The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-07-09
UTILITIES Law
IS RETROACTIVE
Several Interesting Questions
Involved IN COMMISSIONS
Recent Bond Decision.
CAPITAL TRACTIONLEADS
Old-time Investmeat Is FavoFite ut
11434-Wal Street Sluggish.
Other Financial News.

By 1. A. FLEMING.
The Utilities Commission holds that the
utilities law is retroactive.
1t decided against the application on
the bond issue by the Washington Utili-
ties COMPANY because that corporation
owned the Washington-Virginia stock or
control, a contaminated operation before
the enactment of the utilities law and
La Toilette amendment, tackled on the
appropriation bill.
That this decision will go to the courts
for final adjudication is practically GER
tain. There has been no statement that
the Washington Utilities Company will
appeal, simply that they were prepared
for all emergencies" but the case may
be tested. in its retroactive features in
the Washington Gas Company's now
celebrated case, the ownership OF $50
shares, a majority of over 50 per cent
of the capital stock of the Georgetown
Gas Company.
Probably the matter may be decided
by the cases now in court, especially the
case of the Georgetown Gas Company,
claiming that the charter of the WASH
ington Gas Company gave it no right
to acquire the stock.
The two properties are not competing
l. i
Toilette amendment plainly states its
provisions Of 20 per cent of stock. OF
course this case is sure to be carried to
the highest courts on its merits. but il
would be an interesting proposition il a
decision could be obtained on the merits
Of the retroactive feature Of the utilities
law.
OF course, the experts in the legal fra
ternity may know, but to the layman the
case has interesting features
What Then:
Suppose the courts rule that the Wash
ington Gas Company has no right to hold
the $50 shares of Georgetown Gas, now
up as collateral under its bond issue.
Does 1t vitiate in any way the bond
value? With tangible property valued at
SIS, 10000 even shaded by chunks. there
ought to be ample provision for the small
bond issue of 100000 authorized. but
not all issued. The bonds are certainly
amply secured by the property.
What if a receiver is appointed for the
Georgetown stock held by the Washing
ton Gas Company or in escrow as part
security for the bond issue? The stock
certainly brings no income to the WASH
ington Gas Company as it is. The hold
ing permits of no voice in management.
Ii would seem as if its sale even at re-
ownership hands would not be a serious
matter to the company.
II fault is to be found over the posses
sion Of this stock it might be laid at the
door of the directors that they did not
call a meeting of the shareholders be-
fore pledging the shares and accept an
offer for their purchase. having since
arranged with the bondholders for other
security, and accept the $50 a share said
TO have been offered By some friends of
the Georgetown interests for the entire
holdings. But not having legal title,
could the sale have been legal?
Hold Have No Authority.
1t is understood that the Utilities Com
mission holds that it has no authority
to approve of mergers of any kind: that
it cannot order a merger even in the
event of public policy and interests of
the people suggesting it.
Congress still has the authority, ac-
cording to one of the members of the
commission. and there is small chance of
Congress permitting any merger of gas
or street railroad companies or anything
else without demanding full, round, and
complete payment
Even then the chances are against
Congress granting anything, even should
the commission recommend. 1t is not
with intent to disrespect. but Congress
to Washington. and laws are enacted
here that are put upon the States and
could not be.
1t is a strange sight on the local |
exchange these days, Capital Traction
heretofore staid. conservative, ultra de-
sirable Capital Traction. is used as a spec
ulative leader. Strange. also. to note
Capital Traction leading even for one
days session, in volume of trading. Over
SIS shares were traded in. much of the |
selling having been to one traders ac-
count, but there were other selling
orders scattered throughout the room.
Evidently the break from the former
high prices has induced some liquidation.
In these days utility shares are not ex-
pected to sell much better than on a
s per cent basis: people want more for
their money. although this disposition
has not developed in Washington on any
such scale as in larger cities. l.
Capital Traction opened at lis; 165
shares sold at this price and then Is
at ia rs. then back to ia, to ia "a. and
to lis. apparently with good buying
orders, but they were filled and 100
shares then sold at ia "a, a new low
record price
There was a good market for Wash
ington Gas at IS is at the opening. One
sale was made at IS S-4, buyer sixty days.
but after the early trading IS was the
price persistently bid to the close. /
The buying is just as good as it was
At 81 1-2, and gives every evidence of
continuing. 1t is apparently well backed.
takes stock out of the market--it is a
leader. as usual though. Traction ousted
I yesterday. The rest of the market was
save for sales of Potomac
SIS at 100. and Railway As
1t s. IA. Quotations on railway COM
non were 90 asked and so bid; preferred
q bid and 50 asked.
Interesting.
In view of recent happenings an article
n the June number of the National
Magazine is interesting. Under the cap
ion, THE Science Of Successful Bank
ng," w. c. Jenkins gives the history of
banking in Pittsburgh, leading OF thusly:
1.-The recent consolidation OF two big
,anking institutions, the First and Sec
md National Banks, Is of more thanl
interest to bankers and financial
men generally. 1t Is another evidenced
hat this is the age of consolidation and
Il big financial institutions"
The article then goes on to give the
history of the two solid institutional
merged. showing the humble home of the
FIRST National when organized, and the q
'ig twenty-four-story skyscrapeer in
which the receiver now directs liquida- q
ion. &C. On the face Of the showing
4 good utilities II would seem as IL the .
Clearing House neglected its !
t,fv vhen n perr1ifYed fhse '.strao1,, ola