Evening star., 1922-11-05
100000 May Be Involved
in Observation-Disclosures
Names Withheld.
TRANSACTION is CALLED
AN "INvESTMENT" MOVE
Huge Block of Stock Was Col
lateral for Note of
$1,50O,0O0.
BY I. A. FLEMING.

for the sale of block of 27.500 shares
of the common stock of the Washing
ton Railway and Electric Company.
for investment purposes only" with
no explanation as to the buyers or the
price paid.
Crane, Paris & Co.. investment
bankers. through Eugene E. Thomp-
son. a member of the firm. represented
the buyers. The transaction has been
under consideration for many days.
1t is possible that close to $1.s00.o00
was involved IN the transaction and
that New York capital. with perhaps
some local capital, will be employed.
Banks Real Sellers.
Mr.. Thompson, who closed the tran
saction for the purchase. has also
been a very heavy buyer Of the COM
mon stock on the local exchange for
many days. although there is no
knowledge that he has represented the
Investors" in the exchange transac-
tions.
Two other interests were after this
stock and would have taken IT had
it not been bought by the interests
represented by Crane, Paris & Co. The
Capital Traction Company. it is author
itatively stated. is in no wise concerned
in the transaction.
The real sellers of the large block
of stock are Washington banks. that
assumed title to the property in
protecting loans made to the de-
funct Washington Utilities Company,
through foreclosing on the stock,
which was up as collateral back of
note for $l,5oo.00o for one year
This company. formed in 1919 as
the vehicle for the unification OF the
traction systems of the city. and per-
haps of the electric and gas light
ing corporations as well. found itself
choked off by the La Toilette law pre-
venting one corporation owning 20
per cent of another corporations
stock.
Foreclosure Recalled.
The 1880 shares Of Railway and
Electric common stock had been
taken over at all kinds of prices.
the highest being 500 a share for
$500 shares from Kuhn, Loeb & Co. Of
New York.
So long as the Utilities Company re-
ceived dividends from its holdings
in the Washington Railway and Elec-
trio Company it was in a position to
pay its way; when they stopped the
company was in trouble.
The note for which the Utilities
Company put up the 27,5o0 shares OF
stock was disposed OF largely to
local bankers, 80 per cent at least,
with Baltimore and New York banks
holding the balance.
From time to time the notes were
extended, and in 1919. the company
being in default as to interest and
principle. a protective committee was
named. with r. n. Harper as chair
man. Foreclosure resulted and Mr..
Harper bid in the stock in the auc-
ton at New York city.
Directors May Retire.
Following the acquisition OF the
stock the protective committee Sc
cured the election of its members.
practically all of them, on the board
way and Electric Company.
Now having disposed Of the block
of stock they will probably retire,
but it remains to be seen whether
they will so now or wait until the
annual election in January.
1t is also a matter for future
answering whether the new invest
tation on the board of directors with
Messers. Allies, Norment, Bell, Gar
flnkle, Blair and others not directly
interested with the noteholding
banks.
In the latter group are R N.
Harper. George w. White. John
Poole, w. T. Galliher. c. w. Warden
and w. Z. Cadwallader Of this city.
and Harry b. Thorne Of New York
city, and Judge Henry D. Harland Of
Baltimore. Md, each representing =
bank.
A few weeks ago it was reported
that negotiations had opened for the
purchase of the stock, through a
query for price, but the effort, con-
SummateQ yesterday. la1leu at tnlS Tune.
1t is understood that this large
block of stock will be kept intact. The
rumored price on former negotiations
was somewhere around $50 a share
Market value has been close to- that
figure, so it is probable, SOS or there
about was the selling price.
No Loss to Banks.
The price will give the banks the
full amount of their original loan on
the notes and interest in so far as
in default to date.
Many of the banks have written the
notes down to low valuation on
their books and some have probably
wiped them out altogether.
Just what the advent of the new
group of owners of such a large block
of stock in the Washington Railway
Company will mean to the company
and to the District remains to be
seen. Until they are known one can
not even speculate.