The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-12-23

upon its capital Btock. As the laws OF
Massachusetts, did not allow the leasing OF
one company by another or the guarantee
Of one c%ompany's securities by another,
the agreement was ct the time IL was made
voidable. I knew then, as now, that It was
voldable; and was advised by counsel at
the time It was made, that 1t was voidable,
and would not stand IL contested, but as
the purposes for which It was intended
were for the best interests Of all concerned,
including the public, II was, without
doubt, judlcious to make it, and keep It In
force until it should be voided or the pur-
poses for which It was created ceased to
exist. BY THIS CONTRACT the Brookllne
Gas Light Company was enabled to pay
its expenses, charges and 10 per cent.
dividends on its stock AT THE Elk
PBNsE of the Boston Gas Light Com.
pany, and it's the Brookline Gas Light
Company's) $4,615,0oO of securities were
made worth the 80, 600, 900 which the
New England Gas & Coke Company have
paid for them, and when this contract Is
voided the Brooklino Gas Company will
cease TO pay It's expenses, charges and divi-
dends, and its 81, 615 900 capital and Sc
curities will be worth In the neighborhood
Of the $3,OOO,OO0 which they were worth
before this contract was entered into.
In passing upon the propriety of this
contract, or the policy Of creating and
keeping it in existence, 1t should be borne
in mind that at the time 1t was made all
the companies passed into a common
ownership, and no interest could be
wronged by a bookkeeping division Of
the common earnings; but now, under
present conditions, with the Boston Gas
Company owned by the Bay State Gas
Company of Delaware, and the Brookline
Gas Company owned by the New England
Gas & Coke Company. a great wrong would
be done the public and the Boston Gas Com.
pany and the holders OF Boston United Gas
bonds, whose principal asset is the Boston
Gas Company, II the contract was allowed
to remain in force.
Under the conditions brought ITO ex-
istence by this agreement of May 1, 1866,
the competitive warfare ceased, and the
Bay State Gas Company of Delaware began
the task of raising the necessary money to
pay over to the Standard Oil party. It's
arrangements were nearly completed when
1t met with an unforeseen and unexpected
misfortune. which entirely destroyed
all chance OF securing the necessary
cash within the time in which
the payment was due, namely, Nov. 1,
1896. Early in October certain parties,
whose motives it is unnecessary to char
acterize, secured a receivership of the Bay
State Gas Company of Delaware, thereby
tying up its entire assets. This necessi-
tated radical measures on the part of the
Bay State Gas Company of Delaware, the
owners of all the local companies, other
than the Brookline Gas Company.
To judge properly Of the events which led
up to the transfer of the management of
the local companies by the Bay State Com.
pany of Delaware to the Standard Oil party
on Nov. l, 1896, the then existing situation
must be kept in mind:
Standard OIL Purchase.
On the 3Oth day of October the Bay State
Gas Company of Delaware was in control
Of al! the local gas companies, the Boston,
South Boston, Roxbury, Bay State of Mas.
s~achusetts, n Dorchester, by actual own.
ership, and Of the. Brookline Under the
agreement of May LIST. 1t was obliged
by tho agreen,ea AZ of May LIST to pay
millions of dollars to the Standard
Oil party on Nov. 1st, or to return
to the Standard Oil party the Brooklin,
Gas Company. AS, owing to the receiver.
ship, 1t did not have control Of sufficient
assets to make the payments on Nov. 1st,
1t had a choice of two alternatives: First,
to return the control of the Brookline Gas
Company to the Standard Oil party, there
by reinstating the competitive war
fare and jeopardizing its entire inter
ests, or, second, turning over to the
Standard Oil party the temporary manage
ment of its five local companies UNDER
PROPER AGREEMENTS rs to restrictions
y GUARANTEES, and thereby preserving
it's interests, by insuring itself against
a return of the competitive conditions ex
listing prior to the making of the agree
ment of May list.
If it chose the first alternative, intricate
and dangerous litigation was inevitable
from the fact that 1t had, willis In contro
of the Brooklins Gas Company, necessaril,
so managedth The latter's affairs that 1t woulc
he impossible to return the Brookline Gal
Company in the same condition it was re
ceivcd. While. therefore, it APPARENT,
had, as above stated, the choice of tw,
things, it practically had no choice othe
than what was donc on Nov. LIST. Much ha.
been stated in the public prints and other
wise of what really took place on Nov. LIST
What the public knew occurred was tina
the so-called Bay State Gas Company o
Delaware management Of the local com
panies was turned over to the Standard OF
party. Il conducted the negotiations oil
behalf of the Bay State Gas Company O
Delaware and the local companies was
party to all the agreements which were eli
tered into, and therefore speak with au
thority.) BY the trade which wa
made on Nov. 1st, the Standar
Oil party came to the management
temporarily of the Boston, South Boston
Roxbury and Bay State of Massachusett
! Gas Companies, and became the absolut
owners of the Dorchester and Brooklin
Gas Companies. The Bay State Gas Con