Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-06-08
CONSIDERA ALTON OF VEXING
LOCAL TRACTION PROBLEMS
Utilities Company Noteholders Are Busy
Discussing Various Plans-Economic
MANAGEMENT Needed,
By I. A. FLEMING.

By I. A. FLEMING.
So far as known there has been no
formal conference among the officials
of banks and trust companies holding
Washington Utilities Company's notes,
defaulted. with a view to arranging
a plan for uniform action. Some
bankers have expressed an intention
to hold off for a. time and await de-
veIopments, although practically
agreeing that as soon as the national
bank examiner makes his next audit
of their institutions they will be
forced to charge off the dishonored
notes.
Probably little more than one
third of the s1.53S 900 of notes. is
owned in this city. without enough
In any one bank to cause the slightest
Inconvenience. Moreover, the loss is
not total by any means.
Receivership Probable.
Some of the holders of these notes
believe that a receiver should and
will be appointed for the Washington
Utilities Company, admittedly unable
to meet it's obligations.
There has also been some talk of test
ing the validity Of the original sales of
the company's shares below face
value. but, while this may be the in
tent of some individuals. the majority
of the local noteholders do not seem
to be so inclined.
The company is credited on the books
of the Washington Railway-and Elec
trio Company as owner of 27,50O
shares of common stock. though it
has forfeited all right to the holdings
and they are in escrow in the Fidel-
ity Trust Company of Baltimore.
If the noteholders agree to the for
nation of the proposed protective
committee and make deposit of their
collateral under trust agreement
this stock would be voted by the
committee.
Only One Way Out.
The only possible chance that the
noteholders have of coming out of
this dilemma whole is in the rehabil-
itation of the Washington Railway
and. Electric Company.
If the District Utilities Commission
will take action to meet the company's
need of increased pay for the service
rendered and the company is able to
resume dividends on the common
stock. with able and conservative
the noteholders. a chance that the
return from the 1880 shares of COM
mon stock will yet liquidate principal
and. perhaps. interest.
There have BEEN some charges that
strict economy has not always played
a part in the management of the
Washington Railway and Electric
Company Perhaps some foundation
for this report may be found in the
admission of one of the officials to
the effect that unearned dividends
have been paid out of surplus At
the same time shareholders do not
like to lose their expected dividends
if they can avoid it, and officials, by
the grace of shareholders, are just
as anxious to make the payments as
the recipients are to receive them.
Should Be Represented.
1t is urged that new representa-
ton on the board of directors of the
Washington Railway and Electric
Company should be accorded to one
or two representatives of the utili-
ties notehoiders. as owners of the
Washington Railway and Electric
Company stock, men who are not on
the board now.
Some of tina preferred shareholders
have shown a disposition to see to
1t that their interests are not for
gotten. They have preferential and
cumulative rights in the matter of
the annual dividend. and they also
have the right to vote, with the pre-
ferred stock $4,000 shares outstand-
ing. as compared with $1,000 shares
Of common.
Some of the most reputable of
Washington's business men are on
the directory of the Washington
Railway and Electric Company. There
also are those on the directory who
would welcome freedom from the
thankless task.
Trend Long Noticeable.
For years they have seen the trend
that has hampered, to put it mildly.
the public utilities of the country,
between the upper and neither grind
stones. labor on one and the public
utilities commissions. jealous of the
peoples rights. on the other.
People have said that the directors
should have prepared for the emer-
gency. but it should not be forgot
ten that the utility commission ex-
acted increased service and the labor
demands were larger.
II there is fault it would seem to
be in the direction of the payment
OF unearned dividend. and the ma or-
1ty OF the directors. not practical
railroad men, looked for rapid recov-
cry of earning power. not liking the
precedent of reducing dividends
Would Have Enjoined Payment.
Had the common dividend been de-
clared in May the preferred share
holders. or at least a sufficient num-
Der to have made a respectable show
ing. would have enjoined the pay
ment, in the interest Of conserving
their rights.
The hope of the noteholders and
shareholders as well lies in obtaining
sumcient revenue to make ends meet
partial relief is lingering
Strict Ecannmv Naadad