Evening star. [volume] (Washington, D.C.) 1854-1972, 1941-03-12
Virginia Electric
May Be Divorced
From Engineers Co.
Parent Concern Must Give
Up One Of Two Utilities,
S. {. c. Finds tentatively
Rv the Associated Press.

EN lDe ASbOClhJeQ tIeSS,
The Securities and Exchange Com
mission announced yesterday
tentative conclusion that Engineers
Public Service Co., controlling some
s330,000,000 of utility assets. must
reduce its holding to one of two
companies to comply with the Hold
ing Company Act. Hearings, begun
a year ago, were ordered resumed
March Is.
The report was the second of its
its vast program of indignation with
respect to nine of the Nations
largest holding company systems.
The first report covered the system
topped by the United Gas Improve
ment Co.
The commission said that Engi-
neerS' choice appeared to lie be-
tween Virginia Electric & Power
Co., with SOS 100000 worth of proper
ties in Southeastern Virginia and
Northeastern North Carolina, and
Gulf States Utilities Co. with about
$64,000,000 of property extending
from the Baton Rouge NaD area to
beyond Beaumant, Tex.
Company May disappear"
In detailed report on which the
commission based its tentative find
ing, the S. E. C. utility division staff
suggested that eventually Engineers
Public Service Co. itself would dis
appear.
Yesterdays order called attention
to the commissions recent ruling
that "a single integrated system"
cannot include both gas and cleo
trio properties. This position is be-
ing contested by U. G. I.
The staff report said that En-
gineers was organized in 1925 by
Stone & Webster, Inc. for the
apparent purpose of securing con-
troll of principal companies serv-
iced by Stone g. Webster, Inc, so
as to assure retention of the service
business and forestall other hold
ing companies from securing con-
troll of such public utilities"
The systems principal business
is the operation of electric facilities
in Virginia and North Carolina
along the Atlantic seaboard, East
ern Georgia, Southern Louisiana
and Eastern Texas near the Gulf
Coast, Western Texas and South
ern New Mexico along the Rio
Grande River, Western Washing
ton in the vicinity of Puget Sound,
and also in Wyoming, South Dakota,
Nebraska Colorado, Kansas, Mis-
souri,, Iowa and Florida. Three
subsidiaries also furnish gas in
Virginia, Louisiana and Washing
ton.
Properties Are Far-Flung.
The properties in the holding
company system" the report said, !
ARE far-flung. operating subsidi-
aries of Engineers serving widely |
scattered sections Of the company. |
and the public utility operations of
each public-utility subsidiary are.
with minor exceptions, unrelated to
those of any other
The report pointed out that
during 1889 Engineers received So
367 1868 in dividends on common
stocks of subsidiaries of which Vir-
GINA Electric paid s2.222 1868 and
Gulf States s1.1200OO. The balance
of $4,000 came from Baton Rouge
Bus Co, Inc.
AS outlined in the report. this
was the prospect for Engineers:
If it chooses to retain Virginia
Electric as its primary system, it
might be able to prove its right
to retain Savannah Electric g.
Power Co. as an additional" in
tegrated system. However, it would |
be forced to dispose of its holdings
in Gulf States. Ell Paso Electric Co.
the Western Public Service Co. and
its subsidiaries in Western States;
Pudget Sound Power, and the Key
West Electric Co.
If Engineers chose Gulf States
as a primary system, it could not
retain Virginia Electric, Savannah
Electric or the other companies.