Crumbled Commonwealths

Far-flung is the domain of American Commonwealths Power Corp., great public utility holding company. In the U. S. its operated properties serve 399 communities in 26 States. In Canada its system serves 250,100 people in three Provinces. Its gross revenues have been running at the rate of $26,000,000 per year with $2.800,000 left for the common stock. But last week Commonwealths, with $200,000,000 in assets, went into receivership.

Immediate cause for the receivership . was a $3,000,000 short-term loan maturing Jan. 2. Holders of the note Were Dillon. Read & Co. and U. S. & International Securities Corp., the Dillon, Read investment trust.

Largest holder of voting stock in Commonwealths Power has been American Corp., the company's own investment affiliate. Second has been Chase Harris Forbes Corp., through Public Utility Holding Corp. of America. Third largest has been G. E. Barrett & Co., Inc. through its American Utilities & General Corp. Recently the Chase Harris Forbes and G. E. Barrett representatives resigned from Commonwealths' directorate.

Creator of American Commonwealths and its mainspring was Frank Theodore Hulswit. He was born in Grand Rapids 56 years ago, the son of a local merchant. His great-grandfather was Jan Hulswit (1766-1822), famed Dutch painter. In 1904 Frank Hulswit and Ralph Child formed the investment firm of Child-Hulswit & Co. which was dissolved in 1912. In 1910 Mr. Hulswit organized United Light & Railways Co., the nucleus of United Light & Power Co. In 1926 he was reputed to be worth $12,000,000. That year there was a great break in public utility stocks. United dropped from $140 to $70. Mr. Hulswit appealed in vain to Bonbright & Co. for aid. Then he resigned as United's president.

He still had control of Community Power & Light Co. and used that as the cornerstone for the American Commonwealths structure. As American Commonwealths' cash increased, it invested in other companies. Last year its holdings of United Light & Power were sufficient for Mr. Hulswit to have himself elected to the board of the company whose presidency he had been forced to surrender.

The crumbling of Commonwealths last week may result in changes in the control of United Light & Power. The company has always been independent although Continental Shares, Inc., previously allied with Cyrus Stephen Eaton and Otis & Co., held 42% of its voting stock and the Mellon-Koppers group held about 35%,. It was asserted that American Commonwealths had pledged its 10% in United as security for the Dillon, Read loan. Hearing that Dillon, Read & Co. had already disposed of the stock. Wall Street last week anxiously asked "To whom?"

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