MERGER OF GAS COMPANIES

TUESDAY, APRIL 15, 1930

UNITED STATES SENATE,

COMMITTEE ON THE DISTRICT OF COLUMBIA, Washington, D. C. The committee met, pursuant to call, at 2 o'clock p. m., in the committee room, Capitol Building, Senator Arthur Capper, chairman, presiding.

Present: Senators Capper (chairman), Gould, Blaine, Robsion, Glass, and Copeland.

The committee had under consideration S. 4066, which is here drinted in full, as follows:

[S. 4066, Seventy-first Congress, second session]

A BILL To authorize the merger of the Georgetown Gaslight Company with and into the Washington Gas Light Company, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Public Utilities Commission of the District of Columbia is given jurisdiction and power to permit and authorize the Georgetown Gaslight Company and Washington Gas Light Company to consolidate or merge upon such conditions as may be approved by the said commission, provided the said commission shall determine that such consolidation or merger will be in the public interest; and upon such consolidation or merger said the Georgetown Gaslight Company shall thereby and thereupon, without further proceedings, be and become forthwith dissolved and merged into the said Washington Gas Light Company; and all the property of every kind, character, and description, rights, privileges, and franchises of said the Georgetown Gaslight Company shall, subject to encumbrances or liens thereon to secure the bonds or other securities issued by said the Georgetown Gaslight Company, and to the payment of any and all other valid claims against or indebtedness of the Georgetown Gaslight Company existing at the time of such merger, pass to and unto and become and be vested in the said Washington Gas Light Company as its property, with all the powers, rights, privileges, and franchises now possessed by either or both of said companies, including the right in the said Washington Gas Light Company to institute and prosecute in its own name any action or actions in connection therewith: Provided, however, That pending actions against the Georgetown Gaslight Company may continue against the Georgetown Gaslight Company until the merger of said companies. Actions or claims against said the Georgetown Gaslight Company filed after the said merger shall be brought against the Washington Gas Light Company.

Washington Gas Light Company, after such merger, shall have the right and franchise to lay and construct, and to extend, matintain, renew, replace, relocate, remove, and/or repair, whether now or hereafter laid or constructed, gas pipes and mains together with all appurtenances, connections, attachments, and appliances, in, under, along, and/or across the streets, avenues, roads, alleys, lanes, and other public places and ways in all parts of the District of Columbia for the transmission, distribution, and/or sale of gas within and/or through the limits of the District of Columbia for heat, light, refrigeration, fuel, power, and any other purposes for which gas or any by-product thereof is now or may hereafter be used; subject, however, to the provisions of the act of June 11, 1878, entitled "An act providing a permanent form of government for the District of Columbia"; to the provisions of the act of March 3, 1893, entitled "An act making appropriations for the expenses of the government of the District of Columbia

for the fiscal year 1894"; of section 8 (public utilities law) of the act of March 4, 1913, and any other laws or regulations applicable thereto.

SEC. 2. For the purpose of enabling Washington Gas Light Company to provide for extensions to its distribution system, for additions, betterments, and improvements, and for other corporate purposes, the Public Utilities Commission of the District of Columbia is given jurisdiction and power to permit and authorize said Washington Gas Light Company to increase, from time to time, the amount of its capitalization by the authorization and issuance of additional capital stock, common or preferred, or both, with or without par value, in such amounts, and for such considerations-and in respect of stock preferred as to dividends or assets, without voting rights, or with limited voting rights, and having such terms, qualifications, and conditions-as may be approved by the commission. The commission is likewise authorized to permit the said Washington Gas Light Company to change all of the shares of its capital stock now authorized, issued, and/or outstanding to the same number of shares of stock of no par value.

All shares of capital stock of Washington Gas Light Company hereafter issued for which the agreed consideration shall have been paid or delivered to the company and all shares of capital stock of the company heretofore issued as well as shares into which such shares heretofore issued may be changed shall be deemed and taken to be fully paid and nonassessable and not subject to further call or assessment, and there shall be no liability to the company or to creditors of the company on the part of any subscriber to or holder of such shares; and any or all shares of capital stock, bonds, notes, and/or other securities of Washington Gas Light Company now or hereafter issued may be sold, transferred, assigned, or issued to, and/or acquired, held, owned, controlled, assigned, transferred, disposed of and/or voted (if having voting rights) by any person, individual, partnership, association, trust, corporation or other entity, subject, however, to the provisions of paragraph 54 of section 8 (Public utilities law) of the act of March 4, 1913.

Said Washington Gas Light Company may, subject to the approval of the Public Utilities Commission, amend its charter so as to make any such change or changes and/or increase or increases and/or classification or reclassifications, by following the same procedure and complying with the same requirements as are now prescribed in section 639a of subchapter 4 of chapter 18 of the Code of Law for the District of Columbia as amended to June 7, 1924, in respect of a change of name by a corporation, and thereupon its charter shall be deemed to be so amended without any further or other act or procedure.

SEC. 3. All charters, statutes, acts and parts of act, laws, ordinances, and regulations inconsistent with or repugnant to the provisions of this act, but only so far as inconsistent herewith or repugnant hereto, are hereby repealed.

The CHAIRMAN. The committee meets to take up bill 4066, to authorize the merger of the Georgetown Gaslight Co. with and into the Washington Gas Light Co., and for other purposes.

I think it might be well first to have a statement as to the bill and what it contemplates, and the facts as to the situation which seem to make it necessary to have legislation of this sort.

Mr. Lambert will you make a statement as to the bill and the conditions here in the city which makes this legislation necessary?

STATEMENT OF WILTON J. LAMBERT, REPRESENTING WASHINGTON GAS LIGHT CO.

Mr. Lambert will you give us your name and who you represent here to-day?

Mr. LAMBERT. I am representing the interests that have recently acquired the Washington Gas Light Co., or 108,000 plus shares out of 130,000 total issue of the stock of the gas company.

The CHAIRMAN. That is, you mean, that you represent the consolidated company?

Mr. LAMBERT. No, sir; the Washington Gas Light Co. alone. Of course, there is no stock of the Georgetown company held outside of

the Washington company. That is to say, the Washington Gas Light Co. is the legally authorized owner of practically all of the stock of the Georgetown Gaslight Co. with the exception of such shares as are necessary to qualify directors.

The CHAIRMAN. What was the total issue of stock?

Mr. LAMBERT. The total issue of shares of stock of the Washington Gas Light Co. is 130,000 shares of a par value of $20 each.

The CHAIRMAN. What is this new company? How many shares and what is supposed to be the value of that stock?

Mr. LAMBERT. Well, there is no new company. The Washington company already owns the Georgetown company; that is, it owns the stock of the Georgetown Gaslight Co. and has done so for some years; but one of the objects of this bill is to enable the Washington company and the Georgetown company to merge or come together as one company, to wit, as the Washington Gas Light Co., and eliminate all further existence of the Georgetown Gaslight Co.

Senator ROвSION. What are the reasons for it?

Mr. LAMBERT. One reason is that it will enable the putting into effect of a good deal of economy.

Senator ROBSION. Economy to whom, to the company or to the users of the gas?

Mr. LAMBERT. We assume that what is economy to the company is economy to the consumer.

Senator ROBSION. Do you give us an assurance that there will be an adjustment of gas rates?

Mr. LAMBERT. I am going to explain the bill. On the question of the reduction of gas rates we have Mr. Burroughs here from New York, who appeared before the commission, and who is much better able than I am to advise you about that.

I might say, however, that in the hearing before the commission he promised a substantial reduction, as I recall it, of not less than 10 per cent of the present rates.

Senator GLASS. Why may you not do this without legislation? If your company owns the other company, why may you not practically do the thing without legislation?

Mr. LAMBERT. That brings us back to somewhat ancient history. The Washington Gas Light Co. was chartered by Congress, and under that charter the company is to-day operating. That charter was issued in 1848, at a time when we had no incorporation law and no code in the District of Columbia. There has never been any provision made by which corporations that were chartered by Congress could avail themselves of the rights and privileges and advantages of the corporation code which Congress has since enacted.

Senator GLASS. Then you are seeking a new charter with increased power?

Mr. LAMBERT. No; we are not after a new charter. We are continuing on under our same charter, but we ask for new powers in connection and within the scope of that charter, and the right to avail ourselves of certain features of the corporation law which this Congress had already approved for the District of Columbia.

The CHAIRMAN. Well, I have seen something in the papers to the effect that we have a law in the District of Columbia enacted many years ago, which is supposed to forbid mergers or consolidations or combinations. It was sponsored by the late Senator La Follette.