The Waterbury Democrat., 1940-03-04

Ol llOlQlIlS COIllpdily IIldIlli
 Some of the A. c. and E. finan- cial operations are stark object lesson to John e. Public Investor
 Real fact is that most of the operating subsidiaries of Associ- ated Gas and Elect1.c are sound, some of them even blue-ribbon utility companies. But it appears from evidence produced by the various Investigations of the giant system that some of the Subsid- iaries have been lnilked pretty thoroughly by the holding com pany and its controllers at the top.
 Howard Hopson, czar of A. G. and E., organized four personal companies, incorporated In New foundland and owned in toto by him or his family. Hopson also set Up a tax service, an accounting service and @ purchasing service, and the subsidiary companies paid huge fees for these services.
 For instance. H0pSOn hired Frederick s. Burroughs of liar ris, Forbes and COmpany-chief bankers of A. G. and E.-and paid him $60 per hour seven hours q day. This came to around $60,00O a year, paid by enc of HOpsOn's personal com panics. Then HopsOn turned round and apportioned this charge among his subsidiary companies, but at about Sl50,00O, or more than double the amount actually paid by him to Bur- rOughs.
 However, HopSon's most lucra- tive maneuvering was in buying options on his subsidiaries. For instance, in October, 1929, one of his personal companies in New foundland took an option on 63,0O0 shares of Associated Gas and Electric Securities Go. The price to Aopson's personal company was $50 per share, although the mar ket price was then about $66.
 Then on the very same day that Hopson secured this option, Gen. eral Gas, one of his subsidiaries, decided that 1t wanted to buy 63,0O0 shares of A. c. and E. Se- curities, which 1t proceeded to do from the Hopson company at $66 and a fraction per share.
 So Hopson's personally owned company in Newfoundland got the difference, or a profit of $l6 and fraction per share on 63,0OO shares of stock. This totaled $1,119,OOO - all made in one short day.
 SUCH WERE THE ADVANTA- GEES OF A HOLDING COMPANY. LaGUARDIA FOR PRESIDENT
 Mayor Fiorello LaGuardia, who combines a sense of humor with a sense of reality. is being urged by his friends to become a candi- date for President. LaGuardia, however, always delIlurs. He says he is too busy running New York City.
 One of those who has men, tioned the presidency to LaGuar- dia is none other than Franklin Roosevelt himself.
 'FiorelIO." said FDR the last time the two men were together, "T'm for you, not only because I'm for you personally, but be- cause you know so much about government"
 "Isn't that what hc tells everybody" q friend asked La- Guardia afterward.
 Maybe" shot back the May or, but it sounds good anyway" AEERRY-GO-ROUND
 Rex Tugwell. handsome former Under Secretary of Agriculture and brain-trugter. is well under way on Q history of the Pregi- dents public careey. Tugweil has access tp all Of ROosevelt's pri- vAte papers and records. Pare L0fentz, brilliant director Of the government movies "The PiOw That Broke the Plains" and ''The Rlver", has launched q movement to turn the c0lOrful FlOrIdg keys between Key Largo and Key West. once the lair Of pirates and rumsrunners, into C national park to save them from e0mmefelalI- zaiion, 4 key man ln the Caribbean neutrality patrol ls Lt Commander Fort Callahan, Navy radio ace, who Ak C0nlninifas tlons Oflloer nt the Key West base 0f operations handles all tho messages Of the force 0f liadefs surface, surface and aerial craft llial constitutes iAe patrol,