The Washington times., 1935-11-02
WREC DIVORCE
MOVE HAILED
BY NEW HEAD
McCIeIIand Sees North
American Out of
Local Picture

Wider distribution of the own
ership of Washington's utilities
among Washington residents will
result from the divorce Of the
North American Company from
it's holdings in the Washington
Railway and Electric Company,
DR.. William Mcclellan, president
of the VIRGO, stated today in
explaining the application of the
giant utility combine to the Sc
curtieS Exchange Commission for
permission to substitute 1925, 900
participating shares for the 65,-
600 WREC common shares it now
holds.
"I welcome the move" he de-
clared. 1T is in the interest of
the utilities of Washington. 1t
will drive the North American in
terests out of Washington and
place local utility control in local
hands"
Asked as to whta would prevent
the North American Company
from reacquiring control of local
utilities through purchase of the
participating shares in the open
market, Mr.. Mcclellan asserted
The North American Company
will not buy any of this new stock.
They have other uses for their
money. I know that they won't
buy, and I know that they won't
own single share"
Aid Small Investors
Mr.. Mcclellan, who assumed
the presidency of WREC yester-
day, pointed out that "to the best
of his knowledge" the last bid on
WREC common was somewhere
around $3.50 a share. Pointing to
the fact that Is participating
shares are to be issued, on SEC
approval, for each of the WREC
common shares and underwritten
at $50 per share, Mr.. Mcclellan
stated that they would be in the
reach of the smaller investor.
He added that the shares will
be listed on the New York and
Washington Stock Exchanges.
If any objections against the
plan are being considered at the
SEC, they have not been voiced
yet.
The District Public Utilities
Commission, seeking light on the
proposal, today forwarded letters
to the Washington Railway and
Electric Company, to Mr.. McCIel-
Ian, president of the concern. and
to the Securities and Exchange
Commission requesting copies OF
the prospectus filed from each OF
the companies involved.
Holding Act Effective Soon
In some circles, the belief was
expressed that the action of the
North American Company at this
time was taken to circumvent the
provisions of the public utilities
holding company act, which go
into effect December /.
Under the holding company act,
applications of holding corpora
tions to sell or buy controlling
interests in other companiC1 must
first be subject rigid scrutiny at
the Securities Exchange Commits
sion.
In other quarters. it was as
serted that the purpose of the ap-
plication at this time was to take
advantage of a relatively stable
and high level market for utilities
stocks.
designations of William F. Ham
from the directorate and from the
presidentcy of the WREC, and OF
Robert V. Fleming and Daniel j..
Callahan, simultaneously with the
announcement of the North Amer
lean Company's application to the
SEC, came as surprise to many
in the financial circles of the city.
Informed quarters, however, as
serted that the resignation Of all
three was motivated by desire
to avoid possible applications Of
the personal liabilities" clause OF
the Securities Exchange Act.
The PUG probe into the pro"
posed shift of utilities ownership
here will be pushed by Peoples
Counsel William A. Roberts, it has
been learned.