Documentary History of American Water-works

Introduction Historical Background Chronology Geography Biography Technology Ownership and Financing General Bibliography

Biography Charles H. Payson

Charles H. Payson

Charles Henry Payson was born in Portland, Maine on April 12, 1853. In 1879 he joined the firm of H.M. Payson & Co., which had been formed by his uncle Henry Martyn Payson in 1854. The Payson firm had become active in the Portland Water Company, and Charles expanded that interest into selling bonds for numerous other water companies, taking ownership of some of them.  He was involved in the founding of the American Water Works and Guarantee Company (Limited) in 1886 and the American Water Supply Company in 1888. 

Charles H. Payson, from H.M. Payson & Co. : partnership for 100 years 1854-1954. by H.M. Payson & Co.

Payson died in Portland on April 27, 1933.

1886 "Notice of Dissolution and Co-Partnership Notice," Portland Daily Press, January 18, 1886, Page 4.
H. M. Payson & Co. dissolved and reformed on January 1, 1886.

1887 Engineering News 19:525 (June 23, 1887)
Bath. The water works have been sold to H. M. Payson & Co. bankers, of Portland for $250,000.  The works will be improved and extended.

1888 Waterworks Bond Offering circular issued m London by Charles H. Payson

1888 "American Municipal and Waterworks Bonds," The Statist (London, England) 21(533):iii (May 12, 1888)
The Municipal Investment Company of Chicago

1888 "The Water-Works Sale," The Winfield Daily Courier, June 28, 1888, Page 4.
The Winfield Water Company last evening completed the sale of its splendid water-works plant to H.M. Payson & Co., Bankers of Portland, Me.

1888 "Sale of the Salina Water Works," The Saline County Journal, October 18, 1888, Page 3.
The Salina water-works have been sold to C. H. Payson & Co., of Portland, Me.

1889 "Notice," Portland Daily Press, January 9, 1889, Page 3.
Mr. Herbert Payson has an interest in our from from this date.  H. M. Payson & Co. January 1, 1889.

1889 $150,000, Colorado Water Supply Company, seven per cent, first mortgage, sinking fund bonds, payable in gold coin.: $150,000, Colorado Water Supply Company, seven per cent, first mortgage, sinking fund bonds, payable in gold coin.  January 1, 1889

1900 "Medina (N.Y.) Water Works Co.", United States Investor, 11(40):1266 (October 6, 1900)
Bought about two years ago for the bondholders by H.M. Payson  Co.of Portland, Me.  Planned by J. Nelson Tubbs.  Now talking of piping 10 miles to Lake Ontario.

1901 Letter referring to purchase of controlling interest in Des Moines Water Company by Charles H. Payson.  June 11, 1901.

1902 "Foreclosure Sale of Water Works," Chicago Tribune, August 21, 1902, Page 5.
Judge Kohlsaat yesterday was asked to approve the sale of the Kankakee water works, which were disposed of a few days ago to Herbert Payson, of Portland, Me., for $206,000.

1933 Charles H. Payson (1853-1933) grave

1937 The National Cyclopaedia of American Biography, Volume 26
Page 163:  PAYSON, Charles Henry, banker, was born in Portland, Maine, Apr. 12, 1853, son of Charles and Ann Maria (Robinson) Payson and a descendant of Edward Payson, a native of Nazing, Essex, England, who came to Massachusetts in 1635, the line descending from him and his wife Mary Eliot through Rev. Samuel and Mary (Phillips) Payson; Rev. Phillips and Kezia (Bullen) Payson; Rev. Seth and Grata (Payson) Payson, and Rev. Edward and Louisa (Shipman) Payson, the grandparents of Charles H. Payson. His grandfather (q.v.) was one of the most eminent Congregationalist clergymen of his generation.
Following his graduation at the Portland high school in 1870 Charles H. Payson entered the employ of his uncle Henry Martyn Payson, who in 1854 had founded a brokerage and investment business in Portland under the name of H. M. Payson & Co.  When his uncle withdrew from the firm in 1886 Charles H. Payson succeeded him as president, retaining this position until his retirement in 1929.
Early in his business career he became interested in private water works companies and soon was nationally recognized as an expert in the development, management and financing of such enterprises.  At his suggestion the American Water Works & Guarantee Co. was organized in 1888 for the purpose of building, buying and operating water companies, and he was a director of this company until he resigned in 1908, following the decision of the company to go into irrigation projects.
A public-spirited citizen, he was prominently associated with social, welfare, educational and religious organizations. He was conspicuous for his widespread generosity and for his deep sense of personal responsibility for the success of the various causes in which his interest was enlisted. One of his major interests was the Maine general hospital in Portland. Elected an assistant incorporator in 1874, he afterward became a director and during the latter years of his life devoted much of his time to the raising of funds for the institution.  In religion he was a Congregationalist.  He was a lover of outdoor life and recreation and was widely known as a chess expert. His integrity, friendliness and Christian character commanded general respect and affection.  Bowdoin college awarded him an honorary A.M. degree in 1914, "in recognition of his character, eminent citizenship and beneficence." He was married Dec. l, 1886. to Margaret, daughter of Eliphaet Haskell Merrill, of Portland, and they had three children: Margaret, Phillips Merrill and Elinor Payson, wife of Douglas Rulison Coleman.  He died in Portland, Maine, Apr. 27, 1933.

1954 H.M. Payson & Co. : partnership for 100 years 1854-1954. by H.M. Payson & Co.
Pages 18-19:  For many years Charles H., George S. and Herbert, as partners in the firm of H. M. Payson & Co., were active as the financial agents of all the American Water Works and Guarantee Company's properties.
With the organization, in 1888, of the American Water Supply Co., Charles H. and his partners became familiar with the operational end of water utilities, as well, and assumed a threefold responsibility: to distribute and deal in securities for the benefit of the public, to help finance and operate business enterprise, and to develop opportunities for the benefit of both.
As the owner of the American Water Supply Co., H. M. Payson & Co. purchased outright the securities of water companies all the way from New Hampshire to Kansas, and operated them out of the Portland office as a successful business venture.  Eventually the American Water Supply Co. was liquidated. However, H. M. Payson & Co., has continued its interest in Water Companies through the Consumers Water Company which was organized in 1926 to own and operate water works properties. Consumers Water Company now manages properties supplying water to Biddeford, Maine; Sharon, Pennsylvania; Kankakee, Illinois; Springfield, Missouri; and other towns and cities.

2004 H.M. Payson & Co : a foundation of trust for 150 years, by John H Walker and Peter E Robbins
Page 20:  Through his experience with the Portland Water Company, Charles saw the opportunity to finance, develop, acquire and operate other water utilities that needed capital and plant improvements. By the time he had left on his successful foray to London, Charles had started, with several partners, the American Water Works and Guarantee Company created to build and develop water properties, and the American Water Supply Company which owned and operated water companies from New Hampshire to Colorado - neither of which should be confused with today's American Water Works.
Through its very active underwriting of utility bonds, H.M. Payson & Co. provided the financing these two companies needed to buy and improve water properties. By the early 1900s, the Company had underwriting relationships with over 100 companies. It helped to finance other water companies from Maine to California - and had by then become widely known as "The Water Bond House."
Pages 21-22:  In 1926, the partners of H.M. Payson represented by Herbert Payson, Charles's younger brother, and Harold C. Payson, HM's grandson, came together with five other partners, each bringing their respective expertise in the water business, to form the Consumer's Water Company. The Company had seven dollars in assets, representing the one-dollar contribution from each of the partners on the day of incorporation.
This Company provided returns to its shareholders that would be the envy of any venture capital or buyout firm today.
In less than six years, this new water utility holding company had 10 subsidiaries in seven states. Consumers total assets were over $22 million and common shareholder equity was over $4.5 million - or, again in constant dollars they created over $54 million in shareholder value. True, some of the value came from the utilities already owned by several of the partners that were sold into the new company, but the preponderance of the value came from making and financing acquisitions from third parties at favorable terms. (The whole story of Consumers Water Company is engagingly recounted in John Parker's recent book, From Maine to the Maine Line).

H.M. Payson & Co. - Company Profile, Information, Business Description, History, Background Information
Payson first became involved in water bonds when the Portland Water Company was formed in 1866, the same year that a great fire destroyed more than 200 acres in the heart of Portland, including Payson's own offices. It was a major blow to the local economy, given that an estimated $10 million in property was destroyed and only a third was insured. Payson helped to buoy the city's confidence by immediately making a public declaration that he would rebuild his office on the old site and vowed to be back in business there within six months. In many respects, a reliable water supply available to combat fires was of even greater importance during this period than healthy drinking water. New York City, for example, was in great need of unpolluted water, but it was only due to the threat of large-scale fires that the leading American city saw fit to build a modern water works.
In Portland the idea to tap into nearby Sebago Lake was first suggested in 1854, due to a drought that led to a short supply of water, but it was not until February 1866 that the Portland Water Company was incorporated. The fire that devastated the city on July 4 helped to spur the actual launch of the company. Water from Sebago finally began serving Portland in November 1869. Unfortunately, the company was poorly funded and managed. The main had not been properly laid, significantly hampering the flow of water. After the company twice succumbed to bankruptcy, Payson in the early 1870s was induced to join the board and help place the company on a solid financial footing. He was instrumental in securing the funds necessary to improve the infrastructure and turn Portland Water into a profitable business. It also marked Payson's entry into the water business, which became a main interest of the company for several decades.
As a result of his conservative approach, Paysons' clients were not wiped out like so many investors when the panic of 1873 hit the country, leading to a harsh five-year depression. During this time, in 1874, Payson took on his first partner, George F. Thurston, whom he had groomed since Thurston had graduated from high school and went to work for him as a clerk. A third partner joined the firm in 1879: Payson's nephew, Charles H. Payson, who like Thurston had no more than a high school education and worked his way up, also starting out as his uncle's clerk. Charles Payson's tenure would last more than 50 years and his influence on the firm's growth, both nationally and internationally, was so pronounced that he was considered H.M. Payson & Co.'s second founder.
Seven years after becoming a partner he became president when Payson chose to retire. Under Charles Payson's leadership the firm became even more committed to the water business. In 1888 he traveled to London to sell $1 million worth of bonds in the Portland Water Company to help shore up the utility's finances. Moreover, he represented another $1 million in water for nine other water companies, including ventures in Elmira, New York; East Greenwich, Connecticut; Kokomo, Indiana; Sheboygan, Wisconsin; Wichita, Kansas; Fort Smith, Arkansas; Huntington, West Virginia; Meridian, Mississippi; and Merrill, Wisconsin. On that trip he also sold securities for the Marion (Indiana) Gaslight Company. In addition to selling bonds, Charles Payson became involved in running several water companies that he helped to found or acquired. The firm also underwrote any number of utility bonds during the final decades of the 1800s. The firm's interests spread from coast to coast, touching more than 100 utilities and leading Payson to become known as "The Water Bond House."
Charles Payson and several outside partners in 1886 created the American Water Works and Guarantee Company, which built and developed water companies across the country. Soon joining him would be two Payson partners: George S. Payson, the founder's son, who became a partner in 1883 and Herbert Payson, who became a partner in 1889. The three men acted as American Water Work's financial agents. When the firm formed American Water Supply Co. in 1888, the Payson partners added operational responsibilities as well. Payson now acquired control of water companies as far away as Kansas and ran them out of the Portland office. Even after American Water Supply was liquidated, the investment firm remained involved in the water business. In 1926 two Payson partners--Herbert Payson and Harold C. Payson, who became partner in 1919--and five outside partners formed a utility holding company called Consumer's Water Company, which not only housed some of the partners' water assets but also acquired companies, so that by the early 1930s the venture controlled ten subsidiaries in seven states. Payson maintained a connection to the company until 1999 when Philadelphia Suburban Water Company acquired it. Also of note, was Payson's acquisition of Lewiston Gas Light Co. in 1899. The firm developed the utility, which became a highly successful New England company, now part of Northern Utilities Inc.

2020 Morris A. Pierce