Evening star., 1927-05-12
BUS LINE DEFENDS
STOCK OWNERSHIP
Denies Illegal Connection
With North American Com
pany in Brief Today.

The Washington Rapid transit Co..
through it's counsel. George p. Hoover,
Aled with the Public Utilities Commits.
sion today a formal brief. denying ille-
gaiity of ownership by the North
American Co. and urging that hear
inss be resumed on its application for
a straight 10-cent cash fare.
The legality of the ownership of the
company was questioned last Fall bye
William Nick. Clayton. chairman of
the public utilities committee of the
Federation of Citizens Associations,
and resulted in the indefinite suspen-
sion of hearings on the application for
q higher rate of fare.
The brief contended that the trans
fer of the bus company stock to the
North American Co. was not in viola
tion of the La Toilette anti-merger act
as charged by Mr.. Clayton. because
it's stock was purchased from the
shareholders and not from the com
pany Nrect. and that such a trans
action was not in conflict with the
law.
LeveIed at Sale.
The inhibition contained in the La
Toilette anti-merger act, according to
the brief is leveled at the sale or
transfer by any public utility corpora |
ton of any portion of its stock and
bonds 10 any other public utility cor |
poration which is prohibited from hold |
ing or owning such shares of stock.
"The Washington Rapid Transit Co. |
has not at any time, nor has it within |
the meaning of the statute, ira fer |
red any portion of its stock or bonds |
in violation Of Section ii of the said |
act of Congress" said Mr.. HooVer's |
brief. ION the contrary, the shares of |
stock now registered on the books of |
the Washington Rapid Transit Co. |
in the name of Eugene f. Thompson. |
trustee. were sold to persons who |
were legally entitled to acquire the |
said shares of stock and such sale |
and transfer We're not inhibited by |
the said act of Congress-
Violation Is Denied.
Even assuming that the said shares |
of capital stock of the Washington |
Rapid Transit Co., standing in the |
name of Eugene E. Thompson, trustee, |
are beneficially owned by the North |
American Co, nevertheless. we main |
tain that the holding of such beneficial |
interest does not constitute violation
by the Washington Rapid Transit Co. |
tion II of said act of March 4, 1913.
THE Washington Rapid Transit
Co. did not sell or transfer any por-
tim of its stock or bonds to any corr
bofe tion wllIcn is inhibited from hold
ing or owning such shares of stock
by said section IL of the said act of
Congress.
"frhe plain intent and meaning of
said section II of the act of March !,
1913. was. and is, to prohibit the sale
by a public utility corporation of the
shares of its capital stock to any L
other utility corporation, foreign or
local, either holding or operating COM +
pany,
Ownership Is Described.
"As we have heretofore stated, the
capital stock of the Wash
ington Rapid Transit Co. is $4,000
shares of the par value of $40 each,
of which u i,612 have been issued and
are outstanding. or the shares issued
and outstanding. 2ls227 shares are
registered in the name of Eugene K.
Thompson, trustee, as aforesaid. and
the remaining 3S5 shares are held and
owned by Al other individuals"
A list of the names and holdings of
these shareholders was attached to
the brief. |.
whatever may be the status of the
North American Co. respecting the
shares Of stock" the BRIEF
we desire to emphasize
that the Washington Rapid Transit
Co., which is the sole party before the
Public Utilities Commission, has never
sold or transferred any portion OF its
stocks or bonds ia. any other public
utility corporation or holding cor
poration whatsoevers and that, there
fore. the Washington Rapid Transit
Co. cannot legally be penalized for
any acts or. omissions of any OF its /
whether corporate or in
uividual.
Penalizing Is Claim.
SHOULD the Public Utilities Com.
mission decline to proceed With the
hearings on the application of the
w. r. T. Co. for an Increase in the
rate of fare, to which it is mani
festiy entitled, the effect of such
action by the commission would be
the penalizing of the minority share
holders of said company, who have
been guilty Of no wrong.
While, we express no opinion as to
the legality sof. the interest OF the
North American CO. in the shares of II
the capital stock aforesaid, neverthe-
less we maintain that the holding of /
such interest does not authorize the +
infiiction of any penalty upon the
Washington Rapid Transit Co. and it's /
minority shareholders.