Evening star., 1919-09-05

AS collateral security for such ad-
vance these individuals agreed to as
sign to the trust company all Of the
contracts and options which they
then held for the purchase of the
securities to be transferred by them
to the new company and also all Of
est in or to any of the Sc
which were then owned by them
'On June 5. 1899. articles Of in
corporation of the Washington Trac-
tion and Electric Company were filed
OF Norfolk, Va. and a charter secured
from said court. Commissions Ex-
hihit. No. 1. and Nelson testimony.
page 2s7s) This company on June il.
1899. executed mortgage to the
United States Mortgage and Trust
of the principal and interest on an
issue of s20,000.oo0 of its bonds
and deposited with the mortgage the
securities of the several companies
then held by Stevens. Crosby and Lieb
Testimony. page 2373). The transfer
of the underlying securities and the
issuance to the United States Mort
gage and Trust Company of the stocks
and bonds of the Washington Traction
and Electric Company. in accordance
with the agreement of April 30, 1899
(see above). was authorized in three
letters to the United States Mortgage
and T2,st Company dated June 13,
1899 Commissions Exhibits 81, 55,
56). Upon receipt of this authority,
the United States Mortgage and Trust
Company appears to have closed the
several loan accounts for the advance
ment of money to purchase the under
lying securities, and opened new
1Y1fS
hibits s6. 81. SO, 50 and 34).
Started in Business.
The Washington Traction and
Electric Company then started in
business by opening up an investment
account comprised Of stock Of the
subsidiary companies Of the par value
of s5.77o.5oo: bonds of the face value
of s1,327,ooo promissory notes of the
face value of 100000. In considera-
ton of the above. plus cash to the
amount of $1,08O,000, the new COM
pany issued it's capital stock for
s1o,ooo,ooo. and AZ per cent first
m9rsgage 1To,'fns; en,ho bonds & for .ss12.ooo.ooo
sion's exhibit No. 1889
1T will thus be seen th9 $4,000, 900
OF new securities were issued for GER
tam STOCKS, ponds, notes and cash, the
face value Of which aggregated So
377,5o0. Taking the bonds and notes
at par. and assigning the stock a rea.
sonable market value. using the high
est market quotations prior to Janu-
ary /, 1899, this $S.377,500 becomes
S9,S26,45l25. Therefore, it appears
to be conservative to say that $685.
451.25 was fair and reasonable esti-
mate of the then exchange value OF
the assets acquired by the Washing
ton Traction and Electric Company
upon which it fioated $22,000,e00 OF
it's own securities.
"A more liberal treatment in an
praising these securities acquired by
the company may be stated, however.
by substituting the highest price of
record. whether that be found in the
market quotations subsequent to jan
uary /, 1899, or recorded as a private
sale as evidenced by transcript of GER
tain accounts on the books of the
United States Mortgage and Trust
Company. ignoring. however, the ex-
traordinarily high prices paid in a few
instances for small blocks Of stock
acquired after the formation of the
traction company. Proceeding in this
manner, a total of $12,252.54S51 is
obtained. as shown in schedule "a"
n;Hara,.a - 40 zA1 Ak