Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-31
GAS SUIT BROUGHT
TO TEST D. c. LAW
Designed to Force Foreign
Holders to Sell Stock in
Light Company.

A test of law which has been on
the statute books Is years without
judicial Interpretation is the purpose
Of the suit filed by the District of Co
lumbia and the Public Utilities Com
mission yesterday to compel the pres
ent foreign holders of a majority of
the stock of the Washington Gas Light
Co. to sell their stock.
The law referred to is the La Toilette
antt-merger act. passed as a rider to
the District appropriation act In March,
1918. This act provides that 1T shall
be unlawful for any foreign public
utility corporation or for any foreign
or local holding corporation, or for any
local street railroad corporation, gas
corporation, electric corporation, tele-
phone corporation, or other local public
utility corporation, directly or indi-
rectly, to own, control or hold, or vote
stock or bonds of any public utility
corporation organized under any gem
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,
except as heretofore or hereafter ex-
pressly authorized by Congress"
Control Passed Last June.
Control of the gas company, which
had remained in Washington hands
during the 81 years of the company's
existence, passed last June to five for
however, hold the stock through an
investment trust" organized under the
laws of Massachusetts,, which is the
owner of record of the stock Shortly
after the control had been acquired by
the outsiders, the Public Utilities Com
mission launched an inquiry into the
sale, in which it enlisted the aid of the
Department of Justice That body,
through its Bureau of Investigation,
submitted a report on the transaction,
stating that the investment trust had
been set up as a means of avoiding
o strict Interpretation of the anti-merger
act, and revealing that the purchasers
intended to work for the repeal of the
act, and own the stock in their own
names should their effort prove sue
cessful.
The commission, therefore, called on
the corporation counsels office to bring
suit to bring the gas company back to
local control. After several months of
preliminary work, the suit was filed
Yesterday. 1t is the firat ever to be
The suit alleges that the groups for
whose beneficial interest the stock is
held are the Harris Forbes Co., New York
bankers and investment underwriters;
the American Founders Corporation, a
Maryland corporation dealing in do
nestle and foreign securities; the Chase
Securities Corporation, investment
bankers: Schoelkopf, Hutton e. Pome-
roy. New York investment bankers and
!. nI AZ Dell eklv O.
Co. wholesale and retail investment
and security distributors.
Suit to Compel Sale.
The object of the suit is to compel
the present owners of the stock to sell
it. This is one remedy provided by the
terms of the anti-merger law, the other
being to compel the dissolution of the
company. Besides asking the court to
compel the sale. the petition asks that
the present holders of the stock be for
hidden to vote the stock at any stock
holders meeting or at any election of
directors.
The petition alleges that the invest
ment trust owns 108.806 shares of the
company's stock. This represents a
| large majority of the company's out
standing capital stock, which consists
OF 10000 shares, with par value Of
$40 each.
Most of the purchases engineered by
the Harris-Forbes concern were made
at $i25 a share. The petition also
states that the investment trust con-
trolls $1,000 worth Of the company's
1860 5 per cent gold bonds. This is
the FIRST intimation that there had
been any buying into the company's
funded debt.