Business & Finance: Twelfth Billionary

Nicholas Frederic Brady, 49, Chairman of the Brooklyn Edison Co., was in Rome last week. He had been in its vicinity for several weeks and expected to be there about a month longer. But in his offices at 80 Broadway, Manhattan, close to noon one day last week, were other directors of his $153,000,000 company which supplies without competition all the electric light and power that Brooklyn, a district of 2,250,000 people uses. Brooklyn Edison directors were agreed with Chairman Brady and his very important co-director John D. Ryan (of Anaconda Copper fame) that their company should sell out to the $740,000,000 Consolidated Gas Co., New York City, through an exchange of stock.

That decided at 80 Broadway, a message sped around the corner to the National City Bank Building on Wall Street.

There, with the broad economic vision of Percy A. Rockefeller, George Fisher Baker and John D. Ryan,* trustees of Consolidated Gas waited. Their company is the second largest public utility in the country. Only American Telephone & Telegraph surpasses it. It owns all of the capital stock of the New York Edison Co., one of the two largest electric operating units in the U. S. With its dozen main subsidiaries it supplies the 5,000,000 people of New York City, boroughs of Manhattan, the Bronx and Queens, and a large section of adjoining Westchester County with practically all their gas and electricity.

The Consolidated Gas trustees gravely heard that the Brooklyn company would trade its stock for Consolidated Gas’ stock on an agreed basis. The merger of Brooklyn Edison with Consolidated Gas was virtually in effect.

The joined assets of the two vast corporations at the end of last year were approximately $893,000,000. Now they are greater, for the companies’ business increases by 12% each year. Yet the total assets are somewhat less than the billion dollars that U. S. investors admire. There are eleven billion dollar corporations already in the U. S.† and this merger promised to create the twelfth.

Also operating in Greater New York is the Brooklyn Union Gas Co., which supplies artificial gas (made by heating coal) to the greater part of Brooklyn and a large and growing section of Queens. Its assets are more than $100,000,000 and Secretary

Andrew W. Mellon’s private business associates control it. (The Mellons also own the Koppers Co. which manufactures equipment for making artificial gas.) The Mellons are at least not opposed to vast business consolidations, which violate no laws. They have shared through their various companies in many a vast concretion of interests, and Wall Street is certain that their $100,000,000 Brooklyn Union Gas will go into Consolidated Gas.

In the eddy too are the $35,500,000 Long Island Lighting Co. and the $7,800,000 Brooklyn Borough Gas Co.*

Thus it seemed certain that Consolidated Gas Co. will become the twelfth U. S. billionary, the twelfth reservoir of a billion dollars in corporate assets.

Representatives of the Federal Trade Commission were working in the offices of large public utility holding and service companies at Manhattan, Philadelphia and Chicago last week, seeking data on the growth of capital assets and capital liabilities of holding companies and management groups, their methods of issuing securities, their intercompany relationships and the services furnished to utilities companies by holding, management and service companies. Chairman William E. Humphrey of the Federal Trade Commission last week assured Congress that he would even inquire into the political activities of the companies.† He intimated that his reports would soon appear. But observers of the Federal Trade Commission’s activities skeptically pointed out that its latest map of the U. S. power industry was made in 1925; that for three months a revised map has been in preparation, that not for another three months will it be finished, that then at once it will be obsolete. There are in the U. S. (at latest count) 124 huge light, power and electric railway systems each of which produced more than 100,000,000 kilowatt-hours of electricity last year. They are constantly changing their corporate affiliations. The ten largest are: Buffalo, Niagara & Eastern Power Corporation

System

Commonwealth Edison Company Edison United & Allied Companies Southern California Edison Company Pacific Gas & Electric Company Southeastern Power & Light Company System The Detroit Edison Company The Philadelphia Electric Company System (T) Duke Power Company The West Penn Electric Company

No man can follow all their utility turns.

While Nicholas Frederick Brady’s colleagues serenely created a new billion dollar institution, he serenely basked in the May proximity of an older and a richer one, the Church of Rome. The Bradys have always been observant Catholics and, with the accumulation of wealth, helpful ones.

Anthony Nicholas Brady, the father, boy-immigrant from Lille, France, began the family fortune with a tea store at Albany, N. Y. He was 19 then. He was director of 50 corporations when, aged 70, he died of indigestion while traveling in England with Louis Sherry, the restaurateur.

A business principle which he taught his two sons, James Cox* and Nicholas Frederic, was to search for executive genius. They early supported Walter P. Chrysler in automobiles and Matthew S. Sloan in public utilities. Mr. Chrysler is now chairman of the Chrysler Motors Corp., and Mr. Sloan is President of Brooklyn Edison.

* Mr. Brady and Mr. Ryan are in close association in Anaconda Copper, Brooklyn Edison Consolidated Gas, Emigrant Industrial Savings Bank, Montana Power, recently sold to American Power & Light (TIME, April 16) and National City Bank of N. Y. Percy A. Rockefeller is with them on Anaconda Copper Consolidated Gas, National City Bank.

† They are American Telephone and Telegraph Co.; Atchison, Topeka & Santa Fe R. R.; Chase National Bank; General Motors Corp.; National City Bank; New York Central R. R.; Pennsylvania R. R.; Southern Pacific R. R.-‘ Standard Oil (N. J-); Union Pacific R. R.; U. S. Steel.

* Brooklyn Borough Gas president is Mary E. Dillon, only woman president of an important public utility (TIME, April 5, 1926). Last week, at a gas rate hearing, she complained: .”Unless we can gain additional revenue at present and assurance of future profits, the company cannot hope to survive. The conditions affecting the use of gas in the Coney Island territory are not typical of New York City or State. There is no volume of manufacturing business in our territory and no industrial growth is in prospect.” Brooklyn Borough Gas is controlled by United Light & Power Co. of Chicago, of which Cyrus S. Eaton of Cleveland (TIME, Feb. 6) is chairman. United Light & Power is in close contact with Mellon utilities.

† in Congressmen’s minds was the quaint practice of Samuel Insull of the Commonwealth Edison Co. Mr. Insull gave money, he said, impartially to Democrat and Republican candidates in Illinois.

* Died last November (TIME, Nov. 21) He is not to be confused with James Buchanan (“Diamond Jim) Brady, railroad equipper stock market speculator, hard worker, bon viveur, theatre first-nighter, who died in 1917.