Evening star., 1939-07-26
Sale Of Two Suburban
Gas Companies
Is Approved
Washington Cos Light
Wins Sanction on
Commissions Terms

today authorized the Washington
Gas Light Co. to purchase the
nearby Hyattsville Md and Alex
andria Va) Gas Cos. for 81 05O,OOO
payable in $4,000 shares of official
stock to be issued by the local COM
pany.
The purchase is being made from
the Washington Suburban Cos, a
| Massachusetts, common law trust
controlled by the Chase National
Bank, which also owns a controlling
interest in the local gas light COM
pany.
The Washington Gas Light Co.
also controls the gas companies in
Rosslyn, Va, and Rockville, Md.
Today's order, which authorizes
the local company to take over all
the outstanding securities of the
two outlying companies, ends three
years of effort on the part of the
gas light company to negotiate the
sale from the parent trust. Pre-
vlouS applications were denied by
the commission because it consid-
cred the price excessive or disap-
proved the suggested method of
payment.
1ntegrated Service Seen.
The local company gave as it's
reasons for the merger its desire to
1ntegrate service in the Capital
and vicinity and the need for the
parent trust to divest itself under
the integration requirements of tbs
Holding Companies Act.
The first formal application by the
gas light company was filed with the
commission September II, 1896, in
which the company sought to take
over the capital stock and certain
obligations of the two nearby COM
panles for a cash considera ton of
81 ,375 900. On October /, 1886. the
request was denied on the ground
that the acquisition at the price
offered would not be in the public
interest.
Several months later in March,
1887, the local company again filed
application for authority to issue to
the parent trust 12.5OO shares of
$3.50 cumulative convertible pre-
ferred stock, in payment for the two
suburban companies. But in Sep
tember Of the same year the appli-
cation was withdrawn at the request
OF the gas light company.
In January of 1888 the local COM
pany again made application to be
allowed to take over the securities
OF the two companies in question
on substantially the same terms as
IN the application of March, 1897,
and a request for formal hearing
was also made. The commission,
however, in March denied both the
application and request for hearing
Reconsideration Denied.
Inc following month the parent
trust asked for reconsideration,
which was again denied.
In proceedings up to this point
as well as in informal conferences
with representatives of local COM
panles, the parent trust and bank
ing interests, the commission an
nounced its opinion that the merger
under the terms and conditions sug-
gested would neither be in the pub
llc interest nor in the interest of
the local company.
Last February, however, the COM
pany again sought permission to ac-
qulre the Alexandria and Hyattsville
units. this time for payment of
81 ,25O,0 900 payable in $3.50 and cum
ulative convertible preferred stock.
on the basis of an assigned value of
$l02 a share. Formal hearings on
TINS proposal, which involved a total
OF 1925 shares of the preferred
stock, were held last April and con-
sumed nearly 1000 pages of testi-
mony, with 40 exhibits.
Commissions Terms Accented.
During this hearing Utilities Com
missioner Richmond Keech asked
officials of the local company if
they would consider any other terms
than those which they offered. The
officials asked that consideration be
given their offer, but indicated that
II this was not acceptable and the
commission had terms to suggest
which would be acceptable, they
would like to know them.
Accordingly, last month the COM
mission denied the application, but
suggested that purchase price of
81 ,050,O00 might be considered rea-
sonable provided payment would be
made in the issuance of not more
than $4,000 shares of common stock.
The local company was given until
August l to make application under
these conditions. The parent trust
was to stand the cost of issuing
the stock.
Last July 10 the controlling trust
notified the local gas light company
OF its willingness to accept the terms
and three days later the local COM
pany petitioned the commission for
permission to take over the two
nearby companies under conditions