Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-07-04
UTILITIES COMPANY
HAS A NEW PLAN
Another Proposition May Be
Adopted in Lieu of S1O,-
OOO,OOO Bond issue.
COMMISSIONS RULING NOT
LIKELY TO BE CONTESTED
Corporation Must Eliminate Vir-
ginia Railway Holdings in Sub
hitting New Proposal.

\ new financing plan, designed to carry
the operations Of the mammoth concern
over long period of years. probably will
be adopted by the Washington Utilities
Company In lieu of the -million-dollar
bond issue proposal, which was rejected
yesterday by the public utilities commits
sion.
1t was learned today that officials of
the corporation. anticipating an unfavor-
able ruling by the utilities board. already
have taken up informally consideration
OF new plan for financing the immediate
and future needs of the company.
1t Is regarded as almost certain that
this will be the course resorted to rather
than that the case should be contested in
court There is said to be a doubt as to
whether q decision by the commission
can be appealed from.
AS the matter stands. the Washington
Utilities Company has the satisfaction OF
knowing that its holding Of less than 20
per cent of the tai stock of the Wash
inSton Railway and Electric Company Is
not held by the commission to be in viola
ton Of the La Toilette anti-merger act.
Property May Be Listed.
This property, therefore, may be listed
in the mortgage given TO secure any new
bond issue proposal the company may de-
eide upon. Merits Of the proposal rejected
were not in fact, considered by the COM
mission, for the reason that that body
decided that the holding by the utilities
company of more than 20 per cent OF the
securities of the Observation-Disclosures
Railway Company constituted Vloiation
of the anti-merger law.
In submitting a new bond issue pan.
the corporation will be required to elm
mate the securities of the Washington
Virginia Railway Company If 1t hopes 10
have the plan approved
Should the scheme to be presented be
held by the commission not to be IN NO
lation of the anti-merger act, the Dues
ton of merit of the proposal itself then
will be taken up.
Gardiner L. Boothe. attorney for The
Washington Utilities Company, and other
officials of the corporation could not &c
located today, and no intimation has
been given as to how soon new BOND
issue plan may be presented.
Decision on Railway Holdings.
The decision Of the commission relating
to the stock of the Observation-Disclosures
Railway Company. which, it is declared.
is held in violation of the anti-merser
act. is as follows:
by the counsel and other officers OF the
Washington Utilities Company that the
transfer of stock Of the Washington and
Virginia Railway Company was entirely
conSummated and completed prior to the
date of the so-called anti-merger law,
the commission nevertheless entertalnS
grave doubts in the matter. so far as
the jurisdiction of the commission is
concerned. In other words, while 1t
may be true that the merger was con-
summated within the state of Virginia
. L.
state of Virginia, the mere fact that
the certificate of the commission
is necessary before the purposes of the
mortgage can be put into effect is an
indication that the merger has not been
completed until such certificate by the
commission is given. and, as obviously
and by the terms of the mortgage the
merger is not effective without the pos
session and absorption of more than 20
per cent of the capital stock of the
Washington and Virginia Railway Com
pany by the Washington Utilities Com
pany, such merger and absorption seems
to be in conflict with the most liberal
Interpretation Of the anti-merger law.
Certificate Held Necessary.
1.-The language of the mortgage is to
the effect that certain of the proposed
bonds shall be authenticated and deliv-
cred from time to time for the purpose of
acquiring ard canceling certain shares of
the preferred and common capital stock
of the Washington and Virginia Railway
Company, and it would be one case il the
bond issue had been made prior to March
L. 1913 1t is quite another case when we
find that the bond issue had not been
made prior to the passage of the anti
merger law and the public utilities act,
and that it is necessary for the petition
ers to obtain the certificate of the public
utilities commission before said bonds
can be issued.
The commission has in mind the fact
that when, in November. 1912. it became
known that a merger was proposed in
volving the absorption by a foreign pub
lie utility or holding corporation of one
or more of the street railway lines in
the District of Columbia. the Commits
sioners of said District instituted legal
proceedings to prevent such an act.
with these facts in mind. and when
called upon to authorize the very thing
which the anti-merger law forbids, the
commission feels constrained to Withhold
it's certificate of the bond issue requested
by the petitioners, for the reason that
il finds such issue to include as essential
parts thereof the acquisition and hold
ing of public utility stocks, in violation
of section IL of the act of Congress APP
proved March 4, 1913, Public Ne 49,