Evening star., 1939-12-01
North American Move
ToLighten ". R. &E.
Holdings Studied
Unexpected Dividend
Arouses Interest in
Future Control
By EDWARD C. STONE.

The special dividend declared on
North American Co. common stock
In the form OF certificates of partici-
pating units of beneficial ownership
of common stock in the Washington
Railway g. Electric Co. will result in
the distribution of approximately
5000 shares or per cent of the out
standing Washington Railway &
Electric common stock, according to
information received here from
North Americans headquarters in
New York.
The announcement of this unex-
pected dividend in Washington Rail-
way & Electric stock has given rise
to great deal of discussion in the
financial district here as to any pos
sibility of the North American Co.
having plans to give up control of
the Washington Railway & Electric
Co., under the Holding Company Act
as it relates to public utilities.
Company officials are silent on this
point, merely stating that this spe-
cial dividend gives North American
common stockholders an opportunity
to participate directly in its invest
ment in the common stock OF the
Washington Railway & Electric Co."
Control Now in Limelight.
The action is considered by some
utility experts as the first step to-
ward distributing to North American
common stockholders control Of its
utility properties serving Washing
ton. The move opens the way for
possible compliance with section IL
of the 1885 Public Utility Act insofar
as disposing of interest in this par
aicular public utility is concerned, IN
the opinion of investment dealers.
However, North Americans newly
elected president, Edward L. Shea,
Jays that nothing definite has been
decided or has the company any def
mite program in mind regarding any
future distribution of Washington
Railway & Electric stock. The new
move places the North American Co.
in a flexible position regarding any
such steps in the future, he inti-
mated
The special dividend is payable
December 20 to North American
stockholders of record December 6.
Each participating unit will repre-
sent ownership of 1/40th of a share
of common stock of 500 par value
of Washington Railway e. Electric
Co. and the special dividend will be
at the rate of one participating unit
for each so shares of North American
common stock. AS no certificates for
fractional units will oe issued, stock
holders will receive cash at the rate
of 80 cents per share of North Ameri-
can common stock in lieu OF frac-
tions of units.
Equal to SIPS Per Year.
The certificates for participating
units are to be issued under a de-
post agreement, with Bankers Trust
Co, as depository, which gives to the
holders of the certificates full pro"
portional interest in all distributions,
rights and voting rights of the de-
posted shares of Washington Rail-
way common stock, and in dividends
paid on such stock after December
81, 1889. Such dividends have been
currently paid at the annual rate OF
$50 per share, which would be equal
to S1.25 per annum for each partici-
pating unit.
The special dividend has been fig
ured on the basis of the present bid
price of $500 share for w. R. & E.
stock. The bid on the Washington
Stock Exchange yesterday stood at
$3.50 a share. Members of the Wash
ington exchange, however, state that
no stock is being offered for sale at
$3.50 or $500 a share, or anywhere
near that price. The stock is so tight
" held that they doubt if any
would be offered for sale at $670 a
share
The stock paid four 50 dividends
and s14 extra last year making $50.
The same amount is expected this
year.
Chief w. r. g. E. Investments.
The principal investments of
Washington Railway g. Electric Co.,
a subsidiary of the North American
Co., consist of the entire common
stock of Potomac Electric Power Co.
and one-half of the capital stock of
Capital Transit Co., both operating
in the District of Columbia and vi
cinity. The North American Co. at
present owns 62,197 shares, or $3.50
per cent, of the common stock and
1927 shares, or 1909 per cent, of
the preferred stock of Washington
Railway & Electric Co., together rep
resenting 5002 per cent of the total
voting stock of that company.
The special dividend, just declared,
marks the second time that steps
have been taken by the North Ameri-
can Co. in connection with the dis
position of Washington Railway g.
Electric common stock. The Wall
Street Journal recalls that shortly
after the Public Utility Act of 1885
was made LAWN November, 1886
North American undertook the sale
of its control of the Washington
company through banking group
at price to net the parent around
$42,000000. This program, however,
was abandoned when the Public
Utilities Commission of the District
of Columbia instituted rate proceed
ings against the Washington con-
Germ.
In the 1885 plan, it was the ulti-
mate intention to reorganize the
capital structure of the Washington
concern and accomplish Is for one
split-up of the stock. AS the Wash
ington concern operates under
Federal charter, such action would
require congressional sanction in ad-
dition to the stockholders approval,
1t was pointed out in the financial
district today.
Washington Gas Net Lower.
Net income of the Washington
Gas Light Co. in October amounted
to $l8,231, a decrease of $38, 1895 from
the same month year ago, accord
Ing to the monthly statement filed
with the Public Utilities Commis-
sion Oneratjnp revenues in Octo-