Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-04-06
GREAT FALLSLAND
PROVES GOLD MINE
TO TRACTION LINE
Area Is Unproductive for
Owner, the Potomac EIeC-
trio Power Co.
w. R. & E. co. GOT STOCK
IN EXCHANGE IN 1918
Shares, Worth 100000 Then,
Have Earned 100000
as Dividends.

The records of the Public Utilities
Commission yesterday yielded one Of
Washington's most unusual stories in
finance case in which tract OF
land at Great Falls which thus far has
been unproductive for its owner, the
Potomac Electric Power Co., is serving
as a veritable gold mine" for the
washington Railway & Electric Co.
which sold it II years ago.
The railway company paid $425, 900
for the property in 1902, and trans
ferred it in 1918 to the power company
for 10000 shares of its capital stock
worth 100000. The stock since has
earned more than 100000 in di-
vidends for the railway company, but
all the power company has gained
through the transaction is a collection
of tax bills.
One Pocket to Another.
The railway company, however, is the
parent of the power company, ana ootn
are controlled by the North American
Co. Of New York. utilities investment
corporation. So the dividend payments
are tantamount to an exchange from
one pocket to another as far as the
public is concerned.
The Great Falls holdings of the
power company figured prominently in
the recent Potomac River power de-
Velopment controversy between Col. U.
s. Grant, Sd, director of public build
ings and public parks of the National
Capital, and Maj. Brehon B. Somervell,
Federal engineer for the District.
In his final attack on Col. Grant
for opposing power development at the
~; declared that the
power company would be the greatest
single beneficiary from the Cran1ton
park bill. as it would be able to dis
pose of the property to the Government
which it has been holding at million
dollars and at the same time keep
out all competitors in the District.
Acquisition by Traction Company.
T. was with considerable foresight
that the street railway company &C
ouired the Great Falls property. 1t
did so by purchasing two-thirds inter-
est in the Great Falls Power Co., and
thus coming into possession of certain
rights to a valuable power site. For
nearly 10 years the railway company
retained this interest No plant was
built by the Great Falls company and
the property was absolutely unproduc-
tive.
In 1912 the railway company enGereu
into a contract to convey within one
year to the power company the inter-
est it owned in the power site In con-
sideration of 10000 shares Of its CAPT.
tai stock. These 10000 shares repre-
sAnted an additional issue made for the
purpose of the transfer, and on account
of the transaction the power company's
capital stock was increased from S.
100000 to $6,000,000.
When the commission completed its
valuation of the power company in
1916 it learned that the railway COM
pany had then received $105,000 in
dividends from the 10000 shares Of
stock. Since then the dividend pay
ments increased by leaps and bounds,
and the total since the valuation
amounts to 213 per cent, divided as
follows-1917, II per cent; 1918, II
per cent; 1919, per cent; 1920, per
cent; 1921, 10 per cent; 1922, 10 per
cent; 1928, 10 per cent; 1924, IL per
cent; 1925, 81 per cent (this includes
regular dividend of IA per cent, plus
an extra 48 per cent due to the distri-
button of the impounded fund.-; 1925,
10 per cent; 1927 18 per cent; 1928, 20
per cent, and 1929, % per cent.
The power company's Great Falls
holdings are not included in its valua-
ton for rate-making purposes. The
commission excluded this item on the
ground that the property was not used
or useful for electrical purposes In the
District.