Evening star. [volume] (Washington, D.C.) 1854-1972, 1901-06-04
Action Taken Yesterday in Affairs Of
Washington Traction Company.
ALLAN |. M'DERMOfF PUT In CHARGE
Application Therefor Made by Trus-
tee of the Bonds.
EFFECT OF THE MOVE

In response to an application from the
United States Mortgage and Trust Com
pany of New York, trustee of the bonds Of
the Washington Traction and Electric
Company. Incorporated under the laws of
West Virginia, Judge Nathan Golf of the
United States circuit court, sitting at
Clarksburg. W. Va, yesterday appointed
Allan l. McDermo-t receiver for that com
pany- This application is a part of the
plan that has been adopted for the reor-
ganization of this company, under the law
of Congress. Owing TO the fact that Sat
urday the company defaulted on the pay
rent of the June interest. it was possible
for any bondholder to make an applica-
ton for a receiver. In order to avoid this
possibility and any complication that might
arise, it was decided by the management
to follow the course of asking for re-
ceiver
This action does not affect the corporate
identity OF the eleven street railroads and
the two electric lighting companies con-
trolled by the Washington Traction Com
pany. These are still Independent corpora
tionS. each with its set of officers and each
is still doing business. They will continue
as heretofore. The only change brought
about by the action of yesterday is the
replacing of the officers of the Washington
Traction Company 10y a receiver, and turn
ing over to his control the interests OF
holding company having the custody of thu
securities of the other corporations. which
were purchased Two years ago. Mr.. Nc
Dermott. who is the receiver. is also the
president of all the other corporations.
Merely Temporary.
1t is expected the receivership will be
only of temporary duration, and that in
the course of the next sixty days. possibly,
the committee appointed by a majority of
the bondhOlders 10 prepare plan of or
ganization will have its report in readi-
ness. The basis of such a plan will. of
course. be the act of Congress authorizing
the consolidation of all these companies
into one corporation. The plan will en-
brace a scheme for exchanging the securi-
ties of the Washington Traction Company
for those of the new concern. and when
that is effected. the right and title to the
entire system of street railroads and to the
TWO electric lighting plants will be vested
in the new company.
1t is also expected that the amount of the
securities of the new company will be
regulated by the earning capacity of the
new system. just at present the results
are not what were expected when the
scheme of buying the properties pro-
posed. for one reason. among others, that
as yet central power plant has not been
established This will be partially accom-
pliShed when the improvements now in
progress at the plant of the United States
Electric Lighting Company are completed.
Il is estimated that from this source alone
q SAVING OF SItb-thp q year VIII be made.
stock Remains Firm.
1t was expected in some quarters that
the local market for the Washington Trac-
ton bonds would be affected unfavorabIy
today by the news of the receivership. On
the contrary. while a larger number OF he
bonds were dealt in on the local stock ex-
change than was the case yesterday or
the day before. the price remained firm.
There were bonds of the face value of S36.-
oO sold today, and the closing figure was
10 81. as was the closing price of yester-
day Inc variations were only about one
quarter.
1t is stated that the orders for these
bonds came largely from New York, and
the buying Is credited TO inside interests
From this point of view the belief Is held
that the prospects of these securities are
considered good at these figures by those
who are supposed to have opportunities of
getting information.
There have been rumors based on some
recent changes in the ownership of con-
siderable blocks of the WASHINGTON Trac-
ton stock, involving il is understood a
transfer in the Contract-tO the effect that
there is some friction between the former
controlling interests and those which have
recently come into the control.
II is stated on good authority that there
fs no foundation for such rumor. and that
while a change in the control of the stock
has taken place. yet both the old and the
new interests are in entire harmony.
Reduced Membership of board
At recent meeting of the board of
directors of the Washington Traction Com
pany il was decided to reduce the member
ship Of the board from nineteen to eleven
members.
This personnel of the board is the same
practically as that of the boards of the
constituent roads. The board as now con-
stituted. is as follows: Allen McDermott
George H Harries, George ". Young of
New York. .. T. Crosby. c. A Leib, e.
hp ri rEar .l.lI
J. Hayward of Baltimore, George W.
Bacon Of New York. r. c. Briggs of New
jersey and J. B. Lackey of this city
The Washington members who retired
f,om the board Were :. w Woodward. John
joy Edison and \. \. Wilson.