Street Railways in Washington, D.C. - History - Monopoly

Monopoly

On December 1, 1933, Washington Railway, Capital Traction, and Washington Rapid Transit merged to form the Capital Transit Company. Washington Railway continued as a holding company, owning 50% of Capital Transit and 100% of PEPCO, but Capital Traction was dissolved. For the first time, street railways in Washington were under the management of one company.

Capital Transit made several changes. As part of the merger, the Capital Traction generating plant in Georgetown was closed (and, in 1943, decommissioned) and Capital Transit used only conventionally supplied electric power. In 1935, it closed several lines and replaced them with bus service. Because the Rockville line in Maryland was one of the lines that was closed, the Capital Transit Community Terminal was opened at Wisconsin Avenue NW and Western Avenue NW on August 4, 1935. At the same time, the car barn on the west side of Wisconsin at Ingomar was razed and replaced with the Western Bus Garage. In 1936, the system introduced route numbers. On August 28, 1937, the first PCC streetcars began running on 14th Street NW. By early 1946, the company would place in service 489 of the streamlined, modern PCC model and, in the early 1950s, become the first in the nation to have an all-PCC fleet. (Here's a General Electric ad about PCC cars in Washington.)

During the 1930s, city newspapers began pushing for streetcar tunneling. The Capitol Subway was built in 1906 and three years later, the Washington Post called for a citywide subway to be built. Nothing happened until Capital Transit took over. The full $35 million plan to depress streets as trenches for exclusive streetcar use never materialized, but in 1942 an underground loop terminal was built at 14th and C Streets SW under the Bureau of Engraving and on December 14, 1949, the Connecticut Avenue subway tunnel under Dupont Circle, running from N Street to R Street, was opened.

At first, business was good for the new company. During World War II, gasoline rationing limited automobile use, but transit companies were exempt from the rationing. Meanwhile, wage freezes held labor costs in check. With increased revenue and steady costs, Capital Transit conservatively built up a $7 million cash reserve. In 1945 Capital Transit had America’s 3rd largest streetcar fleet. (A map of the system in 1948)

In 1946 in a decision by the United States Supreme Court in North American Co. v. Securities and Exchange Commission, the Supreme Court upheld the Public Utility Holding Company Act of 1935 and forced North American, because it also owned the Potomac Electric Power Co., to sell its shares of Capital Transit. Buyers were hard to come by, but on September 12, 1949, Louis Wolfson and his three brothers purchased from North American 46.5% of the company's stock for $20 per share and the Washington Railway was dissolved. For $2.2 million they bought a company with $7 million in cash. The Wolfson's began paying themselves huge dividends until, in 1955, the war chest was down to $2.7 million. During the same period, transit trips dropped by 40,000 trips per day and automobile ownership doubled.

On December 29, 1954, Capital Transit lost one of its last freight customers when the East Washington Railway took over the delivery of coal from the B&O to the PEPCO Power plant at Benning. Previously this had been done using Capital Transit's steeple-cab electric locomotives operating over a remnant of the Benning car line.