Deals & Developments

Insull Lop. Into bankruptcy last week went National Public Service Corp., intermediate holding company for the "Insull" properties in the East, chief subsidiary of National Electric Power. In receivership a fortnight ago, the company sought to have its five Manhattan banks (Chase National Bank, Central Hanover Bank, Manufacturers Trust, New York Trust, Chemical Bank) reach a standstill agreement on their loans of $20,000,000. When the receivers failed to accomplish this they resigned in a huff. The action means that the bulk of the Eastern part of the great utility system has been lopped away, will probably break up. Middle West Utilities is almost certain to lose most of its $40,000,000 investment in the common shares of National Electric. Many Eastern bankers and utility tycoons have always felt that Mr. Insull erred in his "invasion" of their territory and have expected a realignment of the properties.

Venture's End. Two years ago Abram Edward Fitkin, a confident, testy builder and vendor of public utility systems, sold control of Pacific Public Service Co. to Standard Oil Co. of California. The purchase put Standard into several new fields. Through subsidiaries P. P. S. operates the largest bottled spring and distilled water business in the world and 20% of its revenue comes from this source. It also sup plies electric light, power and natural gas to 80 California communities in two areas. Most important of these areas is the industrial region in Contra Costa County (along the northeast shore of San Francisco Bay) which includes the plants of Johns-Manville, Associated Oil, Union Oil, Hercules Powder, American Smelting & Refining, U. S. Steel, Zellerbach Paper. The other district includes the cities of Santa Cruz (seaside resort), Gilroy, Watsonville, Hollister and San Juan. P. P. S. also owns 21 plants for the production of butane (liquefied) gas, one of which (at El Centro) is largest in the U. S. Of its total revenue, 47% comes from these sources. It also owns ice and cold storage slants and a 12-mi. refrigeration pipeline that runs through the business district of Los Angeles, serving office buildings, markets and theatres.

Last week Standard of California closed this venture by selling its 90% voting control of Pacific Public Service to Pacific ias & Electric Co. for an undisclosed price. Pacific Lighting, holder of the remaining 10%, also sold to P. G. & E.

Habana y Trenton. American Cigar Co., now a subsidiary of American To bacco Co., last week was jumping the U. S. tariff wall. The duty on finished cigars is greater than that on raw tobacco, so certain of American Cigar's factories are being moved to Trenton, N. J., where it is expected that better labor conditions will also lower production costs. The raw tobacco will be cured, processed, stripped, blended and rolled in Havana, then shipped to Trenton under bond. Factories being moved include Havana Cigar & Tobacco Factories, Ltd., H. de Cabanas y Carbajal and others, all controlled by American Cigar's subsidiary Cuban Tobacco Co. Their brands, on which price reductions are likely, embrace: Corona, Bock, Henry Clay, Carolina, Villar, Manuel Garcia Alonso, La Meridiana.

Steel Fusion. For at least two years the steel industry has expected that Newton Steel, a small independent, would find its way into the William Gwinn Mather group of iron & steel properties. Last week expectations came true when Corrigan-McKinney Steel, indirectly controlled by Cliffs Corp., made an offer for Newton. Because Newton is in a poor position to withstand many more months of Depression it was taken for granted the offer would be accepted.

Corrigan-McKinney has a plant at Cleveland which is rated as one of the best in the land. Its production is small, between 1% and 2% of the U. S. total. The Mather-Eaton interests acquired control of it from four women relatives of former officials including Laura Corrigan, onetime waitress, widow of the founder's son "Young Jim" Corrigan (TIME, March 31, 1930). It sells many steel bars to Newton. Newton was formed in 1919 with a plant at Newton Falls, Ohio; in 1929 it started work on a $7,000,000 plant at Monroe, Mich., closer to Detroit. Last year it lost $890,000 and it is expected that Corrigan-McKinney will have to lend it money.

Steel operations throughout the land last week dropped to 12%, lowest figure on record. June pig iron production was at the smallest rate since 1896. Steel scrap sold at the lowest price on record, pig iron at the worst in 17 years.

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