Evening star., 1935-11-16
FIGHT TO FORCE
NORTH AMERICAN
FR0MD. c. MAPPED.
Roberts Acts After Com.
pany Attempts to Cancel
Withdrawal Plan.
ACTION WILL BE BASED
UPON LA TOILETTE ACT
Peoples Counsel May Appeal to
Utilities Commission or Go Di-
rect to D. C. Supreme Court.

A legal fight to force the North /
American Co. out of the Washington
utilities field was planned today by
William A. Roberts, peoples counsel
before the Public Utilities Commis-
sion.
Roberts contemplated move fol-
lowed the action of the North Amer
ican in attempting to withdraw from
the Securities and Exchange Commits
sion its plan for divesting itself of its
District holdings, which include the
Washington Railway & Electric and
the Potomac Electric Power Cos.
Request to withdraw the proposal
was made by the North American as
result Of the notice of the Utilities
Commission that it intended to ini-
tiate proceedings looking to a reduc-
tion in the rate of return allowed the
electric company under the sliding
scale agreement.
Roberts Has Two Plans.
Roberts has two plans in view. As.
the first step, he probably will make,
a formal appeal to the Utilities Com,
mission to call public hearing and
order the North American to divest it,
self of its holdings in Washington.
Should the commission do that, the
company could appeal to the courts
An alternative course would be al
| direct appeal to the District Supreme
Court, requesting that the United
States attorney for the District pro-
| ceed against the ownership, or request
the Securities Commission to retain
| jurisdiction and itself force abandon
ment of control.
Any action Roberts takes will be
based on the La Toilette anti-merger
act Of 1918, which forbids any hold
ing company from owning 10 per cent
or more of the stock of a local
utility. Roberts said the North
American owns 81 per cent of the
common stock of the Washington
Railway & Electric Co. and enough
preferred stock to insure its control.
The railway company owns the power
company.
The North Americans action in
seeking to withdraw its original plan
to relinquiSh control of its Washing
ton properties did not come as
surprise In utility and financial circles,
which several days ago heard rumors
such step was contemplated. The
plan proposed the substitution of l..
625,000 new shares of stock for the
65,000-odd shares of common stock
in the railway company.
j. F. Fogarty, president of North
American, explained that the request
Tor withdrawal of the proposal to the
Securities Commission was made in
view of the uncertainty" created by
theS move Of the Utilities Commission.
Consequently" he said, "the rela.
tionship of the North American Co.
with the electric and principal trans
portation utility in the District of Co.
lumbia and adjacent territory in Vir-
ginia and Maryland remains un-
changed"
Roberts Cites Three Motives.
North Americans original plan to
move out of the Washington field was
attributed by Roberts two weeks ago
to three motives:
l. To comply with the public util-
lIleS ACT OF 1888, which, however, will
not become effective for two years.
2. To release control at time when
there is a good market for the security.
1t had been estimated that the com.
pany would have made approximately
SIS, 100000 under its plan.
3. The threatened invasion of the
Washington utilities field by the Asso-
ciated Gas & Electric Co., which re-
Gently acquired control of the Virginia
Public Service Co., which serves elec-
tricity to a major part of Arlington
County and other sections of Virginia.
Roberts, however, did not believe
compliance with the utilities act was
the principal reason for North Amer
leans move to release control of its
Washington properties. Since he ex-
pressed that opinion Federal Judge
Coleman of Baltimore has held the
act unconstitutional.