Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-06-30
Application of Washington
Utilities Company Rejected
by Utilities Commission.
MUST AWAIT DECISION
UNDER ANTI-MERGER LAW
Transfer of Stock of Washington
Railway and Electric Company
Under Consideration.

The public utilities commission toda Y
declined to grant the application OF the
Washington Utilities Company for au-
thority to issue slO.OOo.OOO worth OF
bonds. pending ..ecision by the COM
mission whether or not the holding Of
certain stock by the big corporation is
in violation of the La Toilette anti-mer-
Ger law.
The securities referred to consist OF
about . per cent OF the stock of the
Washington Railway and Electric Com
pany, purchased before the anti-merger
law went into effect, and other certificates
of Indebtedness. which were to be trans
ferred to the corporation under the
terms of an agreement reached last No
vember by which that concern and the
Washington and Virginia Railway Com
pany were amalgamated.
Engineer Commissioner Harding. chair
man Of the utilities commission. which
today gave a public hearing on the ap-
plication of the corporation for author
ity to issue $l0,OOO,OU worth OF bonds.
stated that the bond issue plan will not
be considered until the question Of the
application OF the anti-merger law to the
case has been decided
Provisions Of the Law.
ing of the stock of local public utility
by another corporation. In the proposed
mortgage. which provided for the issue
Of per cent bonds not to exceed $1O.-
600. 900 face vale in fifty years. the stock
referred to Is pledged as portion OF the
security for the bonds.
Should the commission decide that this
stock is held in violation Of the anti
merger law, the corporation probably will
be forced to work out new financing
plan which will take no account OF the
securities In question
Gardner L. Boothe, attorney and one of
the officials Of the Washington Utilities
Company, and Norman Grey OF Camden
n. j., vice president of the concern. con-
tended that the holding Of the stock OF
the Washington Railway and Electric
Company is not in violation of the anti
merger law. since these securities were
acquired by the coropration prior to the
passage of the law.
Both took the ground that the law
is not applicable to the proposition be-
fore the commission with respect to
the bond. issue application. and that. il
applicable in any way, paragraph 81 or
the act creating the public utilities
commission unquestionably gives the
commission power to authorize the
holding of the stock referred to and
the transfer under the mortgage.
Doubts Regarding Stock Transfer.
Commissioner Harding did not appear to
be altogether satisfied with the statement
that the merger Of the Washington Ctilf-
ties Company and the Washington-Vfr-
ginia Railway Company last November
had completed the transaction regarding
the transfer and cancellation OF stock,
and asked a number of questions indicat-
ing that the commission is in doubt as to
whether the stock actually had been
transferred prior to the going into effect
of the anti-merger law.
The chairman of the commission also
directed a number of inquiries to the
corporation company heads as to the
status Of the stock acquired from the
Washington Railway and Electric Com
pany 1t was explained that this stock,
while owned by the Washington Utilities
Company. is held by the United States
Mortgage and Trust Company of New
York, as trustee.
Present at the Hearing.
In addition to the utilities company Of
ficials there were present at the hearing
Clarence P. King. PRECEDENT of the Wash
ington Railway and Electric Company.
and j. j. Darlington, counsel for the lat
ter company. Mr. Darlington told the
commission that the evident policy OF
Congress was that not more than 20 per
cent of the stocks of one utility corpora
ton should be held by another
He expressed the opinion that the
anti-merger law was not applicable In
the case under consideration. since the
Washington Utilities Company holds
less than 20 per cent Of the capital
stock of the Washington Railway and
Electric Company
If the commission decides that the
law is not applicable 1t probably will
hold another hearing at which time
the merits Of the bond issue plan pro-
posed will be considered.