Evening star., 1931-05-20
LUNDVALL BARES
NORTH AMERICAN
TRACTION DEALS
Says Bus Stock, Bought for
s515,e6e.e so, Sold to Viii
son in Merger Plan.
FEAR HOLDINGS LOSS
UNDER LA TOILETTE LAW
Difference Between 100000 Paid
and Ledger Value Held
Charged as Loss.

The series Of transactions by which
ownership of the Washington Rapid
Transit Co. passed in succession from
Leon Arnold to the North American
Co. and finally to Harley Peyton Will
son. was outlined to the Federal Trade
Commission today By A. z. Lundvall,
commission accountant who investi-
gated the records Of the deals.
With a view to bringing about .
merger OF WaShington's transportation
facilities, the North American. Lund-
vail explained. purchased the bus COM
pany for s515.966.96, getting 2l,227
shares of its capital stock, having
par value of $40 a share. Doubtful
whether 1t could legally own the stock
under the La Toilette anti-merger act,
the gigantic utilities holding corpora
ton, he said. proceeded to divest 1T
self of the ownership.
However, in doing so, Lundvall de-
clared. the North American desired that
that the transaction be carried out IN
such a way that the corporation to be
formed to acquire the transit properties
in the District, should be in position
to take over the bus company stock st
the cost to the North American, In
Guiding interest charges.
Enter Agreement With Wilson.
Lundvall pointed out that it was
necessary therefore to And purchaser
who would undertake to Join in plan
for unifcation should q merger Of the
transportation facilities be consummat-
ed Under those circumstances, he said,
the North American entered into an
agreement with Mr.. Wilson. member
of its board of directors, which provided
for the purchase by him of the stock
which he was to return to the corpora
tion on or before May /, 1929 under
plan Of unification OF the transit
properties.
Accordingly. the stock was sold to Mr..
Wilson, and he made a down payment
of 100000 in cash. the agreement
stipulating that the balance was TO b.
determined at q later date. Lunvan
said, as far as he was able to learn. Mr.:
Wilson had not made any additional
payments.
CaFged 10 Reserve as Loss.
Although the agreement with Mr..
Wilson provided that the ultimate price
was to be determined at Q later date.
he declared. "yet the difference bs-
tween the cash price and the ledger
value was Immediately charged To re-
serve for contingencies % though "
-
contingent asset.
s'WfSile no merger of the washington
TRANSPORTATION facilities has yet taken
place and nothing further has neen
paid by Mr.. Wilson against the plr-
chase price of the transit company
stock, it Is assumed that the agree
merlt with Mr.. Wilson is still in force,
despite the fact that the agreement
provided that the final determination
of the purchase price and settlement
thereof was to take place on or before
May /, 1929. So far as can be de-
termined, no new agreement has sup
Sought Transit Purchaser.
LundvaIl pointed out that as an in
ducement for executing and delivering
the agreement. the North American
under another agreement with Mr.. VIII
son undertook to find a purchaser OF
the transit stock for him, at his re-
quest, or that of his executors, admin
istrators or assigns, at any time up to
the expiration of go days after the
termination of the agreement for sale,
because the entire transaction was
predicated upon the consummation OF
a plan of uniflcation.
The North Americans interest in the
Washington Railway d Electric ana
Capital Traction companies also was
goine into in detail by Mr.. Lundvall. He
said its holding in the washington
Railway d. Electric consists of 62O63ls
shares of common stock, which consists
Of s5.5 per cent OF the common stock
preferred stock. consisting of 24,2 per
cent Of the preferred stock outstanding
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