The Washington times., 1935-08-13
REP. 0'C0NN0R
PROBES SET-UP
OF COMPANY
A. @. E. Head Protests
Against "Prying"
Into His Affairs
CONTINUED from Page ~

OuktuuC0 BIO"e go
them serves Associated affiliateS
and other corporations.
Utility and Tax Consultants, an
other personal company, was en-
gagged in advisory work, he said.
Representative O'Connor:
"Are you PRESIDENT"
81 don't know. I've been
away from business. think
Mr.. Silk is president now"
Beginrirr in 1922, he said. he
aided in building up the AsSocl'
ated system.
It was through these allied and
private corporations that Hopson
was alleged to have made huge
profits from the Associated COM
panies. He said he gave advice
on rates, taxes, valuation and
other problems.
Hopson said he and D. I. Mango.
now president of Associated Gas
and Electric Co., got control IN
1922 and began expansion through
sale of securities.
Details Earnings
He recounted that in 1922 the
gross annual earnings of the as
ISOLATED company totaled a little
more than 100000. He said:
To-day they are around $780,
100000 a year."
HopSon appeared proud over
development Of the huge system.
He asserted that Associated Gas
Securities prices, and utility Sc
curities generally, were lower than
they have been since the stock
market crash.
Representative O'Connor inter
posed:
How many companies are
there in the SyStem?"
Somebody has counted 1913
separate operating companies.
That is approximately correct.
/ am informed. We have &C
quired . few more since the
Federal Trade Commission In
vestigatiOn into power com.
panies."
COMPLEX SETUP
Hopson admitted that he and
Mango owned a Massachusetts,
trust, which owned Associated Sc
curties Corporation Of Delaware,
which owned the common stock
of the Associated Gas and Elec.
trio Corporation which, in turn,
controlled operating companies
which at one time numbered 800.
Hopson disclosed how, on the
suggestion of bankers, they re-
classified their Glass A and Glass
B stock. Glass B, which Hopson
and Mango held, retained voting
power This was in 1928.
In 1926 the company floated
Observation-Disclosures bond is
sue through Harris Forbes Com.
pany, of New York. Hopson char.
acterized this issue as the largest
utility bond issue ever distributed
in the United States up to that
time.
Protests 'sPrying"
Hopson protested against d.
vulging personal profits derived as
head of the A. G. and E. He said:
81 do not believe it proper for
these Congressional committees
to be prying into the personal
affairs of individuals"
He said that when he became
associated with the A. G.. and E.
in 1922 he was receiving 500, 900
a year salary from another utili-
ties service company. Representa-.
tive O'Connor countered:
'sYOu are a public utility and
your profits are of public inter.
est. If you take two or three
million dollars year, 1t is re-
Elected in rates."
Hopson replied:
THAT Is q gross exaggeFatiOn,
but even so 1 don't agree with
you. I'll tell you who pays for
those Services-the stockholders.
The stakeholder don't know any
thing about the business. He
pays for expert services"
HopSon said there are a half
dozen utility groups which could
be put together which are bigger
than the associated system.
During two hours of testimony
Hopson refused to divulge per-
sonal profits derived from ma.
nipulating the destiny Of the sew
eral hundred untility operating
companies which form the vast A.
G. and E.