Evening Star Newspaper, September 29, 1936, Page 25

Washington News TWO ARE INDICTED ON BLACKMAILING ALLEGATIONS HERE New York Lawyer and For- mer School Teacher Are Defendants. ALEXANDRIA BANKER WAS ALLEGED VICTIM 14 Other True Bills Are Reported on Various Counts by District Jury. An indictment charging a New York lawyer, who sought nomination for Congress, and a former Oklahoma *schoql teacher with blackmailing and conspiring to blackmail Carroll Pierce, president and trust officer of the Citi- zens' National Bank of Alexandria, was returned today by the District grand jury. The defendants—Samuel Leighton Frooks, 52, of Jackson Heights, N. Y., | and Mrs. Mary Krieger, 35, of the Kennedy-Warren Apartments — were arrested several weeks ago in down- town hotels after investigators allegedly made arrangements for Pierce to meet them with $2,500. Frooks was taken into custody at the appointed place, while Mrs. Krieger was arrested in another hotel nearby. * With what is described as an intent to extort $2,500, Frooks and Mrs. Kreiger allegedly made certain accu- sations against Pierce and claimed he had promised Mrs, Kreiger employ- ment for life in the Citizens’ National Bank, the indictment charged. Second Count. 1 A second count of the true bill charged the man and woman with con- spiring since August 1 to commit the blackmail. | According to Assistant United States | Attorney Roger Robb. the scheme was concocted several weeks ago when Mrs. } Krieger went to Alexandria and leased & safe deposit box. In doing so, she became acquainted with Pierce. | Later, she is said to have threatened to sue the bank president if he did | not employ her as she claims he| promised. Mrs. Krieger allegedly engaged Frooks as her attorney, and he made | several trips from New York to talk | with Pierce. | Frooks told Robb he had been prom- ised a fee of $1,500 to represent Mrs. | Krieger. Robb said there have been previous complaints against Mrs. Krieger for allegedly making false claims for damages. | Frooks’ campaign manager, L. J.| levisee, said the lawyer is a candi-| date-at-large for the Republican nom- ination for Congress from New York. He ran in 1910 and 1920 for nomina- | tion to the Assembly and in 1922 was | Republican nominee for Kings County | judge. He was appointed special as- | sistant to Attornev General John | Bennett of New York in 1934. He is | at liberty under $5,000 bail, while Mrs. Q Krieger is in jail. ! 14 Other Indictments. Fourteen other indictments also were reported today. One was the re- sult of a Justice Department investi- gation of what was termed a wide- spread white slave conspiracy, head- quarters for which was in the 1400 block of Belmont street. Named as conspirators were Mary | Sherman, alias Mary Hipple: Joseph Sherman, Joseph Marback, Ida Eliza- beth Jackson and Jean Gordon. They also were charged with an actual vio- lation of the white slave traffic act in bringing a girl here from West Vir- ginia for immoral purposes. Others indicted were: Louis D. Barbozon, housebreaking: James H. Patton, non-support of minor | children; Horace W. Trice, Charles E. ! Hodge, Jesse Davis and George W.| Windsor, housebreaking and larceny;i James L. Jackson and Pete Castanzo, | assault with a dangerous weapon; | Jasper Stotts and Fred B. Rhodes, grand larceny; Fred B. Rhodes, forgery; Nathan Sondheimer, larceny | of mail, and George H. Dunnington, | false pretenses. The grand jury ignored charges of housebreaking and larceny against Richard A. Lenion, and of joyriding | egainst Ernest R. Smith., LATIN AMERICA HELD FIELD FOR COMMUNISM Link With New European Con- | ception of Statecraft Reported Through Foreign Capital. The “dominance of foreign capital” in Latin America may contribute to the growth there of such doctrines as communism or fascism, George How- land Cox, director of George Wash- ington University’s center of inter- American studies, told students in a course on current Latin American problems last night. This condition and “the great land- ed estates and labor systems,” he said, “present fertile fields for doctrines which promise panaceas for the evils of the last four or more centuries.” ‘The lecturer expressed hope, how- ever, that “out of the Pan-American Peace Conference at Buenos Aires in December may come workable sug- gestions which will bring stability along the lines of democracy known in the United States.” —_— Named on Crime Committee. Robert Lee O'Brien, jr., 1431 Man- chester lane, has been named a mem- ber of the Crime Committee of the United States Junior Chamber of Commerce, it was announced today. ‘The group is composed of 36 young business and professional men about the country. — BAND CONCERT. By the Soldiers’ Home Band in the bandstand at 6 p.m. today. John 8.:M. Zimmermann, bandmaster; An- ton Pointner, assistant bandmaster. ‘This will conclude the series of out- door concerts. Indoor concerts will begin Saturday, October 17, at 5:30 p.m. Orchestral concerts will be given each Tuesday, Thursday and Saturday evening "throughout the Wintet and early Spring, beginning at 5:30 pm. A Barred Pupil and Tutor @he Foening Stap WASHINGTON, D. C, [SCHOOL LAW TEST Lois Kemp, 2010 North Adams street, Clarendon, Va., on right, barred Mrs. Delano Luce, 3607 R street, WORK COMPLETED ON MERIDIAN HILL U. S. Accepts Final Park Improvements After Offi- cial Inspection. The extensive improvement of Meridian Hill Park, on Sixteenth street, was completed yesterday when. the Government accepted the final work following an official tour of in- | spection, according to an announce- ment today by C. Marshall Finnan, director of National Capital Parks. The park was completed after years of development at a total cost of $2,500,000, for improvements and ground. A decorative feature will be & fountain set in a niche hung with stalactite crystals from the roofs of caverns at Luray, Va. The fountain already is in operation in the niche and the stalactites will be placed at the back of the niche, adding color to the development. The | stalactites, Finnan said, already are packed up and will be sent to Wash- | ington without delay. P. W. A. Funds Used. As part of the $1,000,000 P. W. A. local park improvement program, the latest work in Meridian Hill has been made possible. Finnan said Horace W. Peaslee, Government architect with the P. W. A, who formerly was employed by the Parks Office, made the inspection trip yesterday and had | been & consultant in the latest phases Lof the project, fust as he was in the early stages. Tree wells have been planted seven | feet in concrete on the great terrace at the top of the cascades to hold 16 Elm trees. Permanent seats of ornamental scrubbed concrete, which | leaves the pebbles exposed to view, | have been set in place. Extensive landscaping has been accomplished | on the hillsides, east and west of the cascades. Sycamores, cedars, holly hedge, various shrubs and ground cover have been planted. Walks in Garden. Walks and a drainage system have been placed in the hillside garden, Finnan said, and the entire park has been equipped with new lights. The fountain in the lower terrace at the | foot of the cascades has also been illuminated. Officials explained that the assessed value of the land comprising Meridian Hill Park is $1,423,121 and that, with the money just spent on improving this park, work estimated at a little over $1.000,000 has been accomplished since the Government took over the property. FEDERAL EMPLOYES WANT SESSION HERE| Committee Conducting Survey to Determine Advisability of District Bid. A committee named by the District Federation of Federal Employes’ Unions is conducting a survey to determine the advisability of bidding for a national convention of Federal em- ployes in Washington in the near future. < Members of the committee, ap- pointed by President Joseph Stansfield at the last meeting of the District Federation, which is affiliated with the National Federation of Federal Em- ployes, includes Robert W. Cushman, Library of Congress, chairman; Louis A. Rosafy, adjutant general's office, and Miss Pearle Cooper, War Depart- ment. A national convention here, Cush- man said, would prove an excellent stimulus to increased union member- ship andfocus attention upon the federation's work. The Nationu» Federation has held one convention here, its organization meeting in 1917. rom District of Columbia school, being tutored by a private tutor. —Star Staff Photo. FREE FEDERAL CARS COST D. C. $14.000 Yearly Loss in Revenue Is Cited in Support of Plea for More Funds. Free automobile tags furnished the Federal Government for its official cars operated in Washington, coupled with the fact these vehicles are ex- | empted from the personal property tax, | are saving the United States about | $14.000 a year, it was disclosed today by | District officials who are building up a case to show the inequity of the | present $5,000,000 Yederal contribu- tion to the expenses of the municipal | government. | Data being collected by the District | officials will be turned over to J. L. | Jacobs, Chicago efficiency engineer and tax expert, who was appointed by rPl’EsidenL Roosevelt to direct a com- | prehensive study of fiscal relations be- | tween the Federal and District govern- | ments, Government on motor vehicle exemp- tions alone exceeded $50.000 last year. Most of this was represented by the 2-cent-a-gallon tax on gasoline, which the United States is not required to pay. Tetal Since 1924 Is $400,000. Since imposition of the gasoline tax 12 years ago, District officials calcu- lated that the savings to the United States on gasoline tax amounts to | more than $400,000. In the last fiscal | year the Federal Government pur- chased in the District 2,540,904 gal- | lons of gasoline, which would have | vielded a tax of $50,818. For the 1935 fiscal year the United States bought | 2,027,017 gallons of gasoline, which would have produced & tax of $40,540.34. | The average saving in the gasoline | tax, it was stated, amounted to about | $35.000 a year over the 12-year period. | The saving to the Federal Govern- ment on the operation of its motor vehicles, however, constitutes only one phase of the information District offi- cials plan to furnish Jacobs. The | data not only will show the added ex- | pense borne by the District because it | is the seat of the Federal Government, i but will go into various other elements | revealing what the United States would have to pay if it could be taxed the same as the private property owner, Other Facts Checked. Tax Assessor Pred Allen already has reported that the Federal Govern- ment’s tax-exempt real estate holdings in the District increased nearly 62 per cent in the last six years during a period in which the Government’s lump-sum contribution was reduced from $9.500,000 to $5,000,000. The Highway Department is com- pleting a report which will disclose the cost to the District of paving and maintaining streets abutting Govern- ment reservations. As soon as_various District officials complete their reports they will be checked by Maj. Daniel J. Donovan, auditor and budget officer, before being transmitted to Jacobs. GIRLS’ CLUB TO MEET New Columbia Heights Group Directed by Miss Graves. The newly organized Girls’ Club of Columbia Heights will hold its first meeting Saturday at Powell Junior High School under direction of Miss Margaret Graves. The club, which is under auspices of the Columbia Heights Community ' Center, is open to girls between the ages of 9 and 16. The Boys’ Club of the community will begin its regular Fall program Priday and throughout the year will meet on both Friday and Saturday nights instead of on Pridays as in the past. The Boys’ Club now has an enrollment of 119. Blind Peanut Vender Plans To Appeal to Mrs. Roosevelt The blind street peddler arrested and fined yesterday for selling ice cream and peanuts near the White House grounds plans to seek the aid of Mrs. Roosevelt, who recently inter- ceded in behalf of Steve Vasilakos, veteran peanut vender. The blind man, Felix Desdrito, 29, told Judge Isaac R. Hitt in Police Court he was the sole support of seven children. He was fined $5. Desdrito was arrested by Park Police- man Arthur D. Cook in the Ellipse, south of the White House. Through his wife, Desdrito plans to seek permission from the White House to peddle peanuts in nearby parks. He said he was unable to make a living for his big family in unrestricted areas, and did not want to go on relief. ) Desdrito, who lives at 35 Poplar avenue, Takoma Park, Md., lost his sight after he had been pummeled about the head while a lightweight boxer in the Navy. He served in the Navy from 1021 to 1925, he said, and fought as “Little Dempsey.” The blind hawker denied he had any wish to “muscle in” on Steve’s territory. He explained he merely wished to work in parks behind the White House and keep off streets where he was in danger of speeding automobiles. Mrs. Roosevelt recently wrote Dis- trict Commissioner Allen Trequesting that Steve be allowed to remain on the stand he has occupied for the last 28 years. City and Park Police subsequently were ordered not to molest him. | The total savings to the Federal| BYVIRGINIA FATHER IS DUE THURSDAY Dr. Ballou Must Answer Suit Seeking Instruction for Girl, 11. OPPOSING SIDES ARGUE MEANING OF STATUTE Orie Says It Makes Admittance Mandatory, Other That It Only Gives Permission. ‘Whether the law governing enroll- ment of non-resident pupils in the ‘Washington public schools is “permis- sive” or “mandatory” will be argued in District Court Thursday, when Dr. Frank W. Ballou, superintendent, will be called on to answer an ap- plication for a writ of mandamus compelling him to permit the enroll- ment of an 1l-year-old Clarendon (Va.) girl in Gordon Junior High School. The writ was sought yesterday by John 8. Kemp, an official of the Works Progress Administration, in behalf of his daughter Lois, who last June com- pleted her studies at Fillmore Ele- mentary School, near Gordon, on Thirty-fifth street. Before schools opened last week, Dr. Ballou announced, with the sanc- tion of the Board of Education, that all junior high schools would be closed to non-residents, at least until af'er the initial enrollment. The order was issued because of acute overcrowding in the junior high schools. 100 Non-Residents Apply. Lois was one of about 100 pupils from Virginia and Maryland who ap- plied for enroliment and was turned down, Her father, however, through Rob- | ert E. Lynch, attorney, contends that | refuse enrollment because the law provides that “all pupils whose par- ents are employed officially or other- wise in the District shall be admitted and taught free of charge in the | schools of the District.” Dr. Ballou based his order barring non-resident puplls on an opinion by the late Corporation Counsel William W. Bride, which held that the law was rmissive” and not “manda- tory.” Lynch contends the law is “mandatory” and must be obeyed. When Chief Justice Alfred A. Wheat set Thursday for a hearing on the order, school authorities immediately referred the case to the corporation counsel's office, which will represent them at the hearing. Schools Exceed Capacity. Dr. Ballou pointed out that Gordon was only one of the junior high schools crowded beyond capacity. Gordon was constructed to accom- modate 1,148 pupils. Its enrollment now is approximately 1,300, and is more than was accommodated there 1 last year, The superintendent also said that if the court holds the law mandatory and orders the enrollment of Lois Kemp “conditions of overcrowing, already acute, will be terrible.” Vernon E. West, chief assistant | corporation counsel, and Thomas Gil- lespie Walsh, an assistant corporation counsel, will represent the board in the litigation. — 130 TAXI DRIVERS Yan Duzer Presents Certificates to Premier Group at Banquet. Thirty drivers of the Premier Cab Association who have been operat- ing three years or more without an accident that required a settlement of more than $11 were presented with safety certificates by Traffic Director William A. Van Duzer last night at a banquet held at Ruty’s Restaurant, 524 Eleventh street. Two hundred atended. In a brief presentation speech Van Dozer lauded the association for im- pressing upon its drivers, through the direct token of safety certificates, the jmperative need of careful driv- ing “day in and day out.” “It is the person who relaxes his vigilance temporarily that causes a majority of our accidents.” he said. “These 30 men, in particular, should be examples to private car operators of the results that can be effected through a steady, consistent manner of careful driving.” Richmond B. Keech of the Public Utilities Commission and Assistant Traffic Director M. O. Eldridge also were present as guests. Arthur Reilly, radio commentator, was master of ceremonies in the entertainment program which followed the dinner, REGIONAL DAHLIA SHOW HAS ICKES AS PATRON Secretary Ickes is to be a patron of the First Annual Regional Dahlia Show, to be held Saturday and Sun- day at John Burroughs School, Eight- eenth and Monroe streets northeast. Mrs. Whitman Crass of Chevy Chase, Md., will be a patroness. The show, which is expected to be the largest of its kind ever held here, is sponsored by the Woodridge Dahlia Club, which is affillated with the American Dahlia Society. Growers from all of the city and its environs are invited to compete. ‘The show will be from 2 to 10 p.m. Saturday, reopening Sunday from 2 to 9 pm. The school will be open at 7 am. Saturday, and all exhibits must be in place by 1 p.m., when the judging will begin. Gambrill to Speak. Representative Stephen W. Gam- brill, Democrat, -of Laurel, Md., E‘ nounced today he would address the Ladies’ Auxiliary of the Eastport Democratic Club at Eastport, Md. A kY school authorities had no right to | WIN SAFETY HONOR| TUESDAY, SEPTEMBER 29, 1936. il it Only, in this case, it was two in collision with the brick truck at Fourth and L streets mortheast today. FRP i tons, and they nearly buried a laundry truck driver after he was The laundry driver, Robert Holston, 25, colored, 786 Morton street, es caped with shock and bruises, however. Edwin Lee, 36, of 917 Twelfth street northeast, a passenger in the laundry truck, and Alvin brick truck driver, were unhurt. ‘ Legs Broken Tilman, 24, of 128 D street, the STREET CARKILS | AN AT ROSSLYN Chapin King, 32, Dies in| Hospital—Seven Hurt in Traffic Mishaps. A Virginian was killed and seven other persons were injured in traffic accidents in Washington and nearby States during the last 24 hours. The fatality occurred when Chapin King, 32, of 2 Wayne street, Arlington, | Va., was struck by a Washington & Old Dominion Railway street car a half mile west of Rosslyn last night. He died two hours later in George- town Hospital. Railway officials reported King was | lying between rails on the tracks| when struck by an east-bound pas- senger car. One leg was amputated and his scalp cut. King was a son of Henry King, who lives near Fort Myer. George W. Dove, 37, of 1522 A street northeast, a fireman attached to No. 8 Engine Company, was seri- ously injured yesterday when he slipped and fell beneath the wheels of a fire engine while answering an alarm in the 100 block of Nineteenth street southeast. He was taken to Emergency Hospital where he was found to have fractures of both legs. Lorraine Todd, 20, colored, 120 Seventh street southeast, received a leg injury that required treatment at Providence Hospital when she was struck by a hit-and-run automobile at Fifth street and Virginia avenue southeast. Injured In a collision on the Lee Highway about 16 miles from Wash- ington, Josephine W. Bucke, 67, of Arcanum, Darke County, Ohio; Mamie M. Berry, 56, of 1301 Massachusetts avenue, and William De Cherniss, 17, also of the Massachusetts avenue ad- | dress, were taken to Emergency Hos- pital for treatment last night. All three suffered cuts and bruises. Other accident victims were Calvin Bailey, 22, of 712 Quincy place, in- jured about the face and body when struck by a taxicab at Connecticut avenue and Woodley road, and Louis White, 7, of 535 Fifteenth street northeast, who received a scalp injury when hit near his home by an auto- mobile. NAVY WANTS PLUMBER Labor Board Recorder Receiving Applications for Yard Job. Applications for plumber at the ‘Washington Navy Yard will be ac- cepted by the recorder of the Labor Board there until Thursday. The salary ranges from $7.96 to $8.92 per diem for a 40-hour, 5-day week, less a 3'; per cent retirement annuity reduction. Applicants must have completed a four-year appren- ticeship or have four years' practical experience. Full information may be obtained at the Civil Service Commission at Seventh and F streets or the navy yard. Six Officers Called To Subdue Boxer In Barber Shop He Wouldn’t Pay for Shave, Operator Declares. They turned out the reserves last night when Lloyd Lowrey, 56, of the 1100 block of Pennsylvania avenue southeast, a “retired” boxer, refused to pay for a 25-cent shave. As a result Lowrey was to be taken into Police Court today on three charges of assaulting policemen, an- other of intoxication and still another of disorderly conduct. The trouble started after Lowrey got a shave in a barber shop in the 700 block of H street northeast and, it was said, refused to pay for it. Policemen R. J. Tompkins and A. H. Gwinn of No. 5 precinct were called. Lowrey, police said, went into battle without hesitation. The first officers were reinforced by Inspector William E. Holmes, Detective Sergts. Henry Jett and Hugh Robey and Policeman Tom Carter. In the melee Lowrey was hit over the head with a policeman’s stick. He was taken to Providence Hospital in a patrol wagon to have the scalp wound treated. Police said Lowrey then tore the bandages from his head. He was returned to the precinct and locked up, pending today’s hearing. ” FIREMAN GEORGE W. DOVE, Whose legs were fractured when he slipped beneath the rear wheels of a fire truck while running alongside the vehicle as it approached a brush blaze near Nineteenth and B streets southeast. INCREASE IN PRICE OF MILK APPROVED 15 Cents Per Quart to Ob- tain in Two Southeastern Virginia Areas. By the Associated Press RICHMOND, Va. September 20.— The State Milk Commission an- nounced today that October 1 the re- tail price of milk in the Norfolk- Portsmouth and Newport News-Wil- liamsburg markets would be 15 cents & quart. J. S. Agnew, commission chairman, | i said a present difference of 1 cent a quart between the Newport News and Norfolk retail prices had “created an unatisfactory situation due to the proximity of the two markets and the interchange of milk between the two areas.” ‘The new price of 15 cents will mean an increase of 1 cent a quart in Nofolk and Portsmouth and 2 cents in Newport News and Williams- burg. Agnew said a “50 per cent increase in the cost of grain goods and the devastating effect of the drought that has prevailed in some sections of the Newport News - Williamsburg milk shed” made it necessary to increase the price to producers. “After giving very careful consider- ation to the distribution” in both markets, “the commission is con- vinced that the distributor is not able to absorb this increase at this time,” he said. Agnew pointed out the 1-cent in- crease in Norfolk and Portsmouth rep=- resented approximately 7 per cent, “while other commodities have in- creased more than 50 per cent.” There were no changes in the price of buttermilk, skimmed milk and cream | to the consumer in the Norfolk-Ports- mouth market, but the retail price of milk was raised 1 cent on both quarts and pints The new pint price will be 9 cents. There was no change in the 5-cent price on half pints. High test milk also was increased 1 cent each on pints and quarts to 10 and 17 cents, re- spectively. - El Lagarto’s Owner Agrees To Put Craft in Smithsonian El Lagarto, George C. Reis' sturdy old campaigner, has gone to the power boat wars for the last time, and if plans now under way materialize, the speedster from Bolton Landing, N. Y., will spend the rest of her days in the Smithsonian Institution. When El Lagarto went out of the second heat of the President’s Cup race Saturday, after bowing to Herbert Mendelsohn’s more powerful and newer Notre Dame almost at the end of the first 15-mile struggle, it was reported her engine had failed. Later it developed that in maneuvering in the choppy Potomac for the start of the second heat Notre Dame acci- dentally rammed E1 Lagarto, which sprang a leak, forcing Reis to the side~ lines after s fruitless effort to keep going. —Star Staff Photo. |.G.C. BAN URGED ON AUTO-RAILERS |Capital Transit Co. Asks That Board Report Be Upheld. The Capital Transit Co. today called on the Interstate Commerce Ccmmission to uphold a report of a joint board recommending denial of { the petition of the Arlington & Fair- | fax Railway Co. to operate a motor- rail service between Rosslyn, Va., and downtown Washington. | The Capital Transit brief was filed | in response to one from the Arlington | | & Fairfax asking that the board be | | overruled. Yesterday William A.| Roberts, people’s counsel for the Dis- | trict, filed a brief in which he also | requested that the permit asked by | the Arlington & Fairfax be denied. | The Capital Transit says the Ar- lington & Fairfax brief is largely in | |the nature of reargument of the | points previously brought out, “The record clearly shows,” it says, “that there is at present adequate transportation service as to both equipment and frequency of trips be- tween Rosslyn, Va., and the District of | Columbia to serve all passengers, and | to & large extent service of the appli- | cant in Virginia is duplicated or par- | alleled by service from other car- riers.” Capital Transit reiterated that it is | furnishing adequate service in the Dis- trict, and is prepared to enlarge its service to meet the needs. In asking that the joint board be | overruled, Arlington & Fairfax said, | | in effect, that the board had gone ouz: of its way to find reasons why the new service should not be established. Roberts, in his brief, insisted there | Was no merit in the claim present serv- | ice is inadequate, for the sole reason | | that transfers are required at Rosslyn. “If this were the case, a certificate of convenience and necessity must |be granted by the Interstate Com- | merce Commission in every instance in which a longer through service seeks to parallel and compete with a transportation agency covering only | part of a given route,” Roberts said, 'OLD POLICE STATION RESTORATION ASKED. | | Mid-City Association Cites Need of No. 2 in View of Increase in Crime. Re-establishment of No. 2 police | | precinct in its former headquarters | | on Fifth street between M and N, | streets was urged by the Mid-City | Citizens' Association at its first Fall | meeting last night. | In a resolution introduced by Dr. | F. Thomas Evans the association de- | clared crime has been on the increase | in the present second precinct area | since the merger of precincts 2 and 8 several years ago. The No. 2 area now includes approximately 100,000 | residents. | The Woman's Bureau of the de- | partment now occupies the former | headquarters of the old second pre- | cinct. Adoption by the Board of Educa- tion of the proposal to change the opening hour of schools from 9 to 9:30 am. was urged, so pupils might avoid the “rush” hour. ‘The association voiced “hearty ap- proval” of the improvements made in the last several months in the city's | parks. Surveying the damage, Reis decided El Lagarto was through. Extensive rebuilding would have been necessary to put the boat back in condition, and with 14 years of service behind her and recent changes in Gold Cup rules this was not advisable. A friend suggested that El Lagarto be placed in the Smithsonian as a monument to American motor boat racing, and Reis fell in with the idea. John A. Remon, head of the Presi- dent’s Cup Regatta Association, was enthusiastic and he said today that the offer will be made to the Smithsonian this week. Meantime, Reis is trailing El Lagarto back to Bolton Landing to remove outward traces of the damage. El Lagarto won the President’s Cup three times; captured the prized Gold Cup three years in a row, and twice took the National Sweepstakes, ocie and Géheral PAGE B—1 FOR GAS MERGER SUBJECT 10 QUIZ Commission Analyzes Wash- ington Co. Proposal to Finance Deal. HEARING ON SUBURBAN PURCHASE RESUMED, Be Canceled if Plan Meets Approval. BY DON §. WARREN, Proposal by the Washington Gas Light Co. to sell $3,000,000 of preferred stock to raise funds for the purchase of the Alexandria and Hyattsville gas companies—all controlled by the same trust—and for improvements to its own plant, was subjected to careful study today by the Public Utilities Commission. Experts of the commission were ex- pected to analyze the proposed stock deal in testimony before the commise sion this afternoon when hearings are resumed into the requested merger of the Weashington and suburban cone cerns. The testimony of commission exe perts was awaited with special interest | since the line of questioning pursued | by commission counsel as well as com« | mission members themselves has indi~ cated there are numerous points on which they are not satisfied as to the public angles of the financial side of the program. Disclosure of the details of the Washington company plans for financing the merger came late yese terday after Hinman D. Folsom, com= mission counsel, had spent several hours in pointed cross-examination of two company witnesses, E. J. Boothby, vice president and general manager, and Robert C. Owers, treasurer. Proposes to Pay $1,375,000. The company has proposed to pay $1375,000 for the assets of the two | suburban concerns, but the $3,000.000 preferred stock issue is intended to cover also certain improvements of the Washington plant, which its offie cials held would be necessary. A compelling reason why tje trust seeks to have the Washington com- pany buy the two suburban concerns before the trust disposes of its own- ership of 84 per cent of the Washing« ton company stock was disclosed today at the District Building in a search of old records in the case. In the agreement between the Wash- ington company and its parent is an indenture by which it is specified that the trust must be allowed to buy enough of any common stock which may be issued by the Washington company to perpetuate its 84 per cent control. Lack of Funds—or Desire—Cited. Reports reaching the District Build~ ing are to the effect the trust does not have funds with which to buy— or has no desire to buy—84. per cent | of & common stock issue which might otherwise be issued by the Washing- ton company to finance the proposed purchase by it of the two suburban companies. Therein lies the reason, some ex- perts say, why the Washington come pany proposes to finance the pure chases of the suburban companies by sale of preferred stock to the public. Further, should the trust dispose of its 109,000 of the 130,000 shares of the common stock of the Washe ington company before the Washe ington company acquires the two sube urban companies, the trust would be left with the two suburban concerns on its hands. Experts recall that the Washington company has been paying dividends of 18 per cent on the basis of $20 par value. The Alexandria company has never paid dividends. The Hyatts- ville company paid $2 per share for the year of 1933 and again for the | year 1934, plowed into the company its profits of 1935, and in 1936 paid & quarterly dividend of 25 cents, or 81 per share for the year. $600,000 Debt Cancellations. A striking feature of the financial plans, as drawn from Owers by the commission counsel, was that the Washington company proposed to can« cel $600,000 of a debt of $800,000 owned by the Alexandria company pravided the merger plans were ape proved by the commission. ‘This is planned as a means of “put« ting the Alexandria company on its feet” so that it could pay interest on the remainder of the debt, but, Owers explained, the 6 per cent ine terest would not be charged if the company did not earn enough. The three operating companies are controlled by the Washington and Suburban Cos., a Massachusetts com- mon-law trust, which represents the Chase National Bank and associated financial interests. Loans From Outside. Folsom brought from the company witnesses that the first step in finance ing the proposed purchase of the two suburban concerns would be to seek the loan. from non-Washington banks, of $1,375,000, with which to pay cash for all the securities of the Alexe andria and Hyattsville companies. That sum would be borrowed on notes running 18 months and paying 4 per cent interest. Later, Owers and Boothby explained, it is proposed to issue preferred stock to the maximum of $3,000,000 to re- pay the bank loans and to provide funds for Washington company im- provements. The commission was told the Washington company would need “considerable” money soon — some $500,000 this year. The new stock would be issued in blocks as the money was needed. “Bankers say preferred stock will find a ready market in the District,” Owers said. This is a good time to sell securities. The stock will sell at $100 par and provide dividends of about 4!, per cent.” Folsom broke in to ask if the Wash- ington and Suburban Cos, the holding trust, would accept the pre- ferred stock as payment for the zile to the Washington eompany of the Alexandria and Hyattsville companies. “No,” replied Owers,