Business: Massachusetts Swap

Recurring in the Public Utility Act of 1935, which was aimed at eliminating holding companies not “demonstrably useful,” is the phrase ”geographically and economically integrated.” One idea of the Act is to encourage rearrangement of power properties in the best interests of the local population. Toward this end two big New England holding companies asked the Securities & Exchange Commission last week to approve a swap of various Massachusetts gas and electric properties. Of no national moment in itself, the deal was the first attempted under the Utility Act, may mark the start of a general reshuffling among the less “demonstrably useful” companies.

New England Power Association proposes to give New England Gas & Electric Association controlling interest in two Plymouth County utilities whose lines are connected with those of New England Gas & Electric subsidiaries in regions around Cape Cod.* In return, New England Power Association will receive important blocks of securities in various subsidiaries which will give it at least 95% control in each case.

* New England Power Association is controlled by International Hydro-Electric Co., the utilities affiliate of International Paper & Power Co., while New England Gas & Electric Association is an affiliate of Associated Gas & Electric Co.