Evening star., 1939-08-10
Gas PriceCut
Argued as
Hearing Opens
Reports Are Heard
Massachusetts,
Control Is Ended
BY DON WARREN,

BY DON WARREN.
The size of a prospective cut In
consumer rates of the Washington
Gas Light Co. was debated at pub
lie hearing before the Public Utilities
Commission today as informal re-
ports through the commission from
the company indicated that controll-
ing interests of Massachusetts trust
in the Washington company has
been ended through the current sale
OF trust holdings in the stock of the
operating concern.
A wide difference in the tabula-
tions of the commission staff and
the company over the amount of
the prospective rate cuts developed
at the outset of the hearing. B. M.
Bachman, chief accountant to the
commission, testified that opera
ton OF the sliding scale plan for
annual adjustment of the consumer
rates of the company would show
Sl63,574 to be available for a rate
cut, or, roughly, three times the size
OF the cut last year, s52,5O5.
A statement submitted bv the
company claimed that only s95.341
was available for rate cuts. 1t de-
veloped that the contest revolved
around the method of handling an
item of s134,223, representing a re-
duction in income taxes claimed bv
the company during the last year
due to losses suffered by the COM
pany IN bond refunding.
Amortization Desired.
The sliding scale arrangement
contains proviso that unusual
Items may be amortized over a
flve-year period so that a change
in consumer rates would not be
adopted on an abnormal basis. The
company argued that the S134,223,
therefore, should be amortized over
flve-year period.
The valuation of company proper
ties, on both company and commits
sion statements. was placed roughly
at $24 4,l20 900, with only a Slight diff
ference between the two estimates.
Mr.. Bachman found that the oper-
atlng expenses amounted to S5.487.-
506, whereas the company said the
cost figures should be S5.622 235. The
company and the commissions ac-
countant both found that the adjust.
ed operating revenues of the COM
pany IN the past test year amounted
to S7853.811.
lhe company reported it's return
on the valuation for the past wear
was Sl,73l 646. or 7179 per cent,
whereas Mr.. Bachman figured the
return at 81 ,866 294, or 7.737 per cent.
Under the sliding scale basic re-
turn of 7.45 per cent is allowed and
while the company keeps all it's
profits for any one year, the amount
OF the excess earnings determines
what changes in rates are to be
made next year.
Tce of Shares Held Sold.
According to information given
by Robert c. Overs. treasurer of
the Washington company, stock
brokers have sold 282, 900 or about
n per cent of the 1862 900 shares Of
the Washington company which
were held by the Washington &
Suburban Cos, Massachusetts
common-law trust. representing the
Chase National Bank and affiliated
financial interests, which have con-
trolled the destinies of the WASH
lngton company for nearly a decade.
While report of the prospective
change in ownership control was
not part of the sliding scale hear
Ing, 1t was received with interest in
official circles, since the commission
recently authorized the Washington
company to pay the parent trust
$l.O50,0O0, in the form of $4,000
shares of common stock, for the
purchase of the Hyattsville and the
Alexandria Gas Companies.
The trust already had held 327 900
OF the 100000 shares of common in
the Washington company. The
addition of the $4,000 shares raised
the trusts holdings to 1862 900 shares.
Mr.. Overs said he had been advised
all but 10000 shares of this total had
been sold, which indicated that the
trust had disposed of its control. If
all OF the 1862 900 shares are sold the
gross payment would amount to
Sl0.l20,OOO. at the price of S29. so a
share. However, brokerage charges
amount to So a share on the first
l25OO0 shares and ST share on the
remainder. so that the trust stands
10 receive a net payment of
1888 900.
Small Blocks Reported.
1t was reported that some s2.oOo,-
600 of the stock, or about 66 900
shares, have been purchased in
Washington. Mr.. Overs said he had
been advised that most of the stock
was being sold in relatively small
blocks. Harvard University is said
to have taken a sizable block. The
stock is being sold in various places
over the country.
Just what groups of stockholders
may fall heir to the control of the
Washington company and its sub
sldiaries will be determined later.
Under a consent decree by District
Court. the company is required to
give the commission and the court
formal reports on the transfer of
any of its stock. The best guide on
this point is expected to be found in
the official reports of the company
on its next stock dividend