|Introduction||Historical Background||Chronology||Geography||Biography||Technology||Ownership and Financing||General Bibliography|
Financing of American Water Works
||Northeastern Water Company
The Northeastern Water Company is the successor to several earlier utility holding companies.
The National Water Works Company was incorporated in Delaware in 1928 on April 17, 1928 and was organized on September 18, 1928. The company bought 24 water systems over the next three years before apparently running into financial difficulties.
The Delaware Valley Utilities Company was incorporated May 9, 1931 and purchased the National Water Works Company the following month.
North American Water Works Corporation was incorporated October 31, 1926
in Delaware and changed its name to North American Water Works and
Electric Corporation on November 30, 1928 when it was bought by the
Atlantic Public Utilities, Inc. Atlantic Public Utilities was
acquired by Fitkin Securities Corporation that had been founded by Abram
Fitkin. Atlantic Public Utilities and North American Water
Works were forced into receivership on July 31, 1930.
The Northeastern Public Service Company was incorporated on May 6, 1931 in Delaware to acquire 68 properties of the bankrupt Atlantic Public Utilities. This company in turn was owned by Northeastern Utilities Company, which was a subsidiary of Samuel Insull's National Electric Power Company. Another subsidiary of Atlantic Public Utilities, Union Waterworks Company, was sold in a separate proceedings to investors in Kentucky in October, 1932..
The Northeastern Public Service Company went into receivership January 2, 1933 in Federal court in the state of Delaware.
The Northeastern Water and Electric Corporation was incorporated on June 8, 1934 in Delaware to take over the assets of the bankrupt Northeastern Public Service Company.
The Associated Gas and Electric Company was incorporated March 19, 1906 and came under the control of Howard C. Hopson in 1922. It bought the Northeastern Water and Electric Company in 1937. The Northeastern Water Companies, Inc., was organized on June 7, 1937 by the Associated Gas and Electric Corporation to act as a holding company for the Northeastern Water and Electric Company. Northeastern Water Companies owned 37 water companies in 1938, according to the Associated Gas and Electric Corporation annual report of that year. Associated Gas and Electric filed for bankruptcy on January 10, 1940 and the trustees of the company decided the Northeastern Water Companies,.Inc., was superfluous and it was dissolved on December 30, 1941
Delaware Valley Utilities Company and the Union Water Service Company
were merged into the Northeastern Water and Electric Company on November
30, 1943 and the surviving company was renamed Northeastern Water
In 1947, Northeastern Water Company acquired Penn-Jersey Water Service Company and acquired sixty percent of the stock of the American Water Works Company, Incorporated.
The Northeastern Water
Company merged into the American Water Works
Company on August 17, 1962.
1910-1921 Associated Gas and Electric Corporation Annual Reports
1922-1938 Associated Gas and Electric Corporation Annual Reports
Filed at State House," The Morning News (Wilmington, Delaware),
April 18, 1928, Page 12.
Dover, April 17. National Water Works Corporation, Incorporated in Delaware April 17, 1928 by E.E. Craig, A.L. Faughley, and M.S. Cook,
Works Co. is incorporated," The Evening Journal (Wilmington,
Delaware), September 19, 1928, Page 27.
National Water Works Corporation has been chartered under the laws of Delaware. The corporation has already acquired a number of properties in Pennsylvania and Tennessee and other acquisitions in various States are now under negotiation.
The officers of the corporation include I. Edgar Detwiler, president of Detwiler & Co., President; V. Bernard Siems, formerly vice-president of North American Water-Works Company, vice-president;
Company is Acquired by New Utilities Combine," The Paducah
Sun-Democrat, December 1, 1928, Page 1.
National Water Works and Electric Company sold to Atlantic Public Utilities, Inc.
1929 "Corporation Buys 4 Water Companies," Wilkes-Barre Times Leader, January 17, 1929, Page 1.
Reading Man Sold Glass of Water for Princely Sum," The Morning
Call (Allentown, Pennsylvania), September 23, 1929, Page 5.| Part
2 | Part 3
How L. Edgar Detwiler formed the North American Water Works Corporation. Today the National Water Works owns, controls and operates 21 companies serving 42 communities.
Co. Management Changes Ownership," The Morning Call (Allentown,
Pennsylvania), February 6, 1930, Page 25.
Atlantic Public Utilities, Inc. has been acquired by the Fitkin Securities corporation and will be managed by the United States Engineering Corporation of New York City.
3 Utilities Companies Insolvent," The Philadelphia Inquirer,
July 31, 1930, Page 17.
Atlantic Public Utilities, Atlantic Public Service and N.A. Water Works Involved.
1931 Delaware Valley Utilities Company incorporated May 9, 1931 in Delaware.
1931 "Water Concerns
Bought by Unit in Philadelphia," New York Herald Tribune, June 11,
1931, Page 32.
Delaware Valley Utilities to Operate 24 Companies in Five Eastern States.
Philadelphia, June 10.- John H. Ware, Jr., president of the Delaware Valley Utilities Company, recently oreganized, announced that the company had acquired the capital stocks of twenty-four water companies operating in five states. The companies purchased have an appraised value of slightly more than $11,000,000 and their capital issues were bought from the National Water Works Company.
The states in which the companies operate are Pennsylvania, New Jersey, New York, Tennessee and West Virginia, 95 percent of the acquired properties being locaed in Pennsylvania and New Jersey.
The companies acquired are:
Reading Suburban Water Company, Shenandoah Citizen Water and Gas Company, Girard Water Company, which controls the Hammond Water Supply Company, Lehighton Water Company, Maunch Chunk Water Company, Freeland Water Company, Hegins Water Company, Citizens' Water Company of Tower City, Williams Valley Water Company, Citizens' Water Company at Scotdale, and the Greenville Water Company, all in Pennsylvania.
Riverton and Palmyra Water Company, Washington Water Company, Laurel Springs Water Works Company, Ideal Beach Water Works Company Frenchtown Water Company,; Jamesburg Water Company, Tuckerton Water Company, Barnegat Water Company, and Junction Water Company, all in New Jersey.
Barnegat Water Company, and Junction Water Company, all in New Jersey.
Bolivar Water Company in New York.
Ingleside Water Company, in Tennessee.
Pure Water Company, and the Mountain States Water Company, in West Virginia.
Millions to Assets of Insull Firm in East," Chicago Tribune,
July 19, 1931, Page 28.
Nat. Elec. Power Acquires Utility Properties.
The National Electric Power Company has acquired full control of the electric, water, and natural gas properties formerly owned by Atlantic Public Utilities, Inc., from the reorganization committee in accordance of the reorganization plan of March 20.
Two new holding companies have been formed in conjunction with the plan. The Northeastern Public Service Company, owns more than 90 percent of the capital stocks of the 68 companies included in the reorganization plan. The other, the Northeastern Utilities Company, will fully control the Northeastern Public Service company, and will be a subsidiary of the National Electric Power Company.
Gets Plan for Insull Utility," New York Times, April 20,
1934, Page 39.
A plan of reorganization for the Northeastern Public Service Company, one of the last properties acquired by the Insull interests before the crash of 1932, was submitted yesterday to the Court of Chancery in Wilmington, Del.
The new Company will own all assets of the present company, consisting of small utility companies furnishing electricity to fifty-three community and water to seventy-eight communities in States along the Atlantic Seaboard.
1938 In the Matter of
Northeastern Water and Electric Corporation, 3 S.E.C. 823, Promulgated
August 31, 1938. | Also here
Page 824: It also has 39 subsidiary companies that are water companies. These are located in the States of Arkansas, Connecticut, Illinois, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, Ohio, Pennsylvania, and West Virginia.
Page 825: The immediate parent of the applicant is Northeastern Water Companies, Inc. This company is in turn controlled by Associated Gas and Electric Company. The transactions by which the Associated Gas and Electric caused Northeastern Water Companies, Inc., to be organized and by which it obtained control of the applicant will be briefly summarized.
a. Northeastern Water Companies, Inc., was organized on June 7, 1937, by employees of a firm of lawyers who represent the Associated Gas and Electric Corporation. It was a straw corporation, its capital originally consisting of $1,000 which was advanced by the law firm.
b. Using this straw corporation, the Associated interests caused funds and securities to be transferred among a number of companies under common control with Associated. The result of these complicated financial transactions was that the straw corporation (Northeastern Water Companies, Inc.) was put in a position to acquire 88.22 percent of the common stock of the applicant from its then owner (alleged to be a nonaffiliated Canadian corporation). The consideration to be paid was $3,200,000.
c. The straw corporation (Northeastern Water Companies, Inc.) paid this consideration to the extent of $1,000,000 in securities and $100,000 in cash, and by means of a note for $2,100,000. To secure this note it pledged the common stock of the applicant.
d. The straw corporation (Northeastern Water Companies, Inc.) obtained the $1,000,000 in securities and the $100,000 in cash from New England Gas & Electric Association in return for demand notes. New England Gas & Electric Association in turn had obtained the $1,000,000 in securities from Associated Utilities Corporation, a subsidiary of Associated Gas and Electric Corporation, in return for its own demand note which it subsequently liquidated by turning over to Associated Utilities Corporation the demand note of Northeastern Water Companies, Inc., which it had received in exchange for the $1,000,000 in securities. The apparent willingness of New England Gas & Electric Association to make the $100,000 cash advance to a corporate shell is perhaps explained by the fact that this company and Associated Gas and Electric Company were at all times mentioned under common control. Both were controlled by certain trustees under a declaration of trust dated June 1, 1924.
e. On December 21, 1937, Associated Gas and Electric Corporation acquired from the employees of its lawyers the stock of the straw corporation (Northeastern Water Companies, Inc.) by repaying to them the $1,000 which they had advanced upon the organization of that company.
f. Northeastern Water Companies, Inc., has recently filed a voluntary petition for reorganization under Section 77B of the Bankruptcy Act. This was apparently made necessary by its inability to meet the note for $2,100,000 given to the seller of the applicant's stock.
g. The net result of these transactions was that the Associated Gas and Electric System acquired the applicant's common stock. The consideration for this stock has been only partly paid; and the purchaser of the stock (Northeastern Water Companies, Inc.) has now instituted Section 77B proceedings. Even the part of the consideration that was paid in cash to the seller of the stock was obtained in the form of a loan which in substance came from the New England Gas & Electric Association, a company under common control with Associated Gas and Electric Company.
Gas to Give Up Utility Control," The News Journal
(Wilmington, Delaware), July 1, 1941, Page 28.
Associated Gas & Electric Corp. trustees announced today a plan to sell their controlling 155,747 shares of common stock in Northeastern Water and Electric Corp. to President John H. Ware of Penn-Jersey Water Co. for $3,800,000.
Associated Gas & Electric's holdings are indirect, through Northeastern Water Companies, Inc., which would be dissolved.
1941-1944 Associated Gas and Electric Corporation, Annual Report of Trustees
1942 In the Matter of Denis J. Driscoll and Willard L. Thrope, as Trustees of Associated Gas and Electric Corporation, Respondents; Northeastern Water and Electric Corporation, and Dennis J. Driscoll and Willard L. Thorpe, as Trustees of Associated Gas and Electric Corporation, Appellvants, Declarants, 11 S.E.C. 1, promulgated March 3, 1942. | Also here |
1942 In the Matter of Denis J. Driscoll and Willard L. Thrope, as Trustees of Associated Gas and Electric Corporation, Respondents and Northeastern Water and Electric Corporation, 12 S.E.C. 401, promulgated November 10, 1942. | Also here |
1943 The Delaware Valley Utilities Company and the Union Water Service Company were merged into the Northeastern Water and Electric Company on November 30, 1943 and the surviving company was renamed Northeastern Water Company.
1943 Annual Report of the Northeastern Water Company for the year ended December 31, 1943.
1944 Annual Report of the Northeastern Water Company for the year ended December 31, 1944.
1945 "Through the Wringer with A.G. & E. - Mr. Hopson's Associated System - Its Crazy Pre-SEC Rise, Its Crashing Collapse in the Welter of Paper and Water, Its Healthy Resurgence," Fortune :165-168, 202-221 (December, 1945)
1947 In the Matter of
Northeastern Water Company (Formerly Northeastern Water and Electric
Corporation), 25 S.E.C. 355, promulgated February 28, 1947. | Also here
Declared to have ceased to be a holding company.
The record indicates, however, that Northeastern owns 32,100 shares of common stock of American Water Works and Electric Company, a registered holding company, which amount represents less than 1˝ percent of the total shares of common stock of such company.
1947 "J.H. Ware Acquires Control of American Water Works," The Daily Republican (Monongahela, Pennsylvania), October 10, 1947, Page 1.
1961 "Northeastern Water Applies for Order," SEC News Digest, May 31, 1961, Page 4. Owns 60.48% of the American Water Works Company.
1970 "Reorganization of Associated Electric System under Bankruptcy and Public Utility Holding Company Acts: 1940-1946," by Edward W. Morehouse, Land Economics 46(4):357-382 (November, 1970)
2018 "Howard Hopson’s billion dollar fraud: The rise and fall of Associated Gas & Electric Company, 1921–1940," by William J. Hausman, Business History 60(3):381-398 (2018)
Cornell University holds many records of the Northeastern Water and Electric Corporation in their Associated Gas and Electric collection. | finding aid and company history |
© 2019 Morris A. Pierce