Evening star., 1941-04-20
Efforts 10 Save
Power Empires
Fade Quickly
Observers Surprised
And S. {. c. Pleased
By Easy Victory
BY FRANK I. WELLER,

have begun llquldatlng their multi
million-dollar public utility empires
in compliance with the 1885 Holding
Company Act has surprised Wash
ington oracles.
Securities and Exchange Commission.
This "truSt-busting" fraternity
had just reached for the ak to
enforce the so-called death sem
tence" clause, when up stepped
fierce old foeman apparently to
surrender with no more than a
politely formal protest.
The $837 ,503,9 United Gas I'M
provement Co., controlling 81 East
ern utilities. was the latest in line.
On April it announced forth
coming sale of 701,253 shares in it's
lucrative Connecticut Light & Power
Co. as move toward integration
of its far-fiung properties. If it
goes all the way prescribed by law,
it will sell remaining ones, with the
possible exception of single geo.
graphically integrated group which
it would be entitled to retain under
the law, provided S. E. c. approved.
Companies Are Listed.
Giant holding companies now in
tegrated, in the progress of integra-
ton or under S. E. c. order to in
tegrate, include:
Cities Service Power & Light
(assets. S4l5958,802 number of sub
sidiaries, So.
The United Light 81 Power Co.
1886, 1877 100; Al.
Northern Natural Gas Co. $685.
873.9O5; 81.
American Water Works e. Elec-
trio Co., Inc. Cs459 .842, ,O06; 1861.
Associated Gas & Electric Co. (s1,-
038 ,971 $50; l69.
Columbia Gas g. Electric Corp
1852, ,480314; Al.
United Corp. 1921 .607, ,681: 81.
Middle West Corp. 1896, ,146,-
s79; So.
American Gas & Electric Co.
| (s538, 1872 500; 28).
Engineers Public Service Co.
(S3o6, ,0IZUfI, lS).
International Hydroelectric Sys-
tenn (s464 zoe, ,997; ST..
Utilities Power & Light has been
liquidated and Electric Bond g.
Share is in allegiance.
Hard Fight Forecast.
There is no ready-made explana-
ton for the current pleasantries.
For six years the holding companies
and the administration have slugged
! 1t out toe-to-toe Only three months
ago there were Joe Louis odds" any,
where that no big company would
acquieSce to the death sentence"
clause without a constitutionality
| fight.
Wiseacres here lost their shirts
on that and they simply can't
| figure it out. Wall Street rumor
says that electric power magnates
are fearful that increasing opera
| ton costs. national defense taxes
and rigid rate regulation may impair
future earnings. and that it may be
/ easier If not more profitable to sell
their securities now. That, it says,
could explain some of the liquidation
If the 55 top holding company
systems and the 144 individual
holding companies integrate their
combined $14,498,873977 of assets,
they will thereby redistribute in
sales by their brokers the securities
of 1924 subsidiaries and affihates
operating in every corner of the
country.
Networks Must Go.
Great networks of utility man.
| agement will be broken up into
geographical units of ownership and
control. No longer, then, would a
utilities czar boss from New York
skyscraper an operating company
in Vermont or Texas or Kansas or
Oregon-or perhaps in all these
States and many others, at the
same time.
Instead, ownership of the prop
critics he now controls sight unseen,
will go back home to the banker
and butcher and baker who has
money to buy into the utility serv-
ing himself or his neighbor.
The trend seems to be for the
holding companies to sell out to
local metropolitan or regional con-
Germs, and presumably the brokers
they hire to market their securities
will offer them particularly to in
veStors in the areas served by the
operating companies they must give
up under the law.
Companies which spent large sums
trying to defeat the holding COM
pany law now are quietly condi-
tionally complying with it, although
none among them is likely to over
look possibilities for comeback if
the 81, ,143, 160,279 Commonwealth &
Southern Corp. wins its threatened
suit contesting death sentence" le-
gality. Observers believe they surely
have something in the woodpile
somewhere.
To them it seems inconceivable
that United Corp, super-holding
company formed by J. P. Morgan
bankers, has absolutely nothing up
iCo olCCNC Al WiOIl -. q
plan to "sterilize" its investments
so that it no longer can have any
control over the utility holding COM
panies whose stock it owns.
Too, they are bewildered by action
of the 81 ,267 ,536,748 North American
Co. in liquidating its holdings in
Washington, D. c., by distributing
them as stock dividends to its
stockholders.
c. & S. Test Threatened.
Commonwealth & Southern, how
ever, tough old bellwether of hold
ing company opposition to the ad-
ministration under Wendell Willkie
two years ago, informed S. E. C.
that if it ever dared issue an inte-
grafton order on its properties it
promptly would petition a Federal