Unpyramiding

A public utility Mother Goose book might include a section about the holding company that held the holding company that held the holding company that held the operating company that lighted the lights in the house that Jack built. For utility systems are complicated, full of little units with big units upon their backs to finance them. Last week, however, Commonwealth & Southern Corp., one of the largest of U. S. super-holding companies, announced a marked simplification of its associated companies. The result of this simplification will be the disappearance of four holding companies in the Commonwealth & Southern system.

Commonwealth & Southern Corp. was organized in May 1929, representing the pooled interests of several large utility groups. Inspiration for its organization came largely from President Landon Ketchum Thorne and Senior Vice President Alfred Lee Loomis of Bonbright & Co., Manhattan bond house specializing in utilities. Other interests joining with the Bonbrights in the formation of Commonwealth & Southern included Electric Bond & Share, United Gas Improvement, Public Service Corp. of New Jersey. Commonwealth & Southern acquired stock in many utility companies but especially control (more than 96%) of Commonwealth Power, Penn Ohio Edison and Southeastern Power & Light, all holding companies with many operating subsidiaries.

Last week Commonwealth & Southern offered completely to absorb these companies, assuming their assets and liabilities and in time eliminating them as corporate entities. It also proposed to absorb Allied Power & Light, in which it has previously held no stock interest.*

In the altogether probable event of this consolidation taking place, the operating companies controlled by the vanished holding companies will report directly to Commonwealth & Southern, which will become the one big holding company for the entire system. In addition to freeing itself from the charge of "ramification" so commonly brought against utility companies, Commonwealth & Southern feels that its dealings with the operating companies in the system (whether to finance them, to give them engineering and technical assistance, or to merge them) will be more efficiently conducted through one, than through several, holding companies.

The Commonwealth & Southern system includes operating companies serving 1,000,000 electric and 200,000 gas customers in twelve states, reaching a territory with a population of more than 7,500,000. It has assets of $1,141,000,000. For twelve months ending Nov. 30, 1929, gross earnings were more than $157,000,000. with a net of $42,182,719.

As Commonwealth & Southern stands out more clearly as great utility, so Commonwealth and Southern's Chairman Bernard Capen Cobb is more sharply focused as a great utility man. His paternal ancestors are said to have come to the U. S. on the Mayflower, his maternal ancestors on the Mary and John, the first ship to enter Boston harbor. Mr. Cobb went to Boston Latin School, then to Phillips-Andover (class of 1891). He first worked for the Pennsylvania Railroad, then with Grand Rapids Gas Co. He went to Manhattan in 1905, worked for Hodenpyl, Wallbridge & Co. and in 1911 helped organize Hodenpyl, Hardy, the successor firm. In 1928, when Hodenpyl. Hardy was acquired by Allied Power & Light, Mr. Cobb became Allied's chairman. He is also president of Commonwealth Power and Penn Ohio Edison, and a director of American Super power.

An operating man (as distinct from a finance man), Mr. Cobb is a hardworking, quick-spoken executive. He is a fishing & hunting enthusiast and each year takes two four-to-six-week vacations with which nothing can interfere. Last fall he was on one of his hunting trips when the market crashed. Mr. Cobb let it crash and kept on hunting. His reading consists largely of outdoor magazines and of biographies. He also sees nearly every play of every season. He has three daughters; lives at No. 270 Park Avenue, Manhattan.

* Allied Power & Light resulted from a merger of Hodenpyl, Hardy with Stevens & Wood. Hodenpyl, Hardy held stock in Commonwealth Power, and Stevens & Wood held stock in Penn-Ohio Edison. When the merger was completed. Allied Power & Light functioned as an engineering and supervising counsel for Commonwealth Power and Penn-Ohio Edison. Its inclusion in the unified Commonwealth & Southern system was therefore logical and necessary.

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