The Washington herald., 1913-09-14
MERGER Terms
BY GEORGETOWN
Willing to Consolidate on Ap-
praisement Of Two Com
panies but Not to Sell.
BOOM IN NEW YORK LIST
Canadian Pacific, Reading, and Steel
Leaders-Washington Chapter
Host to 400.
by ]. A. FLEMING.


Utilities Commission as the basis for a
sale of the corporation to the Washing
ton Gas Company. The Georgetown Gas
Comnanv is not for sale, but the Off
ciaIs are perfectly willing to go into a
consolidation movement, following an ap-
praisement of the two properties by the
same appraisers.
There is a decided difference between
the two propositions. The Georgetown
interests want a fair valuation on ooth
plans, and on that basis are willing to
trade stock for stock.
Financial Washington seems to con-
slider the proposition a fair one and can
see no radical obstacles in the way or
carrying out the project. 1t seems to be
in the interest of the whole people, and
especially advantageous TO that large
population over the creek. A reduction OF
n per cent in the cost of gas is saving
that commends the proposition more and
more. and in objeCting to it, on an So
cent basis. the Com nissiOners would be
taking money from the pockets OF the
people of the District.
Admittedly a fact, vet il does not ap-
peal in the slightest to equity and square
dealing. that Congress can, at a stroke,
make illegal that which has heretofore
been legal or at least unquestiOned. No
State can undertake such action. Con-
gress has the right and the minute the
La Toilette amendment was enacted and
the appropriation bill signed by the
Preside that which was legal became
Illegal. Tie Constitution gives Congress
this right. but the case in point the hold
ing OF Georgetown shares by the Wash
inEtOn Gas Company in excess of 20 per
cent of the entire capitalization. has not
been passed upon by the Supreme Court.
congressman make laws here, while in
their home towns mergers and consolda-
tions have their warmest cooperation.
Eank Statistics.
The Columbia National Bank earned
$3.50 from September 4. 1872, to August
= 1913. Net funds increased very
slightly: the bank earned L6O per cent on
net funds 6.S7 per cent on capital and
surplus and 1850 per cent on capital
The Farmers and Mechanics earned
81. .C:;9, net funds increased. $40, ,00G the
bank earned l.S9 per cent on net funds,
a-0i per cent on capital and surplus, and
1855 on capital.
The District National Bank earned SS5,
N9. Net funds increased $26j. 900. the bank
earned l.6O per cent on net funds, 6.9l
per cent on capital and surplus, and Ss5
per cent on capital. or 2.95 per cent above
dividend requirements.
OF the Baltimore banks the best earn
ingS were those of the Citizens Bank
1921 per cent on capital The Riggs Ma
tional OF Washington, made 32-53 per
cent on capitalization.
The L. r. Melon.
Wall Street gave stocks another twist
Saturday, sending the leaders to much
higher levels and doing it easily. There
was nothing in the way of news regard
ing the supposed to be ripening melon
on the Union Pacific vines. There is no
question of the size of the melon, but
there is some uneasiness regarding the
cutting and the destination of the fruit
If not cut.
There is no question OF the amount of
money available for cash distribution.
Judge Lovett himself stated that the sale
OF Southern Pacific already has netted
his company SIS, 600 900. But an impOr-
tant point to bear in mind is that most
of this money represents borrowed cap
ital, not profits out of business or specula-
tiOn. When the Union Pacific acquired
the Southern Pacific stock, it issued
bonds wherewith to make its successive
purchases of that stock. The transac-
ton proved highly profitable, for the
company has made a clean profit of
about S2l,000 coo. That profit could legiti-
Inately be distributed among the share
holders as a melon. but should the man.
agement decide to distribute more than
that amount out of the proceeds of the
sale it would subject itself to just crit
is.iSm. Sound finance would demand that
the remainder be reserved for either
property expenditures or redemption of
debts The Union Pacific has outstand-
ing .. $50 900 shares of common stock. Pro
rata distribution of $2O,0O0O00 would mean
a cash dividend Of approximately so
share. Some conservative observers think
that IL a melon is cut it will be limited
to the fund which could be legitimately
used for that purpose.
Booming the Stock List.
Union Pacific stopped at 1601s yester-
day, an advance for the week of $3.50
a share. and the talk on the street was
for much higher figures. The closing
was nearly point under the high, which
was practically another two points gain.
Sales all told for the two hours were
SS5 600 shares, much more than the aver
age five hours session of few weeks
ago.
Most extravagant expressions were
heard as to the possibilities for the ful-
ture of Union Pacific, and the selling
seemed to be entirely to the credit of
profft-takers, the advance having inspired
a desire among the hungry for some
cash.
Steel followed the pace beautifully. al
though there is no report of melons
ripening on this stalk. The stock ad-
vanced to 6614, and it did not go back a
fraction from the high.
Reading, ashamed of being laggard in
the midst of Fridays strength, led the
list in the advancing movement with
nearly four good points betterment. 1t
was top at 1874, and closed 1861.
These three stocks were the leaders
Of the list. There were other gains, and
the entire market was firmer, but the
advances were otherwise fractional to a
point, Chesapeake and Ohio, st. Paul,
and Northwestern showing strength
while Canadian Pacific sensationalized
with 55t rise. Sugar lost 4 point, and
New York Central IL
The short interest in Steel is big and
has not tried to cover as yet
Business Better.
The general determination to shake of
letI:argy as soon as the tariff bill passed
seems to have made business better, ac-
cording to the reports OF the mercantile
agencies. There is no wide expansion,
nor any disposition to go slow either,
but a trend in the direction of better
times, more confidence and less inclina-
ton TO watch Congress.
The clearings are large, money is com.