The Washington times., 1914-03-08

per share. and it is to be taken over
by the Washington company at
S155; that is, the Georgetown stock
is given valuation of $500 to every
500 of face value. is this an ax-
cessive valuation?
The gas people say it is rot. The
Georgetown company has bond is.
sue Of $525,000, which of course
underlieS the stock. Its capital OF
5000 shares, at S155 Per share
would represent s93O,UOO r..ore: total
recognized valuation, S525, 200 in
bonds, plus S930,0OO in stock, or
$1.455,000. The gas officials declare
that no imitation is involved. The
Public Utilities Commission has not
PASSED on The point. Its valuation of
the property has been ordered by
Congress, but has not been made.
Il would seem that if that valuation
is to DC made, it ought to be made
before a purchase at such high
price should be authorized by Con-
eress. If Congress ono, determines
that the valuation Of the George
town company is s1.455,G0O, it may
: well be doubted whether subsequent
action of the Public Utilities Com
mission can reduce it below that fig
ure, as basis for earnings and rate
making.
The pending legislation seems to
provide that the stock Of the George
town company is to be cancelled as
soon as it comes into possession of
, the Washington company. But there
is some question On this point. Strip
ped of some of it's verbiage, the pro-
! vision in the District appropriation
bill is:
"Inasmuch as the Washington
Gas Company, subject to the approx
al of Congress, has offered to pur-
chase 2,470 shares of the George
town Gas Company now outstanding
for s155 per share, and thereby &C
olire, with the 1880 shares now
held by the Washington company,
the whole capital stock of the
Georgetown company with intention
OF canceling and retiring said stock,
the said Washington company is au-
Ihorizcd to purchase AND HOLD
OR RETIRE so much of said stock
Of the Georgetown company at said
price as the holders are willing to
sell, and to condemn and retire the
remainder of said shares which it
may he unable to purchase for said
price, and that upon the pu, chase or
condemnation Of said shares the
Georgetown company shall become
forthwith dissolved and merged into
the Washington company, with all
its properties, franchises, etc; pro-
vided, that should any owners of
outstanding Georgetown shares re-
fuse s155 for them, the Washington
company may file suit and condemn
these shares"
1t will be noted that the shares of
the Georgetown company now out
standing are to be taken over at $155
per share of S25 face value. Are
they worth it? Does the fixing of
that price, by Congress, on PART
Cf the Georgetown shares, IN effect
fix the same price on ALL the
Georgetown shares?
These are questions which public
and members Of Congress
have been investigating, and on
which there is not agreement be-
tween them and the Washington
Gas officials. President Reeside said
to The Times today that the shares
held by the Washington
in the Georgetown COM
rany cost the Washington company
an average of $40 per share, twenty
years ago; and he insisted that the :
passage of the pending legislation
would not give any presumption that
they are worth S155. He declared
fatiy that the Washington company
has no purpose TO initiate the valua-
ton OF the shares already held BY !
it. There is, however, acute differ
c2ce of opinion as TO the legal effect
of the proposed legislation in this