Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-07-10
Washington and Georgetown
Companies Affected by
Commission Order.
SURPRISE MOTION BY
CLAYTON IS APPROVED
Civic Leader Denounces Control of
Local Utilities by For
eign Interests.

Inc PUBIC UTILITIES commission To-
day ordered the owners of the Wash
ington and Georgetown Gas Light Com
panies to be made parties to the hearing
on valuation of the companies properties,
in approving surprise motion by Will
liam NICK. Clayton. civic leader, with
the result the proceedings will be post
poned for 80 days.
The new move will bring into the
case spokesman for the Washington &
Suburban Companies, Massachusetts,
common-law trust. which holds title to
the local gas utility concerns. The COM
mission also will notify minority holders
of shares of beneficial interest in the
common-law trust that they may be
parties to the case and have spokesman
If they SO elect
The commission ordered the outside
ownership interests to be made party
to the valuation case, over objections
from counsel for the Washington and
Georgetown companies, who noted ex-
ception from the ruling.
Denounces Outside Interests.
who is chairman of the Public Utilities
Committee Of the Federation Of Citi-
ms Associations. vigorously denounced
control of the local utilities by inter-
ests foreign to Washington and charged
that the commission had not taken all
steps it might have taken in its effort
to force a return OF the control to
Washington interests.
Both Stoddard M. Stevens. jr, OF
the New York firm of Sullivan g. Crom-
we'll. and Wilton ]. Lambert OF this
city, of counsel for the Washington and
Georgetown Co.. objected to the inclu-
sion Of the owners, or stockholders. in
the valuation case, both claiming that
such move was extraordinary. without
precedent and one that would cause
costly delay. They asked what share
of the cost of postponement OF the
hearing the companies would be re-
sponsib,e for, and the commission said
that would be determined later. While
the cost of commission valuation pro-
ceedings is assessed against the COM
panies, they charge 1t to operating ex-
penses, which are collected out Of
charges to customers.
Clayton Acts At Outset.
The Clayton move came at the very
outset of the hearing when 1t was re-
sumed after several previous postpone
ments, the last on April 3.
When he asked that the foreign own
ers be made parties to the suit. Maj.
Gen. Mason M. Patrick, commission
chairman. reminded him the setting OF
a valuation was the purpose of the hear
ing. no matter who owned the COM
panies.
Clayton countered with the declara-
ton that ownership was particularly
important in a valuation case and in
sisted 1.-The people Of Washington are
not informed as to who owns these
companies. They have right to know
whose property We are valuing here"
To show the connection, he said II 1t
was found that outside stockholders or
holding company interests had sold
shares at lower figure than what they
cost them, it might reflect their opinion
of a lower estimate of value.
Clayton reviewed briefly the history
of the acquisition of control Of the local
gas companies by foreign" interests by
setting up common law trusts, which
he said was an evasion Of the La Fol-
lette anti-merger law, by which Con-
gress intended to prevent outside con-
troll of Washington utilities.
There is q reason. he declared, why
the people Of Washington are FESTIVE"
about the ownership of the local gas
companies 1.-The public at no time,
he said. has welcomed foreign owner
ship of the local companies. The public
here would have been far better of
had all local utilities been kept in the
hands Of local interests"
Many Changes IN Management.
Because Of evasion Of the La Toilette
law by creation Of common-law trusts,
Clayton declared, the gas companies
now do not appear to come into court
with clean hands" in presenting their
claims Of value of the local properties.
Clayton reminded the commission
that the gas companies had appealed
to court the commissions first valu-
alton, completed in 1919, and then,
while that case still was pending. later
asked for a new valuation after there
had been a change in company man
agement. This second valuation pro-
ceeding. in 1927, was dropped when the
company refused to abandon its appeal
from the 1918 valuation decision. Later,
Clayton continued, after another change
abandoned.
Therefore, Clayton charged. the peo-
pie of Washington were forced to bear
a double cost of valuation proceedings.
Chairman Patrick, after considering
Claytons arguments, and gas company
counsel objections during brief recess,
ruled that the Washington & Suburban
companies, in which Chase National
Bank and other outside financial in
terests hold substantial shares, be made
party to the case, as well as minority
shareholders.
When the hearing first started, sew
eral months ago, the companies an
nounced they would claim q joint
valuation of about $4,000, 900. Com
mission experts have arrived at valua-
ton of between $22,000,0O0 and $23,-
5000, including an allowance for
Intangible claims, such as going con-
Germ" value.