Evening star., 1934-06-04
REVEALS DOHERTY
OPPOSED b|GL0AN
Trade Commission Shows
He Tried TO Prevent
Mitchell Deal.
By the Associated Press.

By the Associated presa
kilograms purportins TO show Henry
L. Doherty, head Of the Cities Service
Utility System, attempted to stop
Charles Z. Mitchell, former head Of
National City Co. Of New York from
financing what Doherty described as
raiding competitor, were presented to-
day 10 the Federal Trade Commission
in It's utility investigation.
The kilograms consisted Of an ex-
change between Doherty and Mitchell,
who was summoned to testify, in
which Doherty 1aid a sac. 900 900 loan
TO finance a gas pipe line from Texas
to the East would smash rates" and
demoralise the natural gas business
In the area covered.
Mitchell, however. the kilograms
said, approved the loan and the pipe
line was constructed.
Identifies Telegrams.
Stanley A. Russell, who said he was
a vice president of City Co., successor
to National City Co. until last Friday,
identified the kilograms.
1t was explained that Russell's res
ignation was in connection with the
City Co. reorganization and had no
reference to the present inquiry.
The pipe line, built by Frank
Parish, was undertaken with the help
Of Columbia Gas 81 Electricity Co.
of Ohio.
Robert Z. Healy. commission coun-
sci. said Parish vas under indiet-
ment in Chicago on charges Of using
the mails to defraud
Doherty characterized Parish IN
one telegram to Mitchell as a bad
risk from q business and moral stand.
point"
The kilograms were dated septcm-
Der %. % and "a. 1880.
Speaks Of Gas Deal"
Doherty also spoke Of what he
/ called a deal" with officials of Co.
lumba Gas, and said that in q con-
versation with these oficials they had
! admitted the Parish pipe line was
lin violation Of our previous under
standing and their only justification
was the statement they thought I was
| joking about the deal"
Healy, in questioning Russell at
tempted TO develop what this deal"
was. He asked what effect on Cities
Service natural gas markets the new
pipe line would have.
Russell said he was unable TO clarity
the situation, except that he had the
general impression this competitive
| angle was discussed.
| Robert Burns, Cities Service counsel.
in statement TO the press about the
kilograms. said 'Mr Doherty objected
to the proposed Parish pipe line be-
cause his wide experience in the nat
ural gas industry convinced him the
project was unsound.
His judgment has been vindicated.'
Text Of Doherty Wire.
The first telegram was sent by Do
herty from Ottawa, Canada, on Sep
tember ~, 1880. 1t said;
The building Of this line is bound
( to seriously affect the credit Of several
| important companies and perhaps the
entire public utility business and 1t is
unthinkable to me that you would, II
you were properly informed. permit
your company to finance an enterprise
\ which is itself Of questionable safety
and therefore q menace to the public
utility business. also an assault on ex-
iSting utilities and other projects well
underway when this project was an
nounced."
Doherty said Columbia Gas & Elec-
trio went into the enterprise in fear
that Parish would raid their tsrri-
tory"
The next day Mitchell wired
Doherty that his companys action in
connection with the loan was "di-
rected toward working out as con-
Structive solution as possible Of dis
turbed situation. rendered so by others
before it was brought TO US for con-
| sideration ."
We are informed and believe no
one in the recent arrangement wishes
TO demoralize any situation"
Charges Favoritism.
The next day Doherty wired
Mitchell: Il think if anybody chooses
TO start suit against me il will make
1t an easy matter for me to prove by
court evidence that your company in
this instance has not insisted on the
same standards as were demanded in
the back years when your institution
was being built up in reputation and
magnitude"
Doherty wired again the same day,
again expressing his disturbance, and
mentioned he had made = deal with
Crawford and GoSsler."
Philip Gossler was identified as pres
ident Of Columbia Gas & Electric.
Russell. describing the financial
transaction, said the s20, COO 900 bonds
to be noated for Parrish's Panhandle
Eastern Pipe Line Co., subsidiary Of
Missouri-Kansas Pipe Line. were based
on the expectation that Columbia Gas
would purchase a substantial interest
in the company.
Russell said Columbia did make this
purchase. He added the bonds origi-
nally we're to be sold to the public,
but. for reasons not explained, were
taken up entirely by Columbia Gas
in q transaction which yielded Ma
1