Evening star., 1933-01-06
Unopposed Despite Proposal
From Keech to Slice
Valuation.
SUBCOMMITTEE EXPECTED
TO APPROVE MEASURE
Plans of Peoples Counsel to Elk.
clude Going Concern" Value
Promises Future Fight.

Although Peoples Counsel Richmond
B. Keech served notice he intends to
press for an amendment to the gas
company merger bill when it reaches
the Senate which would exclude So
called going concern" value from any
valuation for rate making purposes, no
objection was raised to the proposed
legislation at a public hearing before
the House Subcommittee on Public
Utilities in the House Office Building
last night
Indications were that the subcom-
mittee, of which Representative Loring
M. Black, jr., Democrat, of New York,
Is chairman, would submit favorable
report to the House District Committee
on the measure to consolidate the
Washington and Georgetown Gas Light
companies.
The Senate District Committee is
scheduled to hold public hearings on
the bill beginning at 2:30 o'clock this
afternoon.
Keech, who seeks inclusion of the
going concern" clause in the legislation
as means of bringing about lower
cost for the commodity to the consumer.
told the subcommittee Senator Robert
B. Howell, Republican, of Nebraska,
plans to introduce the amendment In
the Senate.
Based on Good Will
The going concern" value is the ap-
praiSal placed by the utility on the
good will in the community of It's sub
scribers and customers. 1t has been
held by the courts, according to AS
sistant Corporation Counsel William A.
Roberts, who also testified at the hear
ing. to represent approximately 10 per
cent of the total valuation. 1t was
pointed out that, with the companies
valuation, this would create a consid-
cradle reduction in their return. The
gas company representatives are ex-
pected to vigorously oppose it.
Wilton j. Lambert, attorney for the
Washington and Georgetown Gas Light
Cos, voiced ojcetion Immediately to
Keech's proposal. Unless the Supreme
Court of the United States reverses
itself, it must hold any such legislation
as unconstitutional" he said.
Gen. Mason M. Patrick, chairman of
the Public Utilities Commission, told
the subcommittee the merger would
bring about a saving of between $4,000
and $50,000 and to give the companies
an opportunity to change their capital
structure. He said the merger will be
in the interest of the consumers in the
long run, as it will have a bearing on
reduction Of gas rates in the District
The legislation would permit the Wash
ington company to issue stock with
which to finance any further extension
Of its plans, he said.
Uncertain As to Results.
At present neither company may
issue additional stock without express
permission of Congress. He said the
anti-merger restriction, which was an
Objectionable feature of a previous bill
to merge the companies, had been elm
mated
Questioned by Representative Black
as to ultimate ownership Of the gas
companies under the merger, Assistant
Corporation Counsel Roberts was un-
able to predict what the outcome would
be- For the benefit of the committee,
however, he outlined the stock owner
ship in the two companies, in which he
said approximately 64 corporations and
groups were either directly or indirectly
involved.
His explanation brought forth from
Representative Howard w. Smith, Dem
ocrat, of Virginia, the comment that
"the situation seems to be an awkward
one which doesn't appear to serve any
good purpose"
Attorney Lambert said the company
needs the new form of financing con-
templated in the bill in order that 1t
might retire bonds from time to time
and to keep abreast of rapidly changing
times by making improvements and ex-
tensions in service. In response to a
question by Representative Black, Lam
bert said the gas concern does not con-
template rate reductions at the present
time.
The bill provides, briefly, that the
Georgetown Gas Light Co., after the
passage of the bill, might lawfully be
merged with the Washington Gas Light |
Co.. with the latter company taking |
over all rights, privileges, liabilities and
obligations of the Georgetown COM
pany. The consolidated company would |
be authorized to increase its capital |
stock by the issuance of new stock with |
or without par value, in such amounts |
as may be approved by the Public Util- !
tiles Commission, which shall be in |!
control of all issues of stock
Congress Reserves Right.
Congress reserves the right to alter, |
amend or repeal the act or any part of |
it at any time.
The Washington Gas Light Co. at !
present has $2,600,000 In stock out |
standing and s13,6O0,000 in bonds, |
while the Georgetown company has |
$150,000 in stock and $1,000,000 in !
bonds.
Others attending the hearing in
cluded Marcy L. Sperry president of |
the Washington Gas Light Co.; Arthur |
Daen of Sullivan &, Cromwell, repre- |
senting the Chase National Bank inter- |
ests; Attorney William E. Horton of the |
Gas Co. and Public Utilities Commis- |
Sioner r. E. Elgin.