Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-14
SALE OF GAS firm
IS STUDIED HERE
Identity of New York Group
Surrounded by
Mystery.

to own, control or hold stock or bonds
in q local utility corporation without the
approval Of Congress.
An atmosphere of mystery surrounds
the identity of the New York group
which acquired the controlling interest
in the gas company in q deal con-
summated yesterday afternoon, in
volving about $1,000, 000 which natur-
ally has aroused the curiosity of Wash
ington financiers. as we'll as officials of
the Public Utilities Commission. The
only names mentioned In connection
with the transaction are those of D. A.
Pearson, who represented the New
York capitalists, and Wilton J. Lambert,
Washington attorney.
Report Due Soon.
Although the Public Utilities Com
mission is as much In the dark as to
the identity of the new owners rs
Washington financial circles appear to
be, commission attaches point out that
the names will soen come to light in a
report the gas company is required to
submit containing a complete list Of It's
stockholders. The report is due shortly,
The transfer of control of the gas
company to the New York financiers is
expected to be one of the questions con-
sidered by the commission at a meeting
tomorrow morning, but there is little
likelihood that any steps will be taken
to ascertain the new owners pending
the receipt of the stock ownership re-
port. The main question that will con-
Germ the commission is whether the
transaction was made in accordance
with the anti-merger act
II the gas stock passed into the hands
of individuals and not into the control
Of foreign" public utility or holding
corporation, 1t was said at the commits
sion, then the transaction would not
conflict with the arti-merger law. The
anti-merger act, it was pointed cut,
makes no reference whatsoever TO In
dtviduals, whether they reside inside or
outside the District, holding stock Ia
public utility corporation.
Laws Provisions.
The provisions of the anti-merger
act relating to stock transfers are con-
tanned In section II, which declare it
shall be unlawful for any foreign
public utility corporation or any foreign
or local holding corporation or for
any local street railway corporation,
electric corporation, or any other local
public utility corporation, directly or
indirectly to own, control or hold vote
stock or bonds of any public utility
corporation organized under any gen.
eral incorporation law or special act OF
the United States or authorized under
any law of the United States to do
business In the District of Columbia. ="
The act also provides that 1t shall be
unlawful for a District corporation to
sell or transfer any portion OF IT'S
stocks or bonds to any other public
utility corporation or holding corpora
ton unless authorized TO do 50.
Aside from considering the legal
phase of the transaction. public utility
officials said that without further de-
tails they we're unable to comprehend
the significance of the transfer of stock
to the New York capitalists. II 1t re-
suits in . consolidation of the Wash
ington Gas Light Co. and its subsid-
iary, the Georgetown Gas Light Co., It
was said, an Improvement in service
may follow. However. If the stock sale
constitutes nothing more than a shift in
ownership, the utili6y experts foresee no
decided change in existing conditions.
Another question that Is puz2ling
utility ofaeials is what the new owners
will do with respect to the gas COM
pany's disputed valuation, now in the
courts.
Mr.. Pearson. who has represented
the outside group In this city for
more than year during the
drive to obtain the controlling interest,
secured sufficient shares late yesterday
to assume leadership in the eompany's
affairs.
The latest purchase Of large blocks Of
the stock was made at $12o per share.
The company has 100 900 shares out
standing. so that about 81 600 shares
were required to change control. 1t is
reported that the new interests now
have between IS 900 and $4,000 shares
In the corporation.
$4,000 Shares Decided Action.
The deciding transaction Ii said to
have conferred around about $4,000
shares of stock, most of which was
owned by the present Washington Gas
Light directors. Among these who are
reported to have parted with their hold
ings are: Ord Preston, president of the
corporation; James M. Green, H. Pres
colt Galley, William King and Robert
d. Weaver
The legal end Of the deal was looked
after by Lambert, who has been repre-
sentinR Mr.. Pearson. He Is also q di-
rector in the Washington Gas Light,
having gone on the board at the last
annual meeting to assist In represent
ing the New York financiers after they
had bought some 10000 shares OF the
stock.
Preston stood out for the rights and
protection Of the smaller stockholders.
He insisted that they be given the same
treatment as the large stockholders. As
a result Of President Presten's efforts
all the stockholders who have not yet
disposed of their stock are to be Of
fered s125 share for their holdings.
s125 Per Share for Stock.
Notices are TO mailed at once by the
Washington Gas Light Co. informing all
10
will pay $125 per share for taeir stock,
held on June Il, provided it Is delivered
before June 81 next.
In an estimate that the deal involves
around $7,000,000 the figures are based
! on the fact that the new interests have
between $1,000 and $4,000 shares, and
that many Of these shares were pur-
chased far below the present price of
s125 per share. When the campaign for
control started IL was not necessary for
the New York group TO pay anything
like s12S per share.
While the New York interests
have kept the name secret of the
utility concern which they repre-
sent, various concerns Of national
scope have been mentioned. The North
American Co. was named, but IL was
stated months ago that this concern
was not interested In the washington
! company. At one time q big Midwest
concern, With headquarters in Chicago,
attempted to start negotiations. The
/ Pearson interests had gone so far that
their efYorts were blocked.
The new interests propose TO make
sweeping changes In the local plant,
| which they claim will bring about q
substantial Jump In earnings.
Present RSard 10 Remain.
| So far as is known, the present board
! Of directors will remain in once for
the present, with Mr.. Preston at the
helm. Eventually, however, the board