Evening star., 1939-11-26
Norris Statement
On Stock Purchase
False, Says Wi||kie
Utility Leader Answers
Criticism of Deal
With Subsidiary
By the Associated Press.

By the Associated Press.
Wendell l.. Willkie, president of
Commonwealth e. Southern Corp,
last night termed completely and
absolutely false" a statement by
Senator Norris, independent, of Ne
braska criticizing the company's
purchase of stock from one of its
subsidiaries, Consumers Power Co.
of Michigan.
ut is perfectly apparent in view
of the release last Saturday by Mr..
Lilienthal David E. Lilienthal, T.
V. A. directory and the release this
Saturday afternoon by Senator
Norris, when they expected every
body to be away so that their
charges could not be answered, that
there is deliberate and unprinci-
Piled campaign in process to smear
utilities companies and their Off
cialS," Mr.. Willkie said in a state
ment.
Mr., Willkie explained that Com
monwealth & Southern, which he
said owned all the common stock of
Consumers Power, contributed ST.
100000 to the Michigan companys
common capital a year ago and
offered to receive its common stock
in payment at the rate of $50 per
share, But both the Securities and
Exchange Commission and the
Michigan Public Service Comission
advised the parent company to pay
the book value of $28 per share in
stead, he said
On November 10 Commonwealth
& Southern offered to contribute
$3,500,000 additional to Consumers
Power in another transaction, Mr..
Willkie continued, but again the
Michigan Public Service Commits
sion instructed it to pay for the
stock at book value, $28.25 per
share.
Norris Charges Old Tricks.
Mr.. Willkie said that since his
company owns all the common stock
of Consumers Power "it makes no
difference to the Commonwealth
& Southern Corp. whether it re-
ceives 125,000 shares or l share
of stock for the money it has VOL
unfairly contributed to the capital
OF the Consumers Power Co."
Senator Norris, long an advocate
OF public control of electrical power
production, said in statement that
the power trust is caught at its old
tricks"
Investors and bankers generally.
he said, had been given no oppor-
tunity to bid on the 125 .OOO-share
issue of Consumers Power. Com
monWealth & Southern, he added,
had agreed to take the issue at
$28.25 a share.
The Cleveland house of Otis &
Co, Senator Norris said, wrote Mr..
Wlllkie offering to pay a price
substantially higher to Consumers
Power for the securities.
The Commonwealth & Southern,
however, refused to give considera-
ton to the offer, in effect refusing
to permit the Consumers Power Co.,
which it owned, to get larger sum
of money for its securities" Senator
Norris said.
Says Attractive Bid Was Refused.
He added that the Cleveland
house also had offered an "attrac-
tive bid" on a proposed issue bv
Consumers Power of s28,594,o 900 in
f1rst-mortgage bonds. This offer
also was refused, Senator Norris
said
Thus it happens again." he con-
tlnued, that the holding company
is robbing its own subsidiaries in
order to enrich itself. * II
Il am wondering what the Securi-
ties and Exchange Commission is
going to do about it. am wonder
ing, too, why, after the lapse of so
much time since the passage of the
Holding Company Act, the Securi-
ties and Exchange Commission has
not compelled the Commonwealth &
Southern to comply with its terms.
Il am wondering, also, what Mr..
Wilkie was thinking about when
he announced few days ago that
private power companies could not
ref1nance their operations because of
the activities of the T. VA. 1t is
apparent that Mr.. Willkie was
wrong when he said that private
power companies could not refinance
because the T. V. A. operations had
scared investors"