The Washington times., 1933-05-26
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vi GIlS LcdIulS' AAdAAAhCA SAAACAS
were constantly out. Every one
looked a little tired. The clock
which by committee decision, will
give the signal for a four-day rest
at l p, m. was the focal point
of many a glance.
Howard admitted there was
only a secretary and IAN office
boy" in the corporations Newark
office. The whole executive staff
of the corporation appeared tt
consist of himself. a vice presi
dent, the secretary, and the office
boy.
Denies It "COntrOls"
Howard denied that the United
Corporation controlled" its sub
sidiary utilities. He said:
Il believe we have very
great influence with these COM
panies-but not control"
Pecora discussed with him the
meaning of the word control.
Howard said:
81 mean legal control"
Then Pecora brought out the
holdings of the United Corpora
ton in May this year.
It owned 62,370 shares of Mo
hawk Hudson, 988,271 of Public
Service of N. j., 6,066,223 shares
of United Gas. 1t had holdings
too, in Columbia Gas, Columbia
Oil and Gas, Niagara Hudson
Power, Commonwealth and
Southern, Consolidated Gas of
N. Y, Electric Bond and Share
Co., Lehigh Coal and Navigation
Co., American Waterworks, the
Baltimore Consolidated Gas and
several others.
On December, 1882. the cost
of these holdings was fixed at
$592,821,S64 In three years it
had grown from a $56,000, 600
corporation.
Map Shows Setup
Pecora introduced a colored
map of the United Corporation
setup and Howard couldn't
identify it. He looked at it
blankly and silently handed it
to George Whitney. Whitney
said: "
II never saw it before"
It was shown to all the part
ners but Morgan then, but none
knew anything about it.
They had quite a time with
the map, and no one could either
identify it or deny that it was
q true picture of the United set
UP. Senators passed it around.
looking interestedly at its bright
colors.
Pecora next showed the inter
locking directorates between the
United Corporation and the var
ious companies in which it owned
stock. Two Morgan partners
George Whitney and Harold
Stanley-are directors of the
United Corporation.
John E. Zimmerman, president
of the United Gas improvement
Co. (Philadelphia). a director in
United Corporation. was shown
to be a director in a dozen other
utilities. Pecora drew this in
formation from Howard.
Holdings Run High.
The purpose of this phase Of
the inquiry was to show that
Mogan, long regarded as only a
great banker, has become IN
reality the utility king Of
America" and that his cantrol
and holdings in utilities-through
his great banking firm-ran into
hundreds of millions of dollars.
Howard then listed his own
utility directorships. He served
on a half dozen utility boards.
Howard drew a deep chuckle
which developed into guffaw,
from u. P" when he mentioned
Brooks Bros" among his utility
directorships. Echoing Morgan's
laughter, Pecora said:
Gust name the utility COM
panies. Brooks Brothers is a
clothing concern"
Pecora asked Howard how
much cash the corporation re-
ceived in January, 1929. He testi-
fled it was $20,7O0, ,801 10. He
said $700 ,8O1.1O came along with
the stock in other utility COM
panies received from Morgan.
The $20,000.000 came from sale
of stock. Half came from Morgan
and half from Bonbright Electric
Company, each getting 100000
shares of common stock and
100000 option warrants, each
warrant emitting the owner to
buy an additional share of com,
mon at $275O.
Warrants Explained
Pecora then took up the TIA
200 optional warrants given Nor
gan's firm by the United Corpora
tion. Howard said the warrants
gave the holders the right to buy
United common stock at $27 a
share. Said Pecora:
'N0w suppose the market
value of the common stock went
to $50 a share. any one holding
these warrants could demand
issuance of stock to him at
$27.50 a share. Was that of any
advantage to the cOrpOratiOn?"
After a pause, Howard said:
"WelI suppose at that time,
the assets behind the shares
was S271s, it would depend en-
tireIy on the market value of
the stock"
Pecora seemed puzzled by the
reply as were others.
seYnn wouldn't exneCt any