of an indebtedness of the St. Lawrence River Power Co. to it in the amount of $1,941,655, and does hereby release and discharge [76] the St. Lawrence River Power Co. to that extent.

"Witness the common and corporate seal of the St. Lawrence Securities Co., duly attested, this 28th day of August 1913.

[SEAL]

"ST. LAWRENCE SECURITIES CO., "By G. I. GIBBONS,

"2nd Vice-Pres."

The acquisition of shares commented upon above gave St. Lawrence Securities Co. preferred and common stock totaling 30,000 and 35,000 shares, respectively. The portion of the consideration given for this stock represented by St. Lawrence Securities Co. bonds as above noted, however, was reduced $12,428.74, which sum represented the discount at which the bonds were subsequently retired, so that the purchase prices of the stocks, after deducting this amount, totaled $3,482,371.62, represented by credits as follows:

Capital stock of St. Lawrence Securities Co.......

Bonds of St. Lawrence Securities Co, $1,449,660.80 principal

amount less discount of $12,428.74_.

Northern Aluminum Co., Ltd., open account_
The St. Lawrence River Power Co., open account_

The Pittsburgh Reduction Co., open account, expenses and in-
come (net) -

Total_-_

$99, 000. 00 1, 437, 232. 06 340. 24

1, 941, 655. 00

4, 144. 32

3, 482, 371. 62

Cash to the total amount of $1,437,232.06 was advanced by Aluminum Co. of America for retirement of the $1,449,660.80 principal amount of bonds set forth in the foregoing tabulation and the advances were credited to open account with the Aluminum Co. of America. (See p. 42.)

On January 30, 1930, the stock of the St. Lawrence River Power Co., together with that of Pine Grove Realty Co., was transferred to Massena Securities Corporation in conformance with an agreement entered into with that company on September 30, 1929, and modified by a supplemental agreement entered into November 14, 1929 (both of which are shown as appendix 7).

[77] January 30, 1930, was the date under which the records of the Securities Co. showed closing entries incidental to the transfer of ownership of St. Lawrence Securities Co. to Niagara Hudson Power Corporation. Massena Securities Corporation was the new company created for the purpose of holding the properties retained by Aluminum Co. of America, as specified in the agreement of August 21, 1929, between Aluminum Co. of America and Niagara Hudson Power Corporation.

The supplementary agreement of November 14, 1929, referred to above, specified that as consideration for the stocks of the St. Lawrence River Power Co. and Pine Grove Realty Co., recorded on St. Lawrence Securities Co.'s books at values of $3,482,371.62 and $36,380.98, respectively, Massena Securities Corporation was to pay $129,126.27 in cash and was to assume the liabilities of St. Lawrence Securities Co. to the St. Lawrence River Power Co. amounting to $5,079,626.33. The original agreement of September 30, 1929, specified $5,413,756.06 as the liability to be assumed, but the amount of liability was reduced to the figure set forth in the supplementary agreement by a cash payment on account of $334,126.73. The copies of agreements furnished made no reference to open-account obligation of Pine Grove Realty Co. amounting to $1,690,000, but St. Lawrence Securities Co.'s books recorded the transaction as covering the sale of the St. Lawrence River Power Co. stock at a value of $3,482,371.62 and Pine Grove Realty Co. stock at a value of $36,380.98, together with accounts receivable from Pine Grove Realty Co. amounting to $1,690,000, in return for $129,126.27 in cash and the assumption by Massena Securities Corporation of accounts payable to the St. Lawrence River Power Co. amounting to $5,079,626.33. The records show the cash amount of $129,126.27 as paid to St. Lawrence Securities Co. by Aluminum Co. of America on January 29, 1930.

SECTION 10. PINE GROVE REALTY CO

Purpose of formation.-Pine Grove Realty Co. was a separate corporation organized by parties affiliated with the early developments at Massena [78] for the purpose, primarily, of acquiring lands in the vicinity of the plant at Massena and erecting thereon dwellings to meet the needs of the plant's employees. Total

capital stock issued amounted to 500 shares of $100 par value each and the company had no bonded debt.

Acquisition and disposal of stock.-The following statement shows details covering the acquisition and disposal by St. Lawrence Securities Co. of capital stock of Pine Grove Realty Co.:

The acquisition by St. Lawrence Securities Co. recorded under date of March 12, 1907, of the 500 outstanding shares of Pine Grove Realty Co. was in conformance with the provisions of an agreement entered into on March 8, 1907, by the Securities Co. and its subsidiary, the St. Lawrence Power Co., shown as appendix 8, within commission's exhibit no. 5335. The agreement set forth that these shares, together with stock and bonds of the Massena Terminal Railroad Co., had been deposited with a trustee under a certain mortgage and deed of trust dated January 19, 1903, from the St. Lawrence River Power Co. to the trustee. The agreement also specified that for these shares of the realty company and the stock and bonds of the railroad company, St. Lawrence Securities Co. was to pay $1,507.71 in cash as part consideration and also was to deliver as the balance of [79] the consideration its promissory note for $169,000 payable on demand and secured by the deposit and pledge of 2,000 shares of the capital stock of the United States Aluminum Co. Entries in the Securities Co.'s books show the payment of $1,507.71, the same having been advanced by Aluminum Co. of America, and the issuance of notes payable to the amount of $169,000 for the stocks and bonds as specified in the contract; also the allocation of $36,380.98 of the total to the Pine Grove Realty Co. stock and the balance to the Massena Terminal Railroad Co. stock and bonds.

The Realty Co.'s stock remained recorded on the Securities Co.'s books at the same value until January 30, 1930, when it was sold, together with the outstanding stock of the St. Lawrence River Power Co., to Massena Securities Corporation. The entries in St. Lawrence Securities Co.'s books showed that as consideration for the stocks of the two companies, with ledger value totaling $3,518,752.60, and accounts receivable from Pine Grove Realty Co. to the amount of $1,690,000, Massena Securities Corporation paid $129,126.27 in cash and assumed accounts payable to the St. Lawrence River Power Co. to the amount of $5,079,626.33. This transaction and the agreements in relation thereto, shown as appendix 7, within commission's exhibit no. 5335, are further discussed under the preceding section.

COMPANIES ACQUIRED AND OTHERWISE DISPOSED OF

SECTION 11. NORTHERN POWER CO.

Organization and activities.-Northern Power Co. was incorporated under the laws of the State of New York, May 16, 1905. The objects of the company's creation, as set forth in the certificate of incorporation, were for manufacturing and using electricity for producing light, heat, and power and in lighting streets, avenues, public parks and places, and public and private buildings in numerous cities, towns, and villages located in Franklin, St. Lawrence, Jefferson, Oneida, Oswego, and Onondaga Counties, N.Y.

[80] The certificate of incorporation authorized the issuance of $100,000 of capital stock divided into shares of $100 par value each, but later the authorized capital was increased to 5,000 shares of $500,000 par value, of which 3,160 shares were issued.

Prior to its consolidation with the old St. Lawrence Transmission Co. in 1916, to form the new St. Lawrence Transmission Co., the Northern Power Co. owned transmission lines extending from Hannawa Falls to Ogdensburg, Gouverneur,

Higley Falls, and Potsdam. It owned no plant for the generation of electricity, but purchased the entire output of the Hannawa Falls Water Power Co., at Hannawa Falls, and of the Snell Power Co., at Higley Falls, transmitting the current over its lines for delivery to customers in Ogdensburg, Canton, and Potsdam.

Control. The incorporators of the Northern Power Co., who also were named in the certificate of incorporation as the directors for the first year, were: W. B. Cogswell, E. A. Merritt, Jr., O. H. Tappan, and E. J. Page, who owned and controlled the Hannawa Falls Water Power Co. prior to acquisition thereof by Aluminum Co. of America interests. What the stock interest in the Northern Power Co. of each of the incorporators may have been was not learned, but as evidenced by the agreement of May 22, 1913, a copy of which is filed as appendix 4, within Commission's exhibit 5335, Cogswell, at least, agreed to transfer to the Hannawa Falls Water Power Co. 1,380 shares of the Northern Power Co., subject to approval of the State public service commission. The secretary of the Hannawa Falls Co. reported under date of December 14, 1915, that that company had acquired 1,380 of the shares of Northern Power Co. pursuant to an order of the Commission dated July 28, 1914, authorizing the issuance by the Hannawa Falls Co. of $138,000 of its bonds for the shares, and that in 1915 the Hannawa Falls Co. sold 380 shares of Northern Power Co. to Arthur V. Davis. St. Lawrence Securities Co.'s records show it as having acquired, in February 1913, 1,580 shares, or 50 percent of the total outstanding, and as having disposed of the same to Aluminum Co. of America in December 1914. The secretary of [81] the Hannawa Falls Water Power Co. reported, under date of December 11, 1916, that pursuant to an order of the State public service commission dated December 30, 1915, the St. Lawrence River Power Co. had acquired all of the 3,160 outstanding shares of Northern Power Co., 1,000 of the shares having been acquired from the Hannawa Falls Water Power Co. and 2,160 of the shares from Arthur V. Davis. It is assumed that insofar as concerns at least 1,580 of the shares held by Davis, he held the shares as representative of Aluminum Co. of America. The 200 shares held by him over and above the total number of shares previously mentioned in this discussion represented remaining outstanding shares which formerly were held by the persons who executed with Davis the contracts of May 20, 1913, and March 10, 1914, discussed in section 7 of this chapter.

From the facts above set forth, it would appear that t half interest in the Northern Power Co. acquired by Aluminum Co. of America interests, under date of February 13, 1913, and recorded on the books of St. Lawrence Securities Co., was increased to a majority interest when the Hannawa Falls Water Power Co. acquired 1,380 additional shares following the order of the State public service commission, dated July 28, 1914, authorizing the acquisition; and that all of the outstanding shares were acquired by the St. Lawrence River Power Co., a subsidiary of St. Lawrence Securities Co., following the order issued by the public service commission under date of December 30, 1915, permitting the acquisition. As set forth under section 8 of this chapter, Northern Power Co. was consolidated with the old St. Lawrence Transmission Co. in 1916 to form the new St. Lawrence Transmission Co.

Advantages of ownership.—The reasons for desiring to add the Northern Power Co., and also the Hannawa Falls Water Power Co., to the electric properties of the Aluminum Co. of America, and to place the ownership of these two companies and the St. Lawrence Transmission Co. (already owned by St. Lawrence Securities Co.) in the hands of the St. Lawrence River Power [82] Co., were set forth in a petition filed by the last-named company with New York State authorities in 1914, seeking approval of the desired transfers. The petition offered as reasons the following:

* * * The Hannawa Falls Water Power Co. has never been a prosperous company and from 1902 to the middle of 1913 had been in the hands of a receiver. * * *

The Northern Power Co. is * * * engaged in the business of conveying and selling electrical power, buying its power from the Hannawa Falls Water Power Co. and from the Snell Power Co., a small company located at Higley Falls. The entire supply of these two latter companies is sold to the Northern Power Co. and is transmitted and sold by the latter company to customers at Ogdensburg, Canton, and Potsdam. It is not possible for the Northern Power Co. to acquire for distribution in this territory any more power from the two companies named. The flow of the Raquette River, on which are situated both Higley Falls and Hannawa Falls, is very slight through the summer, and there is now throughout the entire summer months a constant diminution or cessation of the power derived from these points.

The St. Lawrence Transmission Co. is also engaged in the business of transmitting electrical power and buys all its power from the St. Lawrence River Power Co. * * *

* * * it is planned to connect the lines of the Northern Power Co. with the transmission lines of the St. Lawrence Transmission Co. which in turn connect with the generating plant of your petitioner at Massena. It is also proposed to connect the lines of the St. Lawrence Transmission Co. north from Massena at the international boundary line with the Cedar Rapids Transmission Co., Ltd., a Canadian company.

This plan, if carried out, will greatly increase the amount of power available for use of consumers of power in the territory served by the Northern Power Co. As the entire output of the Northern Power Co. is now sold, the increased supply which will be available through the proposed connection with the St. Lawrence Transmission Co. should be of great benefit to prospective customers in that part of New York State and therefore of real advantage to the entire community so served.

Furthermore, the service rendered by the Northern Power Co. to its present customers will be more efficient and constant for the reason that the electrical power produced by the St. Lawrence River Power Co. and sold by it in part to the St. Lawrence Transmission Co. is derived from the St. Lawrence River, the flow of which is practically uniform throughout the year, whereas in summer the minimum flow of the Raquette River, which furnishes water power to the Hannawa [83] Falls Water Power Co. and the Snell Power Co., is less than 1% percent of the maximum flow of the Raquette.

Your petitioner further avers that all the transmission lines of the Northern Power Co. and the St. Lawrence Transmission Co. are located within the county of St. Lawrence, in the State of New York. * * *

Acquisition and disposal of stock. The records of St. Lawrence Securities Co. show the acquisition and disposal by that company of capital stock of Northern Power Co. as follows:

Under date of February 13, 1913, the records show the acquisition of 1,580 shares at the par value of $158,000, which amount was credited to the open accoubt with Aluminum Co. of America. The vendor of the shares was not named, but the journal entry stated that the Aluminum Co. of America had advanced the purchase price.

The 1,580 shares acquired, which constituted 50 percent of the shares outstanding, were shown as disposed of at par by the Securities Co. to Aluminum Co. of America under date of December 31, 1914, and the open account with that company was charged the sales price.

SEC. 10. ST. LAWRENCE TRANSMISSION CO. (OLD)

Organization and activities.-The first St. Lawrence Transmission Co. was organized under the laws of the State of New York, November 16, 1904.

[84] The objects of the company, as set forth in the certificates of incorporation, were:

* * * to generate, manufacture, buy, sell, transmit, use, supply, and deal in electricity for producing light, heat, or power; to carry on the business of lighting by electricity or using it for heat or power in the counties, cities, towns, and villages within the State of New York, and the streets, avenues, public parks, and places thereof; and public and private buildings therein; to make, purchase, sell, lease, acquire, and dispose of all machines, instruments, apparatus, and other equipments for such business, and to lay, erect, and construct suitable wires or other conductors, with the necessary structures, poles, pipes, and other fixtures and machinery for conducting, transmitting, and distributing electricity, and to

acquire, lease, own, and dispose of real estate, rights of way, easements, and any other interests in real estate.

Also to purchase, acquire, hold, and dispose of the stocks, bonds, and other evidences of indebtedness of any corporation, domestic, or foreign, and to issue in exchange therefor its stock, bonds, or obligations, of any other domestic corporation.

The certificate also stated:

The names of the towns, village, cities, and counties in which the operations of the corporation are to be carried on are the towns of Massena, Louisville, Norfolk, Waddington, Lisbon, Brasher, Stockholm, Madrid, Potsdam, Canton, Oswegatchie, DeKalb, DePeyster, Hermon, Morristown, Macomb, Gouverneur, Edwards, Fowler, Hammond, Rossie, Fine, Clifton, and Pitcairn, the villages of Massena, Waddington, Madrid, Norwood, Potsdam, Canton, Rensselaer Falls, Heuvelton, Richville, Hermon, Morristown, Gouverneur, Edwards, and Talcville, and the city of Ogdensburg, all in the county of St. Lawrence, and the towns of Antwerp, Theresa, Alexandria, Philadelphia, Leroy, Parmelia, and Watertown, the villages of Antwerp, Theresa, Redwood, Alexandria Bay, and Philadelphia, and the city of Watertown, all in the county of Jefferson.

The certificate of incorporation authorized the issuance of $25,000 of capital stock, divided into 250 shares of $100 par value each, but up to the time the company was consolidated with Northern Power Co. to form a new St. Lawrence Transmission Co. in 1916, only 100 shares of $10,000 par value had been issued. At the time of its consolidation with Northern Power Co., St. Lawrence Transmission Co. operated a transmission line extending from the St. Lawrence River Power Co.'s [85] generating plant at Massena, N.Y., through Raymondville to Norfolk, where it delivered power to its single customer. It also was extending its line from Massena north to the international boundary for connection with the transmission line of the Cedar Rapids Transmission Co., Ltd., a Canadian corporation. The company had no generating plant, but purchased its power from the plant of the St. Lawrence River Power Co.

Control. The incorporators of St. Lawrence Transmission Co., who also were named in the certificate of incorporation as the first directors, consisted of Thomas A. Gillespie, of West Orange, N.J.; Mark T. Cox, of East Orange, N.J., and William J. Wilson, of 121 West One Hundred and T1 rty-sixth Street, New York City. These men also acted with others as the ine rporators of the St. Lawrence River Power Co. in 1902. The extent of their interest, then or later, in either of these companies was not learned, but the records of St. Lawrence Securities Co. indicate that in 1907 at least the St. Lawrence River Power Co. owned all of the 100 outstanding shares of stock of St. Lawrence Transmission Co. Direct control of the company was acquired by St. Lawrence Securities Co. from its subsidiary, the St. Lawrence River Power Co., in March 1907, and was reacquired by the St. Lawrence River Power Co. in December 1915.

The reasons expressed by the St. Lawrence River Power Co. for desiring the acquisition of this company are set forth in section 11 of this chapter, and the consolidation of this company with Northern Power Co. to form a new company, also named St. Lawrence Transmission Co., is described under section 8 of this chapter.

Acquisition and disposal of stock. The books of St. Lawrence Securities Co. show the acquisition and disposal by that company of the outstanding capital stock of the original St. Lawrence Transmission Co. as follows: [86]

As indicated in the foregoing statement, St. Lawrence Securities Co. acquired the 100 shares of outstanding stock of St. Lawrence Transmission Co. from its