Utility Week

At the turn of the year Howard Colwell Hopson. dominant figure in Associated Gas & Electric Co., found himself in a tight fix. During the next twelve months he faced $42,000,000 of bond and note maturities. Failure to refund or pay off any of them would send one or more of its multitudinous subsidiaries toppling into the hands of receivers, might pull down the parent company. A sharp accountant with a salesman's slant, Mr. Hopson proceeded to pull many a rabbit from his fecund hat. Though Wall Street has long ceased to be astonished at the complex securities he concocts, it whooped with appreciation when he offered an issue of "baby bonds" just as the U. S. was selling anti-hoarding "baby bonds" (TIME, March 7). Last week Mr. Hopson surprised skeptical statisticians by announcing that his immediate obligations had been slashed to $2,000,000, a trifling sum for his 900-million-dollar system.

During the process shrewd, paunchy Mr. Hopson lost only one property, Rochester Gas & Electric, long coveted by Floyd Leslie Carlisle's Niagara Hudson Power Corp., and lost only voting control of that (TIME, July 25). To reimburse the banks which had financed its purchase by a group of Rochester business men, an $8,500,000 bond issue is contemplated. Though the New York Public Service Commission lashed Mr. Hopson for "milking" Staten Island Edison and refused to sanction the sale of $8,500,000 long-term bonds to pay off notes, he promptly offered to exchange the notes for a new 364-day issue. The Commission has jurisdiction only over borrowing of a year or more. All but $1,000.000 of the maturing issue was exchanged. Mr. Hopson testily denies that he is "milking" Staten Island Edison. Since in good times the parent company sunk large sums in improving the subsidiary, he can see no good reason why the child should not help the parent in sorry times.

Other steps taken by Mr. Hopson to pull himself out of his fix: 1) as with Staten Island Edison, offering to exchange new bonds for those falling due; 2) borrowing $3.500,000 last week from a group headed by Chase Harris Forbes and Halsey, Stuart & Co. to pay off holders who turned down his offers; 3) starting an intensive campaign to sell strong mortgage bonds of his operating subsidiaries to his customers and his security holders.

Lesser troubles still besetting Mr. Hopson are a suit to throw General Gas & Electric Corp., a subsidiary investment company, into receivership, and a Federal Trade Commission investigation.

Commonwealth Edison. When Samuel Insull retired from the chair of his three biggest operating companies, he left them with $65,000,000 of notes maturing this summer (TIME, June 13). One of the first moves of his successor, Chicago's hard-working James Simpson, was to arrange bank loans to take care of them until long-term bonds could be floated. Last week Continental Illinois Co. led a group which offered $18,000,000 of 5 1/2% mortgage bonds in Commonwealth Edison at a price of 93. They were quickly gobbled up and by the end of the week were quoted 2 1/8 points above the offering price. In. 1931 Commonwealth Edison sold 4% bonds at about the same price. Wall & La Salle Streets eagerly scanned the offering circular to note changes in the balance sheet, for it was thought with new audits of Insull companies heavy charge-offs might be necessary. If the bankers had revised Mr. Insull's accounts it was not revealed; the balance sheet was for March 31, fortnight prior to the Insull collapse.

Heartened by the public appetite for Commonwealth Edison bonds, bankers promptly put a $20,000,000 issue of Peoples Gas Light & Coke on the market, laid plans for a Public Service Co. of Northern Illinois issue in the near future.

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