Evening star., 1922-11-12
BY /. A. FLEMING.

A situation which has long worried
banks and some business men Will DC
! cleared up on Wednesday OF tnit
week, when the principals BACK o'
| Eugene E. Thompson complete the
purchase of the collateral back OF
the Washington utilities notes. no"
held by the Metropolitan Trust Com
pany. n.,,
' For three years and eight montht
banks have received no interest or
this large loan. $1,3s1,ooo' ana tneS
have been compelled by the controiie'
of the currency to cut down the cal
rvinr value of the securities on tneil
books.
It is we'll to have sore spots cau.ef
l;..a hut r,ucb better TO have them
healed without scar. the en-.
that the banks will receive tnS S
tire principal of their leans anu "a.
terest at per cent for the iast .na
vears and eight months Is 1oItuua,s
happening for the fiscal lhs'i'u''o>
t'involved. :,,, 1850.
! This mean that practicSily anf
900 will replace dishonored notes the
the nrice apparently is right near enr
! figures named in this column Nv
the original "feeler" was put ous S
Mr.. Thompson to the noteho'oe' .
| committee. ,,.;,,ti.s Com.
When the Washington Ctlil.less Ctssn LII in
pany undertook i Its ~ eqhI ahe washington
RAILWAY and Electric Company; rths the
ming the price up to 100. i,.id.nd VIII ND
comnany paving I per cent alslu a;s''ts :
# vas probably the plan to dlstrrnate dlsm",te
the shares-after the Ia s.,s
blocking Of the mergers plas ma,
| Rut the market did not holo. nd poi
| nt d;nidends did not last long. ano
~ .tnoi, cnmmenced to decline more
or less rapidly. ~ bor-
! rowing money on notes was
and put over on the banks. ,,,,
! 1t was a clever proposi.af a.f.mii
when the company became IN nracti.
| of interest and principal ano pE.r,
callv defunct generally the oanh
foreclosed on their collateral anu se
cured representation on the a.,
of the road-small compensation Ao'
the big loss. u.dnes.
! But the money to be pam e vii
dav-and Mr.. Thompson says
be-will let them out safe anu SUI.
With hut a memory of the trouple<
that this transaction brought upoA
| them. ,..i&tor
of the company Is coupled WI
fact that opinion favors the nan,
! in it's suit against the judgment "
the utility commission in the mIt'e,
| of nhysical valuation, on "nlch
large amount OF money reHAaS -
escrow awaiting Adjudication u '
| question by the United States gu
preme Court. 49,. ,h,,
There is small question that I'M.
I CYyf
Mr Thompson's clientele and VIII
one or two other interests VINO "ouu
i II it were possible. now MAKE e>et
a better bid for the 27.50o shares o.
T, stock. s,,n-.u.
Court decision will rn, read. muon '
how a lawyer will interpret ~; .,
Even before the decision talk II
! of the manner in which this faree
sup of money, over $3.00o.00o. ane
liable to be $3,5oo,000 before title II
finally fixed. is to be- distributed
Preferred shareholders' Rights.
II Is contended in some quarter,
| that the preferred Shareholders VII
| ask for a share Of this escrow money
| in the event tho suit 10 won.
| There is no possible way tnat M
! tied to per cent cumulative annus
diy;dend. no more and no less. ina
| they are receiving.
What the preferred Shareholder
might do, in the event OF deairlng u
make things unpleasant for the com
mon shareholders. who are last cuI'
| tivatine a taste for a luscious melon
,rn,,ld he to make a fight on the d.
rectory. They have an equal vote
sbare for share, with the common
shareholders plus an additional ~.
ooa shares of preferred stock-So.0o'
shares to $1,000 shares OF the com
mon. ,, ~.
A directory pledged to allow tne tne
| common stock fair return for tn<
vears they have gone without div
! dends and to use the balance OF th<
impounded fund for retiring maturl'
| ties and Improvement OF the system
/ might be elected II the preferree
| stockholders voted as unit, II tne
common shareholders did not ano y
| the Supreme Court decides tnat fepce
is entitled to the money:
All Of which is for the future tc
work out.
(; committee, who are directors OF the
Washington Railway and Electric
| Company. will. if the deal is con
summated. resign. although their sue.
! cessors will probably not be eiecteo
/ before the 29th instant.
/; washinxton-yirKini Noteholders,
| Several bankers who hope to wipe
out an old sore on Wednesday wish
/ the prospects were as good for get
! ting rid of another bad one. largely
charRable to a noteholders' PROPOSE
| tion.
Reference is made to notes Of the
! Virginia Railway Com.
pany (the historic route). and not
only to notes but to common and pre-
! ferred stock in quite large amounts.
AS these securities have been writ
! ten down to on the books OF mos
Of the banks holding them. their 6ook
value indicates the correct posslolh-
ties Of recuperation.
Local Securities,
When the secrecy is over. and the
principals back of Eugene E. Thomp-
SON are disclosed, If ever; when the
policy as between common and pre-
ferred shareholders has been agreed
upon, there is likely to be q pettef
market for the public utility stocks.
Business has dropped of materially.
and declines have been sustained
without good reason therefor.
The feature of the week has been
the weakness in washington Gas
stock, and drop to 81.
we'll, has a hard time going and stay
ing across 80 and holding. Sharehold.
ers have been disappointed because OF
the big earnings and refusal of the
directors to exceed the per cent
dividend rate.
In the meantime the company must
be laying up a surplus. There is no
bonded debt. and at 80 the stock pays
7.05 per cent.
Starts Campaign for Deposits.
The Commercial National Bank will
inaugurate a campaign for more de-
posits with tomorrow morning.