Evening star., 1932-05-08
BANS GAS CONTROL
BY OUTSIDE FIRMS
Commission Forbids Voting
of Stock at Meeting To-
morrow.
Continued From First Page)

Continued From First Page.)
Corporation, was approached by @.
Bowie Chapman and Paul Keller, pro-
moters Of Washington, with the sug-
gestion that he acquire the gas corns
pany. He proceeded to acquire it Tor
his corporation and was then informed
that the laws Of the District and of
the United States prohibited it. and
the said Albert z. Peirce nevertheless
proceeded toward such acquisition by
indirect methods for the express pur-
pose OF fraudulently evading the said
laws"
Agreement Entered.
He entered into an agreement with
the HarriS-Forbes Corporation (prede-
cessor to the present Chase-Harris-
Forbes Corporation, the American
Founders Corporation, H. M. Byllesby
g. Co., Chase Securities Corporation
and Albert E. Peirce g. Co, on the
one hand, and the Central Public Serv-
Ice Co. on the other whereby this
group organized the SeabOard Invest
ment Trust, each member of the agree
ment taking shares of beneficial inter-
est in the trust.
The Seaboard Investment Trust (the
name OF which was later changed to
Washington & Suburban Companies), it
Is charged, was Offered by three en-
ployes of the Boston Office of Chase
Harris Forbes, and while theoretically
Independent, the trustees we're actually
subservient to the will Of Chase Harris
Forbes and the Central Public Service
Corporation. This trust acquired "a
per cent Q09,l76 shares of the Wash
lngton Gas Light Co.'S capital stock.
This stock, together with the other
assets Of the trust, are irrevocably
pledged as collateral security for the
payment of $500, 900 Of the gold bonds
OF the trust. These bonds found their
way into the hands of the Chase Harris
Forbes Corporation and were marketed
by it to the public.
1t Is charged that William A. wiIdes,
vice president of the Southern Cities
Public Service Co., was made a trustee
OF this trust for one day, March 9,
1881, during which he negotiated a
transfer of all of the shares of bene-
hclal interest in the trust to the West
held Trust, after which negotiation he
resigned as trustee. The Central Public
Service Corporation Is said to have di-
rectly controlled and voted the stock
OF the Washington Gas Light Co. held
by the trust, and to have caused the
election Of Albert Z. Pierce and Fred S.
burroughs to the board of directors Of
the local company, and also to have
caused the election of George A. G..
Wood as its president. All this was
accomplished without consultation with
the trustees OF the trust, it is charged.
Managed Operations.
Following this the Central Public
Service Corporation controlled and
managed the actual operations of the
ChlnutnY1 7 TrrR.N
salaries affirmatively directing all
functions of the officers without
the consent of the trustees"
The Washington g. Suburban Conn
panies, it is said, now owner of record
OF the Washington Gas Light stock, has
securities outstanding on which the in
tereSt payable amounts to S81O. 600 ON
notes and preferred stock alone. yet its
income from dividends on its holdings
does not exceed $450,000, of which
S392'37l.20 represents dividends received
from the Washington Gas Light Co. at
the rate prevailing during the years
1929 to 1881, inclusive"
There is no revenue available to the
& Suburban Companies"
the statement goes on, for payment on
its common shares, and there is no
revenue available to the Westfield Trust
for payment of interest on its outstand-
ing obligations, including the $6,000,00
collateral trust note, the SEAS, $50 WASH
ington & Suburban Gas Co. note,
and the $13, ,725, ,00o note issued by the
Westfleld Trust for funds received by
A. E. Pierce. All of the obligations Of
the Westfield Trust are in default, and
all of the common shares of beneficial
interest of the Washington & Suburban
Companies are in the equitable owner
chip of the holders Of the collateral
trust notes of the WeStfeld Trust"
Forced to withdraw Contracts.
1t is then charged that the Central
Public Service Corporation required the
officers Of the Washington Gas Light Co.
10 enter into a management contract
with one of its subsidiaries, the Utility
Corporation, at a retainer
Of $4,000 per annum, which contract
was later withdrawn on demand by the
Utilities Commission. Then the Gen.
trail Public Service Corporation re-
1uired the officers of the local company
10 transfer to the Public Service Engi-
neering Co, another c. P. S. subsidiary,
The contract with the Columbia Gas 6E
Electric Corporation for the transmits
sion of natural gas to the District that
he Public Service Engineering Co.
charged fee on natural gas purchased
LOl IAAC w doIllllBbOu NIdS 1lSLlb 70. Ol q
minimum Of $4,000 per month without
rendering any services or using any of
It's property for it; that the c. P. S.
claimed for itself a pipe line built for
he Washington Gas Light Co.. and
.ried to sell the local company it's own
pipe line for $68, 900; that the Central
Public Service Corporation required the
officials of the local company to send
Ill plans for additions to the c. p S.
ior approval before they were executed.
and that the c. P S. and Chase Harris
Forbes sent employees to Washington
and put them on the pay roll of the
ccal company at unreasonable" fees,
n some cases as high as $l00 a day,
,he difference between the salaries paid
oy the c. P. S. to the employees and the
ices paid by the Washington Gas Light
60 being pocketed by the c. P. S.
The order directs all the corporations
and trusts named and all related
u affiliated corporations, companies,
rustS and persons, by whatever term
described. forthwith absolutely and
Internationally to divest themselves
md each of them of the control and
of all shares of the Wash
ngton Gas Light Co, and to cease and
lesist from exercising any and all ele-
nents of control and or management
If the said Washington Gas Light Co.
md said parties are specifically prohib-
ted from directly Or indirectly holding
n voting the said stock of the Wash
EgtOn Gas Light Co"