Loyal Respect

"I invite attention to one H. C. Hopson . . . the dominant figure and guiding spirit of the Associated Gas & Electric System. As a dominant figure he is a marvel and I think he admits it. As a guiding spirit he leaves nothing undone to accomplish his purpose. ... In my opinion under the present setup, no body can effectively regulate such an organization. It is too big, too powerful, its officials are too fast and its lawyers too smart. ... I have seen them juggle their books, juggle their cash, juggle foreclosure sales where they were both buyer and seller, juggle their taxes, juggle their lawyers, their accountants and their engineers. ..."

This blast from quiet Senator Fred Her bert Brown of New Hampshire played its part in persuading Congress to pass the Public Utility Holding Company Act of 1935 ("death sentence"). Howard Hopson, lying low ever since he was spanked by the Black investigation for lobbying against the Act, has left to his more conventional brethren in utilities the job of fighting the death sentence. Last week that fight was apparently over. Having battled unavailingly up to the Supreme Court, all the major utilities submitted plans for slicing themselves up in accord with the death sentence. For the occasion it pleased Mr. Hopson to take the limelight once more. Of all the 64 plans submitted to SEC, his was the only one completely revealed to the public.

With $900,000,000 worth of properties scattered from Staten Island to the Philippines and owned through a maze of 172 companies capped by Associated Gas & Electric, Mr. Hopson's problem was as tough as any. For all these 172 companies, the law allows Mr. Hopson only two corporate baskets, and all actual operating properties must be grouped in two geographic chunks.

Last week A. G. & E. told SEC that it would: 1) eliminate 112 companies; 2) juggle its properties into two "systems"--one consisting of power properties in New York, Connecticut, Pennsylvania, New Jersey, Maryland, Virginia, Delaware and West Virginia; the other in the Carolinas, Georgia, Florida, Kentucky and Tennes see. The first "system" is already, as required by law, almost entirely "integrated" geographically, the second obviously cannot be. For this the Hopson lawyers had an "out" which will doubtless give SEC pause-- they maintained that since each subsidiary was wholly located in a single State or adjoining States, the plan met the provisions of the Act.

A. G. & E. went on to say that it would sell or exchange 24 operating companies farther west, if SEC insisted, but would retain its Philippine properties as beyond the scope of the law. Ably playing to the hilt the new role of reformed penitent, the company announced: "While the changes . . . are of a sweeping character, obedience to the law, and a loyal respect for public opinion, demand that the task be performed in the best of faith."

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