Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-09-25
Object to Finance Railway Co.

dIe StochHoluerS III tfle new concern
Object to Finance Railway Co.
Neither Mr.. Bell nor Mr. Allies knew
whether the plans Of the corporation are
to be laid before the directors for formal
consideration. but both confirmed the
statement Of Clarence P. King, president
of the Washington Railway and Electric
Company. that the object of the corpora
tion is to finance the properties of the
railway company.
The directorate Of the Washington
posed of the following: Clarence p.
King, w. F. Ham. w. B. Hibbs, Milton
E. Allies. Charles J. Bell, Woodbury.
Blair. William Loeb. jr., Clarence r.
Norment and George Truesdell.
One of the nine directors. Col. George
Truesdell. knew nothing of the forma-
ton of the million dollar corpo-
ration until he read the newspaper ac-
counts of 1T. according to a statement
made to The Star yesterday by Col
Truesdell.
Mr. Blair is out of the city and it is not
known whether he is financially interest
ed in the Virginia corporation. The other
directors are understood to be actively
engaged in promoting the new concern,
not with the knowledge or
authority of the board, according to the
statements made.
Publicity given the plans of the cor
poration resulted in surprise being ex-
pressed by the promoters that the public
should not have been fully aware Of what
was contemplated.
Plans Not Even Discussed.
The latest Developments show that not
only is there any provision in the char
ter to indicate that the company intended
to engage in business in the District of
4 nj, i1a nf
public service corporations. but that
formation of the concern for the alleged
purpose of financing the properties Of
the Washington Railway and Electric
Company not even was discussed at the
board meetings of the railway company.
According to recent statements by
President King, the real reason for the
launching of the Maryland-V Virginia Rail-
way Company is the fact that money
raised by the sale of bonds Of both the
Potomac Electric Power Company, a sub
sidiary company, and the Washington
Railway and Electric Company is about
exhausted. and funds are needed for con-
tinuinG the development OF the proper
ties. Under the charters of both organ
izations no further bonds can be issued,
it is stated.
Seeking a way to finance these COM
panies and assure their development for
the next thirty or forty years, it was
explained. the management worked out
the plan of underwriting the Maryland
Virginia Railway Company for the pur-
pose of taking care OF the future of the
properties here.
Raises Important Question.
The question has now been raised as
to what constitutes the management of
the Washington Railway and Electric
Company, in view of the statements
made to the effect that the underwriting
scheme referred to by President King
never was discussed or indorsed by the
board OF directors of the company.
President King stated that the plan had
been under consideration for year, and
that 1t would be passed on by the stock
holders Of the companies concerned.
Papers on fle in the Office Of the cor
poration commission at Richmond. Va,
show that the plan had been under con-
sideration to the extent OF the actual
formation of a company and the disposal
of S5,50OCO worth of securities.
So far it appears. the carrying out of
the plans Of the new corporation have
been nearly realized without the board
and Electric Company, as such, knowing
anything OF the plans or stockholders be-
ing notified that any such movement was
contemplated.
Mr.. Kings statement went into the de-
tails of the necessity of forming the cor
poration in the interest of the Washing
ton Railway and Electric Company 1t
was pointed out that the expenses of the
sro,ln of companies controlled by the
street railway concern for the year 1872
would total 81, 100000. and that it was es-
timated that in order to keep abreast of
the development of the city and give the
proper service. at least $1,OOoOOO year
would be needed. .
Outside Of the expenses for the current
year 1t was shown that there is an ad-
ditional expense of $25O.OOO which will
have to he paid October !, when bonds Of
the Brightwood line become due.
Not Discussed by Directors.
Yet the need of providing funds for i'm
proyements and Of making provision for
extinguishing the Brightwood line bonds
was not discussed by the directors of the
railway company in connection with the
formation Of the rty-million-dollarc COR
poration, it now appears, while at least
one director was not aware OF the exist
ence of the new corporation, notWith-
standing its charter was granted last
November.
President King and promoters Of the
corporation have declared emphatically
that there is no inclination on their part
TO maintain secrecy concerning the pres
ent movement and that everything has
been open and aboveboard.
Recent developments. however, have
tended to still further confuse the sit
nation regarding the formation and pur-
Whatever it's object no light is thrown
on the question in the provisions OF the
charter Of the records of the board
,oaetincs of the WaShinatou Railway and