Brisker Bonds

Bondsalesmen last week stopped twiddling their thumbs and began to telephone clients.* Bankers had decided to "test the market" by offering three large utility issues. Each of the issues ($30.000,000 in Consolidated Gas Co., $10,000,000 in Brooklyn Union Gas Co., $25,000,000 in Edison Electric Illuminating Co. of Boston) sold well. An offering of $7,500,000 in Connecticut Light & Power followed quickly. But some observers were prone to temper their optimism. Edison Electric will not need the new funds until October when a $20,000,000 note issue matures. It seemed that the company's bankers, First National Bank of Boston, would not have set about raising the money last week had they not expected higher interest rates in the autumn.

Quick to attempt to cash in on the brisker bond market last week was Howard Colwell Hopson, dominating figure in Associated Gas & Electric Co., who surprised his bankers last spring when he offered a "baby bond" issue just as the U. S. was selling "baby bonds" to combat hoarding (TIME, March 7). Not selling many baby bonds, not exchanging all of its new 364-day Staten Island Edison notes for maturing old ones (TIME, June 20), Mr. Hopson has lately been in a tight fix. His company must raise $18,556,000 to meet early bond maturities. Last week he pulled not one but four rabbits from his fecund hat. To his 250,000 security holders he offered $25,000,000 in first mortgage bonds of New Jersey Power & Light Co., A. G. & E. controlled. Each security-owner was expected to buy $100 worth of bonds at a 20% discount on the generous rate of $10 down and $10 monthly. Should subscriptions fail to pour in, Mr. Hopson can make a similar offer of mortgage bonds in Metropolitan Edison Co. (Pennsylvania), New York State Electric and Gas Corp., Pennsylvania Electric Co. Despite these fine plans, A. G. & E. last week lost voting control of Rochester Gas & Electric Corp. to Rochester businessmen as part of a plan by which Guaranty Trust Co., Chase National Bank and almost every bank in Rochester advanced $8,500,000 to the company. Rochester Gas is considered a fine property. Niagara Hudson Power Corp.'s Floyd Leslie Carlisle has eyed it with approval. Acquisition of it by A. G. & E. in 1929 disturbed the Morgan-Bonbright-Carlisle utility group.

Busy Mr. Hopson was also bothered last week by a receivership suit against General Gas & Electric, a $129,000,000-in-assets affiliate of A. G. & E., and by a plea made by minority stockholders in Metropolitan Edison Co. that the Pennsylvania Public Service Commission investigate its financial structure and transactions with A. G. & E. Last week's bond-selling came on the heels of a long, substantial rally in bonds which carried the Dow-Jones averages from 65.78 on June 1 to 71.37 last week. It was on June 3 that a group of powerful Manhattan bankers, under the leadership of J. P. Morgan & Co., formed American Securities Investing Corp. to buy bonds. Last week A. S. I. C. called for 10% of its $100,000,000 capital, indicating that at least $10,000,000 has already been invested.

--During the first half of the year, domestic corporate bond issues offered for sale came to only $238,000,000 against $1,612,000,000 in TQ31's first half. $2,343,000,000 in 1930'$. Pre- ferred stock offers were $6,775,000 against $126.-000,000 and $307,000,000. Common stock offers were $4,194,000 against $122,000,000 and $926,000,000. During June total corporate financing was only $29.000,000.

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