Evening star., 1932-02-05
Sale of Securities Brought
Fat Profits, Testifies
u. S. Examiner.
TWO HOLDING COMPANIES
NAMED AS RECIPIENTS
Aaron ]. Hughes Describes Trans
actions for Control of Company
Now Owned by insult.

Three quarters of a million dollar
proflt was made on the sale of stocks
and bonds Of the Alexandria Light g.
Power Co. by two holding companies
now under the control of Samuel H.
insult, Illinois utilities magnate, it was
claimed today in the Federal Trade
Commission utility investigation.
The transactions, occurring in March,
1926, were testified to by Aaron ].
Hughes, examiner for the Trade Com
mission. His report showed that when
the preferred and common stocks of the
Alexandria Light & Power Co. were ac-
quired by the National Public Service
Corporation from the Municipal Public
Service Co, Municipal recorded profits
of $685. ,0l0. Similarly, when Munich
pal Service Co. sold its bond holdings
in the Alexandria utility to National
Public Service Corporation. it recorded
a profit Of S15l,7l8, or total on the
two transactions of s747 1928.
Estimates Merger Profit.
When the Alexandria company VS.
merged, in the same month, with Vir-
ginia PubliS Service Co. National re-
corded a profit of s71,195, bringing the
total profit to the then A. E. Fltkln-
controlled companies to S785.9 .923.
In obtaining the Alexandria Light &
Power Co. stock from the Municipal
Public Service Co. the National Public
Service Corporation gave 29,880 shares
Of the Eastern Shore Gas & Electric
stock listed at Sl269 900 in exchange
for 1850 shares of preferred and 3,400
shares of Alexandria common. valued at
Sl,0230l0 The difference was made
up in cash. according to Hughes
His report stated Municipal had paid
only $3.50 900 for the Alexandria stocks,
but when it sold them TO National It
set up on its books the 29,880 shares
of Eastern Shore stock at figure
s563O1O less than the value the Ma
tional Co. had carried on its books.
In this way" Hughes report de-
clared Municipal Public Service Co.
avoided showing a profit on the Alex
andria stocks, which were Immediately
passed on to Virginia Public Service
at the appreciated cost
Profit Not Shown.
The Municipal company did not re-
cord a profit as a result of this trans
action until September, 1927 the re-
port said, when it reSold to National
Public Service the common stock of
the Eastern Shore Gas & Electric
which it received in exchange for the
Alexandria stocks Municipal then re-
corded according to Hughes, the fol-
lowing profits: S563,010 on Alexandria
Light & Power and s33, 100 on Eastern
Shore Gas & Electric
In reselling the Eastern Shore stock
to National Public Service. the COM
mission was informed, Municipal was
paid s1,303000. or S33,100 more than
the cost at which National had ac-
quired the same stock and S596l10 in
excess of the amount at which the stock
was bought from National by Municipal
originally.
Between the time of the sale. or
transfer from National to Municipal of
the Eastern Shore stock and the resale
to the National the name Of the utility
was changed, according to Hughes,
from Eastern Shore Gas & Electric Co.
to Eastern Shore Public Service Co.
insult acquired the National Public
Service Co. through his National Elec-
trio Power Co. about a year and a half
after the Alexandria Light G. Power
Co. transactions.