Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-07-03
HUGE BOND ISSUE
PLAN IS REJECTED
District Commission Acts on
Scheme of $1O,OOO,OOO
Utilities Company.
SECURITIES OF CONCERN
ARE LISTED IN MORTGAGE
New Proposals Will Be Submitted to
Officials for Sane
tion.

- UD1u issue pro-
posal Of the Washington Utilities Com
pany' the scheme by which the corpora
ton seeks to direct It's financial opera
tons for the next fifty years this after
noon was rejected by the public utilities
commission of the District OF Columbia
The commission holds that the Wash
ington Utilities Company can hold the
s2sOo.oo0 worth OF Washington Rail-
way and Electric Company stock un-
der the anti-merger law. but that it
cannot approve the bond issue, because
the Washington Utilities Company has
acquired or seeks to acquire more than
20 per cent OF the common and prefer
red stock of the Virginia
Railway Company. which Is prohibited
by the anti-merger act.
Securities Are Listed.
These securities were listed by the
Washington Utilities Company in the
mortgage filed with the commission for
consideration in connection with it's ap-
plication for authority to issue the s1O
COCO worth of bonds.
The decision Of the commission will not
prevent the Washington Utilities Conn.,
pany from presenting a new bond issue
plan which will not take into account
the stock OF the Observation-Disclosures
Railway Company more than 10 per cent
of which, the commission holds. is owned
by the corporation in violation OF the
anti-merger act.
Say Law Has Been Met
At the recent hearing before the COM
mission officials of the Washington
Utilities Company stated that that con-
Germ, prior to the going into effect of
the anti-merger law. owned a large
amount Of the stock Of the Washington
Railway and Electric Company. A
sufficient number of shares of this
stock subsequently was disposed of to
| reduce the holdings of the company to
| less than 20 per cent. the limit nxed
| by the anti-merger act, II was stated
| 1t was further commended by the cor
poration representatives that Congress
| did not contemplate that no stocks or
bonds OF local public utility could be
held by another foreign or local pubic
utility corporation, the provisions of
| paragraph "a Of the act being cited in
support Of this contention.
Proposed Mortgage.
The proposed mortgage, which the
commission was asked to approve. pro-
vides for the issue Of per cent bonds
not to exceed $1O.000.0oo face value In
fifty years. as follows:
First-Nine hundred and ninety-eight
| thousand dollars face value of these
| bonds are to be used to take up pre-
| ferred and common stock Of the Wash
der the merger agreement between that
| concern and the Washington Utilities
| Company.
| Second-Bonds up to but not exceeding
the face value Of $o.950OO are to be de-
| livered to the Washington Utilities Com
pany from time to time in future. on de-
| post with the trustees under the mort
| gage in blocks Of not less than 500 shares
| each Of the common capital stock OF the
Washington Railway and Electric Com
pany up to but not exceeding the PAL
value Of $2.95O.0OO.
The money received from the sale OF
| these bonds will be used to pay on the
| floating debt Of the company, amounting
| of the purchase OF the common stock OF
| the Washington Railway and Electric
Company, now owned by the Washington
| Utilities Company, and owned by thai
| merger law.
Trustee to Hold Bonds.
Third Three million five hundred thou
sand dollars Of said bonds are to be re-
tanned by the trustee for the purposes OF
refunding, paying, redeeming, exchanging
or purchasing the underlying bonds Sc
cured on the roads owned by the Wash
ington Utilities Company. as follows:
One million dollars for the bonds Sc
cured on the Falls Church division, for
merly known as the Washington, Airing
ton and Falls Church Railway Company
Two million five hundred thousand dol
| lars for the bonds secured on the Mount
Vernon division, formerly known as the
Washington, Alexandria and Mount Ver-
non Railway Company.
Issue of Remainder.
Fourth: The remaining bonds ,s2,-
| So, OOO) are to be issued from time to
time during the period Of fifty years
| for which the bonds run, for acquisi-
| TONS betterments, extensions and i'm
provements and new construction, pro-
vided that said bonds shall be issued
| only at the rate Of $3.50, par value Of
| said bonds. for each $1,000 of esti-
mated cost to the Washingtn Utilities
Company for said acquisitions, ex-
tensions, betterments, improvements
and new construction.