virginia

CHARLES MCC. MATHIAS, JR., Maryland

(II)

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WITNESSES

Apperson, George, president, local 689, Amalgamated Transit Union.--

Avery, George, chairman, Washington Metropolitan Area Transit

Commission.

Babson, Frederick A., chairman, Washington Metropolitan Area Transit

Authority -

Camer, Miss Dorothy---

Chalk, O. Roy, president and chairman of the board, D.C. Transit System,

Inc.-.

Dowdey, Landon, counsel, District of Columbia Democratic Central

Committee..

Dudley, Tilford E., District of Columbia Citizens Council.

Fletcher, Thomas W., Deputy Mayor-Commissioner, District of Columbia-

Graham, Gen. Jackson, general manager, WMATA.

Hatfield, Samuel O., controller, D.C. Îransit-

Jackson, Rev. William D.

Kennedy, John, general counsel, WMATA.

Kneipp, Robert F., assistant corporation counsel, District of Columbia

government.

Lewis, Melvin, executive director, WMATC.

Lowe, Schuyler, executive officer and comptroller, WMATA.

Mollison, James A., Washington Board of Trade.

Pendleton, Edmund, Jr., chairman, District of Columbia Republican en-

tral Committee..

Rush, Henri, Jr., counsel, District of Columbia Republican Central Com-

mittee.

Schneider, Douglas N., Jr., general counsel, WMATC..

Spear, Harvey M., counsel, D.C. Transit

Sternstein, Herman, counsel, Local 689, Amalgamated Transit Union.

Terris, Bruce, chairman, District of Columbia Democratic Central Com-

mittee

Trask, Alfred, D.C. Federation of Civic Associations-

PREPARED STATEMENTS

Apperson, George, president, Local Division 689, ATU...

Avery, George, chairman, Washington Metropolitan Area Transit Com-

mission..

Chalk, O. Roy, president and chairman of the board, D.C. Transit

Pendleton, Edmund E., Jr., chairman, District of Columbia Republican

Central Committee.-

Trask, Alfred S., District of Columbia Federation of Civic Associations..

171

196

151

42
123
132
74

earnings.--

Resolution of Federation of Citizens Associations.

Retained earnings 1956–68, history of..

S. 1814, suggested revised version -

Subsidies and tax exemptions received by D.C. Transit and WMA.

Subsidy requirements based on 5.2-percent rate of return, estimated

Track removal payment...

Washington Metropolitan Area Transit Authority Compact..

Washington Metropolitan Area Transit Regulation Compact...

Piiring

275

214

209

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211

!!

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226

279

PUBLIC ASSISTANCE OR PUBLIC OWNERSHIP

OF D.C. TRANSIT

TUESDAY, APRIL 29, 1969

U.S. SENATE,
SUBCOMMITTEE ON FISCAL AFFAIRS OF THE
COMMITTEE ON THE DISTRICT OF COLUMBIA,

Washington, D.C. The subcommittee met at 9:30 a.m., pursuant to call, in room 6226, New Senate Office Building, Senator Thomas F. Eagleton (chairman of the subcommittee) presiding.

Present: Senators Eagleton and Spong:

Also present: John T. McEvoy, staff director; James S. Medill, minority counsel; Jack W. Lewis, counsel; and Edith Moore, assistant chief clerk.

Senator EAGLETON. The subcommittee will come to order.

I have a brief statement that I will read for the record and then we will start with our series of witnesses, the first of which is Deputy Mayor Fletcher, if he wishes to come forward.

We are holding hearings today on the financial situation of D.C. Transit System and on proposed solutions of the problem. There are two bills under consideration.

S. 1813, which was drafted by the Washington Metropolitan Area Transit Commission, would reduce fares from 30 to 25 cents and make up the difference through a public subsidy to the present owner.

S. 1814 authorizes the Washington Metropolitan Area Transit Authority to begin negotiating for the purchase of the company with an operating subsidy to be provided in the interim.

In addition to these legislative proposals, there is a third option of meeting the problem through an increase in fares in the event that Congress takes no action on the bills before it.

A viable mass transportation system is important to the life of any large urban community, but it is critical in the Nation's Capital where thousands of Federal and District employees depend upon buses to get to their work. The question before us today is viable at what price?

A rate increase-or what is more likely, a series of rate increaseswould fall hardest on those who are least able to pay and who have the least choice as to how they travel since a large number do not own automobiles.

Those who do own autos have the option of using them instead of taking the bus at higher fares, and the history of rate increases indicates that large numbers will do just that. This would not only add to the traffic problems of the city, but it would mean a diminishing return to the company on the increased fares.

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A subsidy may be the answer, but it raises the question of whether Congress shouldn't consider going a step farther and put the company under public ownership.

D.C. Transit is the largest privately owned bus system in the country. But it may be asked what would be left of private enterprise when ali element of risk is removed! The subsidy proposal before us would, in effect, underwrite the company's costs and guarantee the stockholders a 5.2-percent return on gross operating revenues.

The other major test of private enterprise is the amount of investment and the committee will be inquiring into that subject as well.

For its part, public ownership is no panacea. There would be the problem of obtaining funds to acquire the system and a subsidy might well be required to maintain reasonable fares in the face of high operating costs.

The purpose of this hearing is to clarify the facts, and to hear all sides on this issue. We have a large number of witnesses to hear from, so I would appreciate it if those who testify would keep their statements and answers brief and to the point.

Parenthetically, I might add, almost every witness has submitted his statement in advance. So I will ask each witness rather than read the entire prepared statement, some of which have been presented to the House committees going into these matters, that they capsulize it and speak extemporaneously.

In connection with these hearings, for the record, I now submit (1) copies of S. 1813 and S. 1814 as introduced in the Senate; (2) copy of the staff memorandum; and (3) copy of the D.C. Transit franchise.

(The documents follow :)

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