The Washington times., 1913-07-04
BOND RULING HITS
UTILITIES CONTROL
Commissions Ruling Can Be
Contested in Courts, If the
Company So Decides.

Under the ruling OF the Public Utili-
ties Commission. rejecting the plan OF
the Washington Utilities Company to
issue N0.000,000 worth of fifty-year b
per cent gold bonds, the holding COM
pany will find II impossible to obtain
permission for any bond issue scheme
which contemplates the control Of any
other public service corporation in the
District being vested In the Utilities
Company.
Attorneys and officials of the holding
company probably will not decide for
several days whether to contest the
commission's ruling in court or submit
new bond issue plan that does not
conflict with the anti-merger act The
company could go into court and con-
test the ruling on the ground that the
commission did not have jurisdiction In
the premises. but the concensus Of opin-
ion today seems to be that but little
would be gained by this step.
Company Is 0verruled.
The commission rejected the bond is
sue on the ground that the bonds were
to be exchanged for stock of the Wash
ington- Virginia Railway Company Of
which the holding company had ac-
quired more than 20 per cent, giving In
payment temporary certificates of in
debtedness pending the approval of the
bond Issue scheme; Attorneys for the
the Washington Utilities Company and
the Washington-Virginia company had
been contaminated before the enactment
OF the anti-merser act. and. therefore,
the tn law did not apply: The commission.
Prior to the passage of the anti-mer-
ger law the holding company owned or
controlled considerably more than 20 per
cent Of the stock of the Washington
Railway and Electric Company. To
Ia
duced its holding Of Washington Rail-
way to $2.9oo,ooo, which is less than
20 per cent.
The decision Of the commission will
ting a plan which takes into considera-
ton the stock of the Washington Rail-
way and Electric Company, but leaves
out that Of the Washington Virginia
Company, unless the latter should be
relieved to less than % per cent.
The decision means that the Public
utilities Commission will not approve of
any bond issue which takes into consid-
Grafton the stock Of any other public
service corporation where more than 20
per cent Is held by the Utilities Com
pany. This virtually means that the
company must eliminate the stock Of
any company which II controls, or seeks
TO control, In the bond issue plan.
To Pay Floating Debt.
The proposed bond issue, which has
been rejected. contemplated. first that
1888 900 face value Of the bonds were to
be used to take up the preferred and
common stock OF the Washington-Vir-
ginia company under the merger agree
ment, and. second. that bonds up to,
but not exceeding. the face value Of
$&O.0O0, were to be delivered to the
ut'lities Company from time to time on
deposit with the trustees under the
mortgage in blocks Of not less than
800 shares each Of the common stock of
the Washington Railway and Electric
Company.
The money received from the sale of
these bonds was to be used to pay of
the floating debt of the holding COM
pany. amounting to about 81. 700. 600.
Three million. five hundred thousand
dollars of the bonds were to have been
retained by the trustee for the pur-
pose Of refunding. paying. redeeming,
or purchasing the under
lying bonds secured by the roads owned
bv the Washington Utilities Company.
The remainder Of the bonds were to
have been used during the fifty-year
period for improvements, etc.