Evening star., 1933-01-07
Draft Expected Next Week,
With Howell Opposing
Present Form.
NEBRASKAN TO INSIST
ON VALUATION SLASH
Advocates Excluding Going Con.
Germ" Items and Companies Pro-
test Proposed imposition"

With Senator Howell, Republican, of
Nebraska, waiting to oppose the bill au-
thorizing a merger of the Washington
and Georgetown Gas Light Companie5
if the legislation reaches the Senate
| floor in its present form, the Senate Dis
| trict Committee prepared today to draft
its recommendations on the measure.
Chairman Capper said the report would
be made some time next week.
Public hearings, at which Senator
Howell. former executive of the munich
paly-oWned gas company in Omaha,
told the committee he intended to in
SfSt on clause excluding going con-
Germ" estimates from valuations for
rate-making purposes, closed late yes
| terday.
The Nebraskan's proposal was vigor-
ously contested by Attorney Wilton j.
D2mbert, representing the gas interests,
who said he did not see how the com
panies could agree to such an imposi-
ton"
While the Senate District Committee
was debating the bill the Public Utn-
tiles Commission announced it had au-
| thorized the Washington Gas Light Co.
to issue and sell $8,500 900 in refund
ing mortgage gold bonds at per cent
| interest, maturing in 1858. Although
the utility, in applying for permission
to issue the bonds, specified a mini
mum of 89, the commission ordered the
bonds to be sold at not less than 904
plus accrued interest.
Howell to Get Data.
Senator Howell. principal opponent
Of previous legislation to consolidate the
two companies, was to be furnished
today with an itemiZed list of the ap-
proXimately $4,000 saving which Gen.
Mason M. Patrick chairman of the
| Utilities Commission. told the commit
tee he believes will result from the
physical merger. In requesting this
estimate Senator Howell announced he
planned a personal inspection today of
the gas company properties
Taking the stand that the gas COM
pany interests would reap greater bene-
| fltS from the merger than would the
public under the pending legislation, the
Nebraska Senator asserted the profits
OF the company have been enormous. -
|, AS an alternative for his proposal
to exclude going concern" value from
the utility's valuation, Senator Howell
pTEpcsed the bill be amended so as to
exclude that portion permitting the
merged companies to increase the
amount of capitalization by issuance of
capital stock
! Lambert pointed out that the greatest
real savings the companies would de-
rive under the egislation-which saw
ing, he said would ultimately be handed
down to the consumer-would be from
the opportunity provided them to re-
organize their financial structure. and
not from mere consolidation of the
two companies. The attorney added
Howell's going concern" proposal was
unconstitutional"
Regarded as Top Heavy"
He pointed out the corporation's IS
finances were at present "top-heavy"
with bonded Indebtedness, 83 per cent
OF the capital being represented in
bonds. with only II per cent stock. He
said it was the only corporation in the
country where charter created in 1848
remains the same and pointed out that
no new stock issues had been author
lied during the last 40 years
Senator Howell commented that he
could not see how, without manipula-
ton of some kind in stock, the COM
pany can derive any benefits from this
provision"
Testimony that the merger, as pro-
| posed in the bill, would be in the public
! interest was given the committee By
| Gen. Patrick, Assistant Corporation
| Counsel William A. Roberts and Public
Utilities Commissioner R. E. Elgin
| Peoples Counsel Richmond B. Keech
! however, sided with Senator Howell fol
| exclusion Of the "going concern" value
IN esta abllshing valuations as a basis fol
! rate making. He said he did not believe
additional stock could be marketed a.
this time even if it were authorized.
Senator Copeland, Democrat, of New
York, said: Senator Howell Is gooC
| parliamentarian If we cannot have
him satisfied, we certainly cannot pas.
| the bill anyhow Gen. Patrick and Mr.
Roberts have said that the public woulc
be better off with the measure enacted
into law than we are at present. If WI
can't get it, We may as well go alont
as we are now"
Gore Scores Outrage"
During the course of the discussion
Senator Gore, Democrat, of Oklahoma
questioned Gen. Patrick concerning tht
regulation which allows the gas com
panies to levy fine of 10 per cent or
accounts which are not paid within q
days Upon being informed that 1t wa.
| authorized by an act of Congress, Sen
ator Gore said he thought it was "ar
outrage
why, that's a greater rate of in
terest than the United States has t.
pay for loans for three years." he said
Proceeds from the sale of bonds au
thorized by the Public Utilities Com
mission to be issued by the gas com
pany will be used for the following
according to the company's application
To pay $4,000,000 series A. 10-yea]
6 per cent mortgage gold bonds, datet
April 2, 1928, and due April l, 1888.
ITO pay S3,000000 Az per cent note,
dated December /, 1920, and due Apri
l, 1888.
ITO partially reimburse the gas com.
pany for expenditures for the acquisi
tlons of new property, extensions, i'm.
proVements, etc, made prior to Decem.
Der /. 1882, properly chargeable tt
capital account and for the repayment
OF part of bank loans incurred for such
expenses"
The new bonds are to be secured by
an open-end deed of trust on the com.
pany's properties.