Evening star., 1935-11-12
NORTH AMERICAN
WILL BEAR MAJOR
SHARE IN DEAL
Will Revise Plan for Divest-
ing Itself of w. R. & E.
/ Control, Says Mcclellan.
UTILITIES COMMISSION
is ADVISED OF PLAN
Holding Company Will Pay Ex-
penses Incidental to Deposit
of Stock.

The North American Co. will revise
its plan for divesting itself of owner
ship control in the Washington Rail-
way g. Electric Co. so it will bear the
major share of the cost of the re-
sultant transaction in stocks. the Pub
lie Utilities Commission was advised
today by William M. Mcclellan, presi-
dent of w. r. & E.
The statement was submitted to
the commission in reply to a series
of questions raised when copies OF the
original plan of the company indi-
Gated the W. r. g. E. would be bur-
doned by cost incident to the substi-
tuition of 1,625.000 new shares for the
outstanding 65,OO0-odd shares OF COM
mon stock in w. R. g. E.
Trust to Be Temporary.
Replying to another question, Presi-
dent Mcclellan explained that the
trust to be set up as depository for
the stock incident to the proposed
transfer would be temporary.
The Utilities Commission had asked
sA@S
cost of the stock transfer:
why were all of the costs incident
to the carrying out of the terms Of
this agreement placed on the W. r. g.
E? What is the estimate as to the
aggregate expenditure to be made un-
der this deposit agreement? And what
are the estimated expenditures Incl
dent to the filing of reports, prepara-
ton of proxies and other similar cor
porate data?"
To this question, President McClel-
Ian replied today:
1T is not intended that all of the
costs incident to the carrying out of
the terms of this agreement should
be placed on w. r. & E. The North
American Co. will pay all expenses
incidental to the deposit of the stock
which it owns with the depository
and the expenses in connection with
the original issuance against such
stock of the certificates for participant
ing shares down to and including the
transfer of such shares from the
names of the underwriting bankers
nominees into the names of those
who purchased the shares from them.
The w. r. g. E. will take up the
expenses from that point forward, such
expenses being in effect equivalent to
those which the Washington company
would have if its own stock were SUBJ
divided into 1925 900 shares and dis
tributed to the public"
$1,000 Shares of Stock.
There are now 65,oOO-odd shares of
w. r. g. E. common stock, of which
the North American Co. owns some
$1,000. 1t is proposed to issue new
shares at the rate of 25 for each one
OF the existing shares. The holding
company hopes to sell the substituted
shares to the public at price up to
$50 per share. This sets up expecta-
tion that the North American Co.
would reap return of some 22OO0.-
600 on that price basis. Further ex-
planning the North American plans
for sharing the cost, President Nc
Clellan said:
The North American Co. will pav
the fixed fee of the depositary and the
subdepositary, if any, covering all de-
post shares. for the first year or por-
ton thereof during which the deposit
agreement is in effect.
The w. r. e. E. will pay any ex-
penses incidental to the deposit with
the depositary of the 2,8O3 shares of
its common stock not owned by the
North American Co. and the expenses
Of issuance of temporary certificates
for participating shares against such
stock. This expense, it is estimated,
will not exceed 81 per share for such
shares as are deposited"
Cost Estimated at $4,000.
In conclusion, DR.. Mcclellan esti-
mated that the exepense to the w. r.
L. e. would not be greater than
ss25,O00 for the costs incident to the
stock registration and transfer about
which the Commission raised ques-
tions.
I In the meantime, William A. Rob-
aerts, peoples counsel before the Dis
trict Public Utilities Commission,
drew up the outline of a report
sanaly1ng the plan of the North
American Co. to relinquish control of
fhe W. r. l. E. and the Potomac Elec-
tric Power Co. The report will be sub
initted to the utilities commission and
the Securities and Exchange Commits
sion which must approve the plan.
Roberts does not propose to make
the report public until after Novem-
Der 81, the final date on which the
North American will be permitted to
hle amendments to its registration
Statement. There has been no inti-
mation from the company, however,
whether it will seek to make any
changes.
. The report, according to Roberts,
contains a thorough analysis of the
North Americans plans, together
with an explanation of any relation
ship it may have with the La Toilette
anti-merger act, and the street rail-
NaV merger act