Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-09-19
An Unsatisfactory Explanation.

Disclaimers are entered by several of
those who have been active in the or
ganiZation of the holding company in
cprporated under the laws of Virginia.
designed, according to original under
standing, to effect the consolidation of
all the local utilities. They declare that
there is no intention to combine any
other than the Washington Railway and
Electric and the Washington-V Virginia
companies under one ownership, and
that the object of the Maryland and Vir-
ginia corporation is to provide funds for
these companies to insure their continu-
Gus development. 1t is pointed out that
the money raised by the issue of bonds
is about exhausted and that more Is
Necessary to carry on the plans for ex-
tension and improvement which are now
in hand or in mind. In other words. the
company Incorporated at Richmond is
n@'. II is explained, much holding
company a funding company
This explanation does not satisfy the
public feeling of insecurity regarding the
now Incorporation. Indeed, it rather
serves to intensity the apprehension of
a movement toward overcapitalization.
Why should local companies. doing bust
HESS ibhti GRANTED DN tOu2TeSS,
seek to enlarge their funded basis with
ont the authority of Congress? If the
Washington Railway and Electric Com
pany needs more money to build new
lines ii must get the authority from Con
gpess for those extensions first. If 1t
needs more money for additional cars it
has the right to ask Congress for per-
mission TO increase it's capitalize ton for
that purpose. There is no conceivable
end to which additional capital stock can
be put in the actual operation of the lines
for which it should be necessary to raise
funds by the extraordinary means pro-
posed.
The more the explanation is considered
the more it fails of its purpose of allay-
ing the feeling of insecurity that has
been aroused by the doubtless unwelcome
disclosure of the fact of Virginia cor
Roiation designed to increase the over
head charges on local public utilities. Do
those who are identified with this COM
eination of properties fear to go to Con-
G9ess for permission to increase their
bonded indebtedness? Do they apprehend
that this application will cause an init
mate scrutiny of the financial affairs OF
their companies? Certainly the very act
Of incorporation outside of this jurisdic-
ton suggests that there is no desire tc
do business in this matter with the body
that is constitutonally delegated to ex.
ercise jurisdiction over District affairs.
In the course of the explanation given
by those who are now denying purpose
TO combine all the local utilities it IL
specifically declared that there is no In
tention to consolidate the two traction
companies. II that is the case then the
public has no possible interest in behalf
Of the Richmond corporation. Its only
conceivable advantage to be derived from
lhls new move would lie in the line of a
traction merger yielding universal trans
fers. If that is not contemplated, then
all the public can expect from this pres.
eht .rnaneuver Is q change In the financial
basis of the corporations involved. that
IN the light of experience here and else.
wtere promises more trouble than profit