Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-03-20
AIMS TO BREAK UP
UTILITIES COMBINE
Bill Sent to Congress Barring
Street Railway Control
of Power Company.
ELECTRIC CURRENT USERS
UNDER UNJUST BURDEN
Public Service Board, Says They
Pay the Dividends on Stock
of Railway

An absolute enforcement of the rela-
tions existing between the Washington
Railway and Electric Company and the
Potomac Electric Power Company, a
subsidiary corporation, is provided for
In bill sent to Congress by the public
utilities commission today.
The legislation recommended is the
Outgrowth of AN investigation made by
the commission of the financial status
and business methods of the former
concern. If approved by Congress it
will require the street railway company
TO dispose of So. 100000 worth of stock
of the electric power corporation.
While not mentioning either concern
specifically. the bill provides that it shall
be unlawful for any street railway COM
pany in the District to own, control or
hold. directly or indirectly. stocks or
bonds of any company engaged in gen
Grating or supplying electric current for
light OF power for sale in the District
and vice versa.
Bars 1nterlocking Directors.
II also contains a provision directed
toward the breaking up of so-cailed I'm
terlocking directorates.' section eight of
the proposed law. stpulating that mo
person shall serve on the board of di-
rectors of more than one public utility in
the District of Columbia at the same
time"
In a letter to Congress explaining the
purpose of the measure the commission
refers to the Investigation of the affairs
of the Washington Railway and Electric
Company during the course of which. it
is stated. facts are developed showing
pt al ,1a1
public interests resulting from the own
ership of the stock of the Potomac Elec-
trio Power Company by the railway
company
Other conditions deemed to be unfa-
vorable to the public interests in the af-
fairs of the company may be corrected
by the commission without additional
legislation 1t is stated.
Other Corrections Proposed.
X the time of submitting to Congress
a report on the results of the irtvestiga-
ton the public service board announced
that it would recommend legislation de-
signed to cure the evils complained of.
In view Of statements contained in the
communication transmitted to the SEN
ate and House today it is evident that the
commission considers it has the power to
correct number of alleged irregularities
contract under which a two-thirds in
terest in the Great Falls power site was
intended to be sold by the Washington
Railway and Electric Company to the Po-
tomac Electric Power Company for
100000 of the latter's stock.
II is claimed by the commission that
although the transfer of this interest
has not been fully consummated. the
stock consideration was delivered to
the railway company Immediately upon
the execution of the contract of sale,
and the company has been drawing
dividends upon 1t since.
Price Advantage to Railway.
the examination is also said to have
revealed the fact that the Washington
Railway and Electric Company was
buying all its electric power from the
Potomac Electric Power Company un-
der a contract which placed it upon
an entirely different basis from other
consumers. and which left the price to
he paid by ii directly in the control of
the directors of the two companie
which were composed of the same in
dividuaIs
The report charged that a large part if
not all. of the dividends of the Washing
ton Railway and Electric Company were
being ultimately paid ny the consumers
Of electric light and power in the Dis
trict. and these dividends were being paid
on stock issued for property which had
apparently never been appraised or valued
by any process of fairness or certainty.
1t is stated that the commission feels
that 1t has the power to correct the book
keeping and contracts both of the rail-
way am electric power company, and to
force both to keep their books in such a
way that the exact cost and price of
power furnished shall be ascertained and