Business: Steam Condensed

Standing on an open plot in Manhattan near Madison Avenue and 59th Street in the early 1890s was a mechanical contraption that would have been an inspiration to Cartoonist Rube Goldberg. Snaked around the plot in a vast maze of loops, twists and double turns were several miles of pipe, through which was pumped a grimy mixture of water and pulverized coal. Purpose was to demonstrate the possibilities of pumping coal from the mines, an idea which was pronounced feasible in its day by men like Frick and Carnegie, and won an award at the Chicago World’s Fair in 1893.

The man who conceived and built this contraption was Wallace Andrews, one of John Davison Rockefeller’s associates. Mr. Andrews’ coal pipeline was only one product of his fertile imagination. A popular dandy with a flair for equipage and flowered vests, in 1890 he organized Manhattan’s first ice manufacturing company. Before that he had started to pipe live steam underground to supply Manhattan buildings with heat. Oddly, the successful steam idea was ridiculed even more than the coal dream, which came to naught. Mr. Andrews burned to death in a fire that leveled his Fifth Avenue mansion in 1899, but the little steam company whose gross revenues the first year were some $200,000 grew into New York Steam Corp., world’s biggest central heating concern with assets of $61,000,000 and annual revenues of more than $10,000,000.

Big as it is now, New York Steam has had more than its share of financial troubles, including a receivership in 1918. After the subsequent reorganization the company boomed, profits rising to a record $2,000,000 in 1931. Since then its revenues have been relatively stable but its costs have soared, chiefly due to higher taxes—up from $867,000 to $1,400,000 in the last five years. Last week New York Steam suddenly passed dividends on its preferred stocks. The 7% issue broke 19 points on the news while the 6% issue, which had been around $100, sold as low as $75 per share.

Though New York Steam appeared to be condensing at an alarming rate, there was little reason for a preferred stockholder to dump his shares. At one time control of New York Steam rested with the Andrews Institute for Girls in Willoughby, Ohio, the executors of Founder Andrews’ estate having paid a bequest in Steam stock. Eventually huge Consolidated Edison of New York bought control, now owns 96% of the common stock. Consolidated plans to merge Steam with the rest of its utility business, has asked the New York State public utility commission to approve an exchange offer by which holders of Steam’s preferred issues will get prime Consolidated preferred.

Physically as well as financially is Consolidated linked to Steam. Just as power companies exchange power over interconnecting lines, so Consolidated and Steam are interconnected for exchange of steam. Manhattan’s tall towers need most steam on early winter mornings when electric loads are light. So to New York Steam Consolidated has long lent steam from the boilers in its generating stations. In summer New York Steam returns the compliment. Steam’s all-time peak load was Feb. 9, 1934, when the mercury in Manhattan thermometers shriveled to 13° below zero.