The Washington times., 1912-11-20

In 1899 Frederick C. Stevens and asso-
ciatcs acquired control OF the Metro
poSsan Railroad Company, the Sub
urban Railway Company, and the WASH
ington and Glen Echo railroad, and two
then existing electric lighting COM
PaniGs, and organized the Washington,
Traction ard Electric Company, with u
capital of Sl2,U0C0o0, to hold the seCuri-
uos of these and the other companies
mentioned in the bill. In 1900 Congress
passed bill authorizing general con-
solidatiJn.
1t is declared that of all the companies
consolidated under authority Of that act
the only ones that ever paid any divi-
dends were the Metropolitan and .hc
columbia. while most of the others rep
resented practically no market value in
thelr stocks, some of them not even
earning enough to pay their running ex-
penses and fixed charges.
IN November. 1901, a plan of reor-
xanization was adopted. A collateral
mmust mortgage of the Washington
traction and Electric was foreclosed.
and the Washington Railway and
Electric purchased the underlying as
sets, and issued or had authority to
Issue; anS .slo;SOo;ooo 06 1000 of per cent bonds
that time Washington Traction and
Electric bonds were worth less than
SbO on the 500. and the holders of
these. bonds received for each 81. 900
pond $3.50 OF Washington Railway and
Electric bonds, $3.50 in its preferred
stock. and 5000 in common stock. In
addition. ecch stockholder of Wash
ington Traction and Electric for each
Sioo snare OF stock, on the payment
OF ~ Tor a share, received 50 in pre-
ferred stock and $50 in common stock.
This common stock, the bill will al
lege, had little or any market value,
In In 1909 It sold as low as adm as
tween lola and 2s19. in 1906 between
an and AN; in 1906 between 37&
and ~; in 1907 between 20 and Az
In 1908 between l9 and 40; in 1909 be-
tween 40 and 4s; in 1910 between 81
and AZ in January. 1911, 1t sold below
30, and from that time owing, II is
alleged to the manipulation which
the bill Will describe. 1T rose steadily
from 35 to As in June, 1911, and thence
until 1t finally reached IS.
The bill declares fatty that this rise in
quotations Is largely in excess OF real
value.
Alleged Manipulations.
At this point the bill takes up and
describes the alleged series OF manipu-
lauons by which it is alleged that some
OF the directors and officers OF the
washington Railway and Electric have,
for more than year, been engaged In
plan TO raise the market Quotations and
obtain control Of q majority, OF the
William b. Hibbs, a director, are spe-
cifically named, in connection with this
series Of transactions.
The bill charges that they now con-
troll majority of the stock for the
purpose OF turning it over at the ex-
cessive quoted values to the Washing
ton Utilities Company in exchange for
its stock or bonds, or both; that these
men own or control the Washington
Utilities Company, and that they have
made a personal profit for themselves
in these stock transactions. The names
o. all stockholders OF these corporations
who have engaged in these transactions
are not known, but the bill declares that
those chiefly so engaged are Messrs.
Hibbs and King
The bill next describes how the Wash
ington, Alexandria and Mt. Vernon and
the Washington, Arlington and Falls
Church railways were recently merged
into the Virginia Railway
Company. and points out that Clarence
p King Is president and director In
the Washington Virginia Railway Com
pany. Then the ACKNOWLEDGEMENTS
Railway Company was formed and
rapidly expanded its capital, the shares
being disposed of either for money or
presumed equivalent in property.
Messrs. King and Hibbs being in con-
troll of this corporation also.
The Maryland-Virginia recently
changed It's name to the Washington
Utilities Company, and increased Its