Evening star., 1935-11-25
GAS SHARES SALE
BREACH EXPANDS;
THREAT IS MADE
Public Utilities Commission
May Ask Courts for Con-
sent Decree Study.
ANSWER OF LAW FIRM
HELD Unsatisfactory
1900 Common Stock Purchase
Deal Brings Request for
Specific Data

A threat to ask District Supreme
Court to reopen the famous consent
decree of 1882 governing ownership
of the washington and Georgetown
Gas Light Cos. under the La Toilette
anti-merger act was made today by
the Public Utilities Commission as a
result of an unsatisfactory answer
from Sullivan g. Cromwell OF New
York for information as to the pur-
chases of 1900 shares Of common
stock sold at public auction last week
in Jersey City.
The firm of Sullivan & Cromwell
legal representative Of the trustees OF
the Washington and Suburban Cos,
owners Of "a per cent OF the gas
stock, was asked by the commits
sion Immediately after the sale for
specific data as to the purchases OF
the 800 shares
Arthur H. Dean OF Sullivan q
Cromwell told the commission, how
ever, his firm does not believe the
terms of the consent decree places
"any affirmative duty on the trustees
of the Washington and Suburban Cos.
to find out who the purchasers OF
these shares may be, and at the pres
ent time the only knowledge that we
have with respect thereto is con-
tanned in this letter and in our pre-
vious letter sent to you"
Dean also suggested that If the COM
mission wanted any further informa-
ton it make inquiry Of the purchase
of the stock.
Report Irks Commission.
Obviously irked by Deans report.
the commission wrote in reply:
We have always taken the posi-
ton that the commission was to be
kept fully informed as to who held the
voting power in the Washington and
suburban companies. 1t was because
of the La Toilette anti-merger act
that the proceeding was originally in
stituted. The mere reporting of sales
in no wise vests the commission with
information to permit an ascertaining
as to what was then deemed an en-
deavor by your people to divest in
conformity with said statute
The commission then declared II
Deans construction of the consent de-
cree is to prevail, then it may deem
it advisable to ask the Supreme Court
in the District Of Columbia to reopen
this case"
Nine hundred Of the 1900 shares
were sold for the General Investment
Co., formerly the Public Utility Hold
ing Corp. of America. -Four hundred
and eighty shares of the other 30C
were sold for the United Founders
Corp, 180 for the American e. Gen.
eral Securities Corp, 100 for the
United British International Co., Ltd,
and 100 for the Second International
Securities Corp.
The purchaser of record of there
shares was the firm of Outwater 6.
Wells of Jersey City.
Sold for $4,000.
The 1900 shares, representing Is
per cent of the 10000 shares of gas
company stock outstanding, have a
market value at the present time OF
about $2,000.000 and were sold for
$4,000. Dean reported to the COM
mission the shares were sold at the
same time as block because the own
ers felt they could obtain better price
than as though each individual owner
offered his share separately.
Under the consent decree, the trus-
tees of the Washington and Suburban
companies are required to report to
the District Supreme Court with all
convenient speed" when they learn of
any substantial transfer of gas COM
pany stock. Dean told the commission
the trustees had been careful to obey
this mandate and had notified the
commission as well as the court.
The consent decree grew out of the
acquisition of controlling interest in
the gas companies in 1881 by the
Chase National Bank and the charge
by the commission that the deal was
in violation of the La Toilette anti
merger act. Eighty-four per cent, or
100000 shares, of the common stock
which the bank purchased were de-
posted with the Washington and
Suburban Co.'S, in common law
trust organized to hold the gas COM
pany stock. The Washington and
Suburban then issued 5000 common
shares of beneficial interest and dis
tributed it among various corporations,
SO that no utility or holding COM
pany held more than 20 per cent of
the stock.
The La Toilette anti-merger act pre-
vents a foreign utility corporation
from holding more than 20 per cent
OF the stock Of any District utility
company.