Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-12-22

a 1929 peak of 72ss to q in 1899. It's
SIS preferred stock dropped from a
1880 peak of 93s4 to 5. Behind those
prosaic figures were hidden losses of
millions of dollars to thousands of
stockholders.
Hopson, declining like his for
tunes, suffered heart attack He
was in an oxygent tent for weeks.
The death blow to his holding
company phantasmagoria was dealt
by the Securities and Exchange
Commission year ago 1t ruled
that some of the important sub
sidiary companies in the Hopson
system were not in condition to con-
tinue pouring dividends upward
through the chain of holding COM
panies.
That left the top holding company
unable to meet payments on secur-
ity issues. The endless" chain was
ended.
Last January in Federal Court at
Malone, N. Y. the Associated Gas g.
Electric Co. filed a petition for re-
ownership under the bankruptcy
laws.
Hull of Ship Still Afloat.
The hull of Hopson's ship was
still afloat. The utility companies
still were selling electricity and
Ice. But Hopson's financial super
structure had gone with the big
wind that carried away the boom
era.
Court appointees now are reor-
ganizing the system. 1t is the big
gest reorganization of it's kind in
history.
Under present plans, the inter-
est of holders of A. G.. & E. class
B stock and common stock will be
wiped out. They're at the end of
the line of creditors and there
aren't enough assets to go around.
Meanwhile A. G. & E. class A
stock-725s in 1929-is selling for
1-16-6A cents a share.
Many Wall Streets had mentally
written off Hopson's financial &C
robatics as simply an extreme ex-
ample of the accepted practices of
a bygone heyday, but last May the
Government struck a crashing dis
cord in this amiable swan song.
The authorities declared that
Hopson's juggling succeeded less
through ingenuity than through
transgression of the statutes.
They said that he had cheated
100000 investors, not only through
manipulation of securities, but also
through such simple techniques as
padding expense accounts, and that
he had gone too far in the practice
of providing various services to con-
trolled companies through ones
own private company at high rates.
His activities, the Government add
ed, had prevented 100000 utility
consumers from getting rate reduce
lions they deserved.
The Government said 100000
in Illicit profits had been taken out
of the Associated Gas & Electric
System.
(Hopson once acknowledged
that from 1929 to 1888 he made
over 100000 out of the sys-
tenn; report to the Federal
Power Commission said that
from 1884 to 1898, 10 Hopson-
controlled service companies COL
lected $11,000,000 from the sys-
tenn, of which Hopson and 9TH
ers received $4,000,000)
Three Others Indicted.
Three other men were indicted
with Hopson: Frederick S. Bur-
roughs, former business associ-
ate, who has since died, and Charles
M. Travis and Garrett A. Brown
back, Hopson's lawyers.
The Travis-Brownbeck firm, the
Government said, had received be-
tween 100000 and $6,000,000 for
services to Hopson and his COM
panies in the last IL years.
For months, counsel for Hopson
maintained he was too sick, ply
sically and mentally, to go to trial.
They told the court Hopson had a
delusion that he was about to swell
up and burst.
Meanwhile, the Government in
dicted him again, along with
Brownback and two other lawyers,
George M. Lepine and Edward F..
Huber, for conspiracy to defraud
the Government of $1,886OOO in
taxes by hiding $17,O00,000 in prof
its in 1929 in a company incorpo-
rated in Newfoundland.
On November 6, tossing his head
and moaning, Hopson tottered into
court from a sanitarium on the arm
of a male nurse, finally to face
trial.
The defense contends that Hop
sons activities were bona-fide and
within the law, and calculated to