The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-23
Trends
West Coast Utility
Move Apparently
MiscOnStrued.
by VINCENT LYONS
Times Financial Editor

L ~ lation was caused by the an
nouncement on Wednesday that
nine public utility companies.
whose stock Is owned chiefly by the
Pacific Gas & Electric Co, had ap-
piled to the California Railroad
Commission for permission 70 dis
solve. The attorney for Pacific
Gas e. Electric dropped the hint
that the move could be interpreted
as a plan Of his company to get
out of the holding company busl-
ness.
With President Roosevelt carry
ing the torch for the elimination OF
unnecessary holding companies and
H. c. Hopson. tycoon Of the Asso-
ciated Gas & Electric System,
being forced to air his relation
ship with the company under the
pressing Of Senatorial inquistitors,
the news from the West Coast ap-
peared quite pertinent.
From the wording of the dis
patch it was assumed by some peo-
pie that the public utility indus
try's opposition to the abolition OF
holding companies was oelng
broken down. Association with the
past history of the Pacific Gas d
Electric Co. and a bit OF reading
between the lines. however, mol
Gates that the utility industrys
stand is as solidified as before
Perhaps the attorney for the coast
utility was pulling some ones leg.
THE nire subsidiaries, involving
l. a combined capitalization in
excess of 1922 900. 900, in their petit
ton filed with the Railroad Com
mission asked that the Pacific Gas
g. Electric CO. take over their stock
and operate ire companies. There
is nothing novel nor unexpected IN
this development as any one on
the west coast familiar with the
business of Pacific Gas & Electric
would be quick to agree.
Before the arrival of the depres-
sion the west coast unit was reach
ing out and gobbling up public util-
ity companies doing business in the
state. Groups of units were thus
acquired from the North American
Co. and the Standard Gas 81 Elec-
trio Co. In a number of instances
control was effected through the
issuance of common stock which
incidentally, is one reason why the
Pacific Gas g. Electric has out
standing at the present time more
than 100000 shares Of S25 par
common stock.
It has been a policy of the Pacl-
fic Gas 81 Electric Co. for years to
dissolve subsidiaries and consol-
date their properties whenever
feasible. Tie Great Western Pow
er Co. of California, which with
its subsidiary interests represented
six of the nine units affected by
this weeks announcement, was
acquired in 1890 Even at that
time it was known that the units
eventually would De dissolved and
absorbed into the Pacific Gas &
Electric system.
A THOUGH the attorney for
N the company admitted that
the action of subsidiaries could be
called a desire to get out OF the
holding company business, it was
denied that the move had any con-
nection with possible Federal legis-
lation regarding utility holding
companies. The latter assertion
reeks of naivete as the thought OF
dissolution and subsequent absorp-
ton was born long before President
Roosevelt was being seriously con-
sidered as a possible candidate for
the presidency.
The Pacific Gas and Electric Co.,
the largest public utility organiza-
ton on the Pacific Coast. operates
the various properties as a we'll CO.
ordinated system supplying cleo
tricity. gas and other services to a
population of approximately 3,000,-
600 in northern and central Cali
fornia. Funded debt of the COM
pany and its subsidiaries aggregates
around 1923 100000 The company
was organized in 1905 as a holding
company.
The public is utility conscious as
a result of the recent trend of
things and grabbed bit too hastily
at the Pacific Gas and Electric at
torney's statement. Now that the
facts are known it can be seen that
the move was something that
would have followed in the ordi-
nary course of events. But it was
a good story while il lasted.