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Trt'E SW, ffiUttSDAY, ufcCSMflBft' 28, isflt, ' '' &.
I TO THE HOLDERS OF BOSTON UNITED GAS BONDS.UNDERWRITERSOFNEW ENGLAND GAS & COKE COMPANY BONDS AND STOCK, BOSTON CON SUMERS OF GAS, THE BOARD OF GAS . AND ELECTRIC LIGHT COMMISSION J ERS AND THE INCOMING GENERAL ' . COURT OF MASSACHUSETTS: 'l III , us tho possessor of full knowledge of tho " .U past bud present history of tbo various gas IS companies now existing for tbo purposo of supplying gas light to tho citizens of Bos- ton, I propose to lay beforo you all tbo facts n about one of tbo most startling Impositions oVcr attempted. In proclaiming the New d England Gas & Coko schemo an Impost- J Hon, I am aware that I am taking a very grave responsibility. I am aware that ( there aro men connected with this enter Arise who aro entitled to public respect. Notwithstanding this, I take the responsi bility of stating that the New England Gas & Coko schemo Is n Monstrous imposition Oh the different Interested parties to whom this statement Is addressed, and I am ready I to justify my statement In the court or J el&ewhoro, i. Beforo analyzlhglhisschcmo I call atten- I l! tldnto tho fact: The statements mado by I ' rjiearo from my personal knowledge, ac- J quired as Vice-President and Director In ll tho several gaa couipaulcs, and as tho ncgo- 1 ,1 tlatdr of tlio various settlements, deals and 1 ' reorganizations that bao been consum- W . faiated or attempted in tho Boston gas field during tho past three years, and as t am In M possession of tho original documents pcr- Vn I , taliUnfC to or connected with tho instde his- W tory of iho Boston gas companies, my SJv StitterucntH cannot be refutedi 'The following aro tho Company's W ORll'lal UoruiftenU Selling Fnrlh too X(ir Eds- S I Inud Una Mud Coke Scheme. if' "AQltKEMKNT mado this twenty-sixth K day ot November, In llio yeir 1897. by nntl S i htttreMi Uio NEW YOltK OA3 IMPROVK- 7 MKS'T COMPANY, acorpornti n croatetl and Ji (J 'exlitins under tbo laws of tho Stale ot Now n York (hereinafter called the Imptovoinont IlI'I Company) party of tho llrst part, and tbo 1 CEST11.1L TltUHT COMPA NY ot .Vow York. U I , a corporation cronted anil exlathicr under the 1 Laws ot the Bute of Now York (hereinafter I I cnlloJ tbo Trust Cotupinjh party ot the jjfi scond parti i WHEHKAd. thn sat'l tniiiroronient Coin- Pny has hordtofora enteral lntu an agree- 1 .1 ment In writing with tho Now K-islaii Qas & l Coko Company, an unincorporated xoluntary il ,K association, wherein nuil whereby It ha9asrecd ) 1 to endeavor to procure a loan in the accrec'to If- f amouiltof Sl'J.OOO.OOO, toenablethe said New J H frliilind Cjmpnnr to purchnso and acquire H (18,r00kbarei, of the par raluDot 7100 each, l) tf the oaplttl stock of tbo Krookline (las Llirlit VatayXxiy, a corporation of the State ot Macsa- 'I chUsotU; R,l7(t shares, ot the par value ot 1 (103 oju.Ii, of tho capltil stock of the Dorcbec- i tor Gas Light Company, a corporation ot thu I Ktntu ot MjiiacU'iictts; certlflouas ot Indebt- V I fcilnosiot tlio sali Brookllno Oa L'chtCo'ii- IH H ' lan aiuouiUlne to $1,01.1,000, ptr value; IN I 3)oston Unttoil Oas bonis, llrst series, bear- In f '" flT0 l,sr ctnt- loterost, payablo .Tan- llf? nary 1. 103l, to tbo amount ot $1,000,000; lB -133 J thai us, ot the par valnoof 100 eich, of Jfj Ibo i;i(i'a-il stock of the Jamaica I'lanGas Tm Xijfht Cdfnrlany, it eofpdratinn ot tho Slate of hn Mtssiubr.scttsi an! thu ontlro oiiltal stock ml ' tho Massaehuietts Pipo lilne Company, n S I conuratlun at tho Stato ot Massachusetts; ;j. linit cortain roal ostalo lii tbo toun of H i! Uterctt, near tho cltr of Iloston, In said V 'HtiiteotMassocbusottB; im 1 alsocorliln other u$ 'tihfds of said ami other lompanics cnrrjlna IjjKi on bustncB in said Btnie ot MassncbusclU; WmT , Bj tocniiblo tho said Now lnclnnd Company (H to ercet plants tor tbo manufacture of coko, Kg BM, nhd other slnillnr products upon said real fjM .ostato niul other real csthto in said Statoot i H VUssachusctts which It now owns or may here- H after acquire, or hnVo tbo right to build upon, i HJ by purchase, Icaso or othorwlso; and H ; WHKREA9, tho said Now Kuiflnnd Com- j H pany has duly coi enanlod In and by tbo tcf ma f of said aeroement, to deliver to tholmprote- BBr rdont Company or to the porson or porsons, &K firm, copartnership or corporation from whom tni cr wu'c" ea' Iniprovcmcnt Company shall PLI obtain said loan, at or beforo the making of 1 q the same, tb securities and property herein- ! I ' otter mentioned! Wf NOW, THEItKFXJUE. in consideration of the nLj promises and of tbe mutual covenants and Of asrecments horeln contained, the said parties ll have aitreed and do hereby ogroo each ulth ff tl)e other, as follows) Zllp f . Tno Trust Company agrees to loan to tbe Jg Improvement Company tho buiii of twelve rM million dollars ($12,000,000) upon the prom- I I Issory note of said Improvement Company, to B I which referoaco Is hereby made, dated Doceui- IV. I r ' 18"7. pnyahlo on tho first day of August, I Ti, 109, with Interest at the rato of live per cent. I la I"!r annum from tho date thereof; and as com- I pentatlon and commissions said Improvement I I Company agreos to deliver to said Trust Com- I r pany shares owned by It of tho capital stock 61 I I said New England Company to tbo aggrcgato Hi m amount ot two million four hundred thousand BY L dollars, par value. Wijg II. Tbo Improvement Company shall deliver yjm ' .to tho Trust Company, at tbo thno ot tb9 jn making of tho loan aforesaid, certificates ot VI slock ot sold Now England Company, duly in- I J dorsed In blank, or as may be required by tho -; Trust Company, representing four million eight hundred thousand dollars, par value, of such capital stock of a total issue of seventeen g ! million flro hundred thousand dollars, par f value, and also its bonds to the amount, par I. valuo, of twelve million dollars of u total Issuo of seventeen million five hundred thousand dollars, nar value; such bonds to bear Inter- 4 jest at tbe rato of 11 vo per ccut. per annum from Decvmbor 1, 18117, pajublo seinl-niinu- f ally, and to bo secured by tbo transfer und Ik? ! 'pledge to said Trust Compnii), as Trustee, ot ;1 all toe securities niul personal property so to VF I ho purchased and acquired by tbo Now Jing- . I Jnd C'ompaoy, nud tho transfer and morlgago nil) ot all tbo real estato now owned or to ba pur- Vll (thatcd nhd ncqulrod by said Son Kngland ixjl Company; under an Instrument In tho uaturu vim ot pledge or mortgage to bo approved byeald Jfvjf Trust Company. All of tho said sharos of ijKr ktoek And bonds shall bo hold by tho Trust Ljf?" Company as security for tho payment of sold fj loan. t HI, The New England Company shnll not he It A entitled toilinwanyporttonofsaldSl'.'.OOO.OOO PVl loan, except for the purposes bcrelubeforo ro- I ,r cued, and all property ublcli snail bo acquired tx j by tho Now England Company by means of liy such loan shall forthwith bo transferred or I on ej ed to tbu said Trust Cosupnuy, us Trus- bV tec, fur tho security of tbo New Knglund Uim 3 pnny's bomls aforesaid. 8Pj s Jv;, Tho caM lo.in is mado upon the faith 'nud vrodll i( an unltrwrllingaKrecment In W l' the lonil, U' sUUtniitlNlly tho form, horeuh- to tuucxtJ, marktu "A," aud tbo Improve- ment Company agrees that on or before tha first day ot December, 1807, It will procure, or causo to bo procured, an execution of such un- , dorwritlng agreement by persons, firms or corporations satisfactory to tho Trust Com pany, whereby such porsons, firms or corpora tions shall agreo to take tho entire amount of Said shares ot stock and bonds of tho New England Company so to bo deliverod to the Trust Company, upon tho terms set forth in said underwriting agrecmont. This agreement shall not become effoctlve ,untll such underwriting agreement shall liavo been duly oxecuted and delivered ta tho Trust ' Company, and when tho same shall bavo boen executed and delivered tho Trust Company shall be, and is horeby nuthorlzod and em powered to dollvor tho sharos of stock and bonds mentioned therein to tho several por sons entitled thereto undor said agreement, as thoy shall becomo entitled to the samo, and to apply the moneys received theroundor to tho paymentand satisfaction of tho said loan of $12,000,000 and Interest. V. Tho ImprorementCompany shall have the right, upon payment ot tho interest upon said loan, to extend said loan for a period Of six months from and after August 1, 1898, upon delivery to the Trust Company ot shares ot tho capital stock of said Now England Com pany to tbe amount of six hundred thousand dollars, par value. IN WITNESS WHEREOF, Memorandum In Relation I the Purchase of Ida Boston Caa Cotnpmnlw." The New England Gas & Coke Company has purchased, as appears In the underwriting ngrcement. practically all tho stock of the Brooktlne. Dorcliostor arid Jamaica Plain Gas Light Companies; WHICH PURCHASE CARRIES WITH IT THE CONTROL OK THE UAY STATE GAS COMPANY OF MASSACHUSETTS, THE BOSTON GAS LIGHT COMPANY, THE SOUTH ROSTOV GAS LIGHT COMPANY. AND THE ROX UUIIY GAS LIGHT COMPANY; BRIEFLY -ALL THE OAS COMPANIES IN THE CITY OF BbSTON. The PURCHASE OF THE COMPANIES above named, together with the charter of the Massachusetts Plpo Lino Company and tbe license of tbe by-product coke ovens (including the building of tho ovens), COST $14,000,000; and In said purchase $2,000,000 of the securi ties of the company wero used In payment. The remaining $12,000,000 required cash has been loaned upon tho company's securities by tbo Ooutral Trust Company ot New York, for n period of eight months from Dec 1, with tbe privilege on the part ot tho New England Gns & Coke Compa'n) ot an extension ot tho loan for six months. The underwriters receive par ot bonds, with a bonus ot 10 per cent, stock. The Gas Companies In the proposed purchase earned NET tor the year ending June 30, 1507, In excess of.. $460,000 Estimated profit on Coko and on Gas Residual 24B.500 Snlo ot 2,500,000,000 feet ot gas at 20 cents, per contracts 800,000 Saving by ilso of coal-gas by Brook lino nnd Dorchester Companies at 10 cents od 1)00,000,000 feet 00,000 Total net profits $1,209,500 Interest on the $12,000,000 bonds to be untlcru rltten and the $2,000,000 used Irt purchusing gas properties, patents and franchises 700,000 Rood to tho stock $398,500 As will be seen from tho above statomont of earnings, basod Upon the engineers' figures. there will be applicable for dividends a sum equal to approximately 4 per cent, upon tho stock ($14,000,000) outstanding, as soon as the ovons can bo finished, which will take about nlno months. The question as to the Issue of bonds has not been definitely determined, BUT THE PLAN CONTEMPLATES HAVING THEM BROUGHT OUT BY TRUST COMPANIES IN THE CITIES OF NEW YORK, PHILA DELPHIA AND BOSTON. Claims or the Xfw England Oas A Cob Com pany. Hy these, documents it appears that an aggregation of men, calling themselves tho New England Gas & Coko Company, have put afloat $14,000,000 bonds and $17,500,. 000 stock, upon which they have borrowed from a New York Trust institution $12, 000,000 cash. It appears that they aro asking tho In vesting public, through banking bouses and otherwise, to Invest In these bonds at one hundred cents on a dollar. It appears that they promise that tbo New England Gas & Coko Company shall cam and pay, from sales of gas to tho present consumers, in the city of Boston, and upon tholr pres ent consumption (2,000,000,000 feet, $1,000,000, plus $248,000 from tho sale of coko and other products), 5 per cent, on tho $14,000,000 bonds and 4 per cent, on tho $17,500,000 stock. Jt appears that tho cntlro security and assets behind theso $14,000,000 bonds aud tho $17,000,000 stock aro certain stocks, bonds and ovidences of Indebtedness of the old Boston gas companies j and whatover now property may bo created with $1,000, 000 to $2,000,000 cosh. It appears that tbe total of tho stock and bonds purchased by these people and put behind the$14,000,000 bonds and$17,000, 000 stock represent only 28 per cent, of tho existing stock, bonds, nnd Indebtedness of tho old Boston gas companies, and that tho new property to bo created will comprlso a lot of marsh lands In tho town of Everett, aud Home coke ovens to bo erected thereon. It appears that they havo obtained tbo control of tho Boston, South Boston, Box bury und Bay Statu ot Massachusetts Gas Companies (the companies now owning otcrtbreo-qunrters of tbo gas property of Boston, and doing over two-thirds of Bos ton's gas business, not by purchase, or tho oxpcndlturo of dollar ot tho proceeds ot thusalo ut theso $14,000,000 of bonds and $17,000,000 stock, but In somo miraculous way not set forth. It uppears, from other ofllclal and semi ofllclul statements, that tho earnings above mentioned uro to bo secured without an ad ditional tux on thu consumers of gas. Iiiiuoulblllljr or S'uinillMS Claims. Tho things and conditions that appear in tho above recited documents, and upon thu fuliu of u lilch this New York Trust in- ""' I ' ' '-"! ! ' ,l"' ' etitutlon has loahed tills large amount of IU deposits, and the publle aro asked to ln vest, do not In fact exist, and tbo promises mado nro imposslblo ot fulfilment, it Is certain that under no conditions can tho bonds ot tbo Now England Gas & Coko Company over be worth ono-half of tbo prlco nt which thoy aro offered, or Its stock over bo worth anything from any opora tlons dependent on tbo ownership or control ot tho principal gas companies tZ Boston: namely, tho Boston, South Boston, Roxbury or Bay Statoof Massachusetts. Tho property received for tho $12,000,000 cash which lion already been paid Is not now, nor can it ever bo made, worth, by any operations ot tho Now England Gas & Coko Company, ono-half of the amount paid Tor It by them. Tho laws of Massachusetts, and tho regu lations ot th6 Board ot Gas and Electric Light Commissioners do not permit tho existing gas companies to earn or pay an nually an amount suIUcicnt to pay more thnn 2i-j per cent. Interest on theso $14, 000,000 Now Englnnd Gas & Coko Com pany bonds, Asldo from what tho Iuwb allow, tho companies aro only earning enough to pay 22 per cent, annually on tho $14,000,000 bonds, and cannot earn tnoro without further taxing tho consumers of gas. And If moro than tho present amount allowed by law was admitted to bo earned, tho companies would bo compelled to return such additional earnings to tho' consumers, by means of an enforced reduc tion in selling price. Tho New England Gas & Coko Company has not acquired coulrol of tho Boston, South Boston, Roxbury aud Bay Stata of Massachusetts Gas Companies, and It will never bo able to. It becomes necessary because of my fore going unqualified assertions to glvo a state ment of tho factB which havo led up to tho present gas situntlon, many ot which have never beforo been disclosed. Boston Gas situation. Originally there wcro in tho Boston gas field tho Boston, Hoxbury, South Boston, and Dorchester Gns Light Companies. In 1887 J. Edward Addicks and associates created tho Bay Stato Gas Company of Massachusetts, with full rights to parallel all tho pipes ot tho four companies above nntilcd. After this company hnd expended several millions ot dollars in the erection of works and laying of pipes, tho owners ot the Boston, Roxbury, South Boston and Dorchester companies sold the entire capital stocks of their respective companies to Mr. Addicks and his associates. Substantially all tho stocks ot tho Boston, Roxbury and South Boston companies, together with tho capital stock of tho Bay Stato Company of Massachusetts, wcro subsequently trans ferred to the Bay State Gas Company ot Now Jersey, aud by It (tho Bay Stato Gas Company of New Jersey) transferred to tho Mercantile Tritst Company of New York, to be held In trust by It (tho Mercantile Trust Company), as security for tho pay. ment of $12,000,000 Boston United Gas bonds, Issued by thoBny State Gas Company of New Jersey. Tho entire capital stock of tho Bay State Gas Company of Now Jersey was thereafter transferred to tho Bay Stato Gas Company ot Delaware, In consideration of an agreement whereby tho Bay State Gas Company of Delaware forever guaranteed to mako good any deficits in the earnings received from tho stocks of tho companies held by the Mcrcantllo Trust Company, up to an amount necessary to pay Interest and sinking fund on the $12,000,000 of the Boston United Gas bonds. Under this trust agreement the Bay State Gas Company of New Jersey is tho absolute owner of tbe stacks of the four companies deposited with tbo Mercantlln Trust Com pany. And as the entire stock of tho Bay State Gaa Company of New Jersey is owned by tho Bay StntcGasCompanyof Delaware, It is tho absolute and irrevocable owucr of tho four companies whoso stocks are held by the Mercantile Trust Company, and through such ownership it, tho Bay State Gas Company of Delaware. Is enti tled to tho control, management and nil benefits coming from tho four companies whoso stocks aro deposited with tho Mer cantile Trust Company . And, in addition, it is entitled to actual possession of all of said stocks, when, by th operation of tho annual sinking fund, th bonds liavo been redeemed, or when by tho sale of property, or otherwise, thoy have been paid off; or when tho Bay State Gas Company ot Dela ware, by purchase or otherwise, acquires them. Under tbts condition of affairs tbe Bay State Gas Company of Delaware con trolled aud managed all tho companies In the Boston gas field above mentioned, and from their earnings paid inter est upon the Boston United Gas bond's and from tho surplus earnings paid Interest upon its own bonds, nnd dividends upon its stock, until tho advent into tho Boston gas field of what Is popu larly known as the Standard Oil party. This party created an opposition company, tbo Brookllno Gas Light Company, and In stituted a competitive warfare which, amongst other things, reduced the net eprn Ings of tho local companies to n point which created a deficit of a very largo amount lu tho earnings necessary to pay Intcrcstand sinking fund on Boston United Gas bonds, which deficit was supplied by tho Bay Stato Gas Company of Delaware. This warfare terminated in May, 1800, un der tlio following conditions, I personally conducting thn negotiations on behalf of tho Boston und Bay State Company : Stawtara Oil Sale. The Standard Oil party agreed to sell to tho Bay State Gas Company of Delaware Its cntlro holdings in tho Boston gas field. (Tho agreement to sell, lit thu opinion of attornoys, would bo Invalid If mado direct ly to tho Bay State Gas Company of Dela ware, and to ovcrcomo this obstacle I mado tho agreement run to Henry M. Whitney, w ho first mado a contract to nsslgu said agreement to tho Bay State Gas Company of Delaware, which nsslgumcnt was at onco executed by him.) This agreement gavotho Bay State Gas Company of Dela wnrountHNov.1,1800, to pay for same, nnd, pending payment, gave tho Bay Stato Gas Company of Delaware practically tho con trol of tho Brookllno Gas Company. Tho Bay Stato Gas Company of Delaware upon Its part, as a guarantee that It would not destroy tho Brookllno Gas Company during tho time It controlled It, caused tho Boston Gas Company, which It controlled, to enter Into a contract with tho Brookllno Gas Company. This contract, which I drew, and which has been tho causo ot mo much comment, and which linn been kept secret, although sought by tho Board of Gas Com missioners and the courts, is in substauco as follows; Tho Boston Gas Light Company agreed to buy of tho Brookllno Gns Light Company each year enough gas at $1 per thousand feet (the maximum price allowed by law to bo charged any retail consumers) to enable tho Brookllno Gas Light Compuny-topay all expeuscs and charges, aud 10 per cent, l-t aiijj M i a i v V m f i - ... jJi upon Its CftpltAl stock. As tho laws of. Massachusetts did not allow tho leasing ot ono company by another or tho guarantee bt ono company's securities by ntiothcr, tho agreement was at tho tlmo It was mado voidable. I know then, as now, that it was voidable; and was advised by counsel at tho tlmo It was made, that It was voidable, and would not stand It contested, but as tho purposes for which It was intended wore for tbo best Interests of all concerned, Including tho public, It was, without doubt, judicious to mako it, and keep It n forco until It should bo voided or tho pur poses for Which It was created ceased to exist. By this coktUact tho Brookllno Gas Light Company was enabled to pay Its expenses, charges and 10 per cent, dividends on Its stock at this kx pekhe 'of tho Boston Gas Light Com pany, nnd Its (tho Brookllno Gas Light Company's) $4,015,000 of securities wcro mado worth tho $0,000,000 which tho Now England Gas & Coke Company bavo paid for them, and when this contract Is voided tbo Brookllno Gas Company will ceaso lo pay Its expenses, charges and divi dends, and Its $4,015,000 cupltal and se curities will bo worth in tho neighborhood of tho $3,000,000 which they were Wotth beforo this contract was entered Into. In passing upon tho propriety ot this contract, or tho policy of creating and keeping It In existence, It should bo borno in mind that at tho tlmo It was mado all tbo companies passed into a common ownership, and no interest could bo wronged by a bookkeeping division ot tho common earnings; but now, under present conditions, with tho Boston Gas Company owned by tho Bay Stato Gas Company ot Dolawarc, and tho Brookllno Gas Company owned by tho New England Gas & Coko Company, a great wrong would be dono tho public and tho Boston Gas Com pany and tho holders ot Boston United Gas bonds, whoso principal asset Is the Boston Gas Company, If tho contract was allowed to remain in force. Under tho conditions brought -'n ex istence by this agreement of Mayl, lepO, the competitive waifaro ceased, and tho Bay Stato Gas Company of Delaware began tho task of raising tho necessary money to pay over to tho Standard Oil party. Its arrangements were nearly completed when It mot with an unforsccn and unexpected misfortune, which entirety destroyed all chance of securing tho necessary cash within tho timo In Which tho payment was due, namely, Nov. 1, 1800. Early in October certain parties, whose motives it is unnecessary to char acterize, secured a receivership ot tho Bay State Gas Company of Delaware, thereby tying up Its cntlro assets. This necessi tated radical measures on the part of tho Bay Stato Gas Company of Delaware, tho owners of all tho local companies, other than tho Brookllno Gas Company. To judge properly of tho events which led up to the transfer of tho management of the local companies by the Bay State Com pany of Delaware to the Standard Oil party on Nov. 1, 1800, tbe then existing situation must be kept In mind : standard oil Purchase. On tho flOth day of October tho Bay Stato Gas C'ompnuy of Delaware was In control of all tho local gas companies, tho Boston, South Boston, Roxbury, Bay Stato of Mas sachusetts, and Dorchester, by actual own ership, find of tho Brookllno tuider tho agreement of May 1st. It Was obliged by tho ngrcen'cai of May 1st to pay millions of dollar. to the Standard Oil party on Nov. 1st, or to return to tho Standard Oil party the Brookllnj Gas Company. As, owing to the receiver ship, it did not havo control of sufficient assets to mako the payments on Nov. 1st, It had a choice of two alternatives: First, to return the control of the Brookllno Gas Company to the Standard Oil party, there by reinstating tho competitive war fare and jeopardising its entire inter ests, or, second, turning over to tho Standard OH party the temporary manage ment of its fivo local companies undeh iMiorrn Aour.EMr.NTs as to restrictions and ouAHAMnra, and thereby preserving its Interests, by insuring Itself against a return of the competitive conditions cx istlmrnrlor to tho makluir of tho nurcc ment of May 1st, Ifltchosctho first alternative, Intricate and dangerous litigation was inevitable, from tho fact that it had, whlls in control of tho Biookllus Gas Company, necessarily sonmnagedtho latter's affairs that it would lio Impossible to return tho Brooklino Gas Company In tho same condition it was re ccUcd. Wlillo, therefore, It apparently had, as above stated, tho choice ot two things, it practically had no cholco other than what was dono on Nov. 1st. Much has been stated In the public prints and other wise of what really took place on Nov. 1st. What tho public knew occurred was that tho no-called Bay State Gas Company of Delaware management of tho local com panies was turned over to tho Standard Oil party. (I conducted tho negotiations on behalf of tbo Bay State Gas Company of Delaware and the local companies ; was a party to all tho agreements which were en tered into, and therefore speak with au thority.) By tho trado which was mado on Nov. 1st, the Stnndaid Oil party enmo to the management temporarily of tho Boston, South Boston, Roxbury and Bay S'ato of Massachusetts Gns Companies, and becamo tho absoluto owners of tho Dorchester nnd Brookllno Gas Companies. The Bay Stato Gas Com pany of Delaware camo into possession of aguarauty that Its ownership of the Bos ton, South Boston, Roxbury and Bay Stato of Massachusetts Gas Companies should bo preserved until tho manage ment was returned to It In nny of a number of ways optional with it, tho Boy Stato Gas Company of Delaware. This was tho trado mado on Nov, 1, 1800, nothing more, nothing Ichh, and regardless of all statements by tho promoters of the Now England Gns & Coko scheme or others who aro Ignorant of tho facts, TiintK was notiii.no honk at ItlK TIMU THU TIlAlll! WAS MAD!.', Oil AT ANY OTHER TJML', Oil INTENDED TO III! BONK, WHICH IN ANY WAY IMI'AIIlUIl TIIK OWKKlt- siiip by the Bay Stato Gas Company of Delaware of tho four companies named, or Its rights to at any tlmo under certain conditions, resuma Its former management of tho four companies owned by It. Tho Boy Stato Gas Company of Delaware can retako the possession of tho Boston, South Boston, Roxbury and Bay State of Massa chusetts Gas Companies when It, either by purchaso, redemption, operation of tho sluklng fuud or In otheu ways, obtains or cancels tho $0,000,000 Boston United Gas bonds, first series. No one. other than tho promoters ot tho Now England Gas & Coke schemo (who are In utter Jgnoranco ot tho agreements and declarations of trust of May 1 and of Nov. 1), has had tlio temerity to suggest that tho management of these local companies, tegetber with all of tholr propdrty nnd oAsfto, will not bo re turned td this Bay Stfcto 0 a (Wtripahy'bl Dolaware( ovon if the Bay State ot Dela ware takes no htcps whatover, nhd simply waits for tho sinking fund to relieve It ot tho obligation aud return tho profits and management of tho local companies. I havo described tho condition ot tho gas situation down to tho advent ot tho Whit ney-McMtllan syndicate or Now EnglaUd Gas & Coke schemo, and beforo treating ot this matter, I will briefly summnrtto the situation as It then existed. Bay Blato Control. The Standard Oil party were In control of tho cntlro Boston gas situation by tho ab solute ownership of tho Brookllno and Dor chester companies and tho temporary man agement of tho Boston, South Boston, Rox bury and Bay Stato ot Massachusetts com panies. Tho Bay Stato Gas Company of Delaware absolutely owned tho Bos ton, South Boston, Roxbury and Bay Stato of Massachusetts companies, and had tho unquestioned right to tako back tho management ot them at any tlmo by settling In any way with tho $0,000,000 ot Boston United Gas bonds, first series. Tho four companies owned by the Bay Stato Gas Compauy of Delaware wcro earning BUfllclcnt to pay all fixed charges, and the Brookllno and Dorchester Gas companies, through mid by tho con tract with tho Boston Gns Company, wore enabled to cam nil fixed charges and 10 per cent, dividends upon their rcspcctlvo capital stdeks. Tho Bay Slato Gas Company of Delaware was rapidly placing Itself In position by tho snlo ot its increased capital stock, and In other ways, to tako back tho management of tho four companies owned by it, and purchaso from tho Standard OH party Its Brookllno and Dorchester Companlce. Tho four compa nies belonging to tho Bay Stato Gas Com pany of Delaware owned property, teal estate, etc., at this tlmo to an amount of more than $12,000,000. Tho equities In the four companies belonging to tho Bay State Gas Company ot Delaware, over aud abovo tho $12,000,000 Bos ton United Gas bonds, wcro conserva tively worth at this timo nt least $5,000, 000. There was at this timo and Is now In operation a sinking fuud which would In a limited timo payoff the $12,000,000 of United das bonds, leaving tho $12,000,000 aud over of property and tho valuablo franchises free and clear for tho Bay Stato Gas Company of Delaware. There were at this tlmo laws In forco In tho State of Massachusctti which mado It Im posslblo for nny of tho Boston gas companies to Increase their capital stocks, or consolidate, or leaso each other, or guarantee each other's securities, or to enter Into nny working arrangement, tho equivalent of such lease or gua! ant ee, or to earn from tho sale of gas, or otherwise, a sum moro than sufficient to pay fixed charges aud 10 per cent, dividends upon tho outstanding $8,000,000 ot capital stocks. Under tho then existing conditions tho Boston gas situation might be altered In two nays: One, to allow things tocontlnuo as they were, until by the operation of tho sinking fund,or othet wise, all the propirty of tho different companies would bo re turned to tho Bay Stale Gas Company of Delaware; the other, for the Bay Stato Gas Company of Delaware to again assumj the management of all tho companies by tbo purchase, or otherwise, of tho Brookllno and Dorchester companies, and the resumption of tho management of the four com panies owned by It. Tho latter was what thoIiayStno Gas Company of Delaware was on theoveof accomplishing when there appeared In the field tho Dominion Coal Massachusetts Pipe Line Whitney-McMillan syndicate -New England Gas and Coko scheme. Before analyzing this com bination or scheme I wish to express my re gret thai ciicumstnnccs compel me to place this combination in tho light which tho facts warrant. Dominion Cont Conlpnuy. Thn Dominion Coal Company is an over capitalised scheme, having for a basis a few ot tho coal mines In tho Province of Nova Scotlo, and for an object tho float ing of a vast amount of watered secur ities on tho public. Tho Dominion Coal Company's only right to bo mentioned in connection with Boston gas atlnirs l- Its claim to be ablo to placo In tho markets of New England n coal at so low a price as to enable those who handle It to manufacture illuminating and fuel gas at no cost. (See their ofllclal statement printed above: "Snlo of 2,000,000,000 feet of gas nt 20 cents per thousand feet, per contract, $000,000 gross and net.") I will pass the Dominion Coal part of this schemo as being unworthy of Bcrious consideration. MnMncbusttts I'lpe Line. Tho Massachusetts Pipe Lino Company represents nothing hut a charter procured from tho Massachusetts Legislature of 1800 at n largo expenditure of money and an un limited number of unredeemed promises. It was originally intended ns a complete consolidation scheme, whereby all tho Bos ton gas companies were to bo consolidated, and for tho term of Oil years to be absolutely free and unhampcicd by any of the lawB now existing or to enran Into existence, for the regulation nud restriction of the manu facture aud snlo of gas. At the time this chatter was under consideration by the Legislature, seeing Its valuo to tho old companies, of which I was Vice-President and cxccutlvu otliccr, as n consolidation measure, which they had rnlnly sought from every Massachusctti Legislature since 1687, I, on behalf of the old companies, entered Into an agreement with its promoters for a Joint ownership upon its passngo In Its original form, so I speak by authority when I say that tho Massachusetts Plpo Linn chnrtcr was Intended for tho purpose of consolidating and combining the old companies, und that up to tho cry last day nt tho Legislature the chatter, asdrann and passed to this, its last stngo, was worth, for consolidation purposes, a very largo amount of money. And I also speak by authority when I say that upon I ho Inst day of tho session, tlio House of Representatives was stampeded to tlio extent that It allowed tlio passage of an amendment re stilctlng tho price to bo charged for gas to 00 cents per thoustud Instead of $1 as originally Intended, and by tho adop tion of this amendment tho charter was mado absolutely valueless, and that tho causo of this stampede was llio discovery that tho limitless number of promises which had been mado were not intended to bo fulfilled. I dismiss tho Massachu setts Plpo Line portion of the subject with tho assertion (hut It is capable of demon stration that It In not worth now, or over will bo worth, the price of tho paper upon which It Is printed, At the tlmo when thu BayStato GasCom pauy ot Delaware was about to resumo the management of thu Iloston gas companies, icrtalu people entered thu Held for tho pur- poso of booming Hits securities' of tho Do minion Coal CoropAny( which owned tho Massachusctta Plpo Lliio charter, and In this process statements wcro mode that tho Massachusetts Plpo Lino Company Mros to supply tho Boston gas companies with their Imaginary gad at nn enormous profit to tho Massachusetts Pipe Lino Company. Upon tho publication ot such statements I deemed It proper, In thd Interest of Boston United Gas bonds, to brand such statements as false, and to assert, what I now maintain, that It Is ImpoBslblu tor tbo Massachusetts Pipe Lluo Company or any other company to supply tho Boston gaa companies with gas, thereby throwing Into dlsuso all their valuablo plants and real estate, without first cancelling tho Boston United Gas bonds, thereby turning tho property back to Its rightful owners, tho Bay State Gas Company of Delaware, nor without first obtaining tho consent ot thu Bay Stato Gns Company of Delaware. Tho Bay State Gas Company of Delaware emphasized my statements by making urraugomcntn to at once tako back from tho Standard Oil party tho Boston, South Boston, Roxbury and Bay Stato of Massachusetts Companies. At this time, and beforo urrangementH were completed, came the New England Gua & Coke Com pany. llew Kiisland (las & CoUo aolionip. Tho promoters ot tbo boom ot Dominion Coal nnd Massachusetts Plpo Llitc, learn ing that the Bay State Gas Compauy was about to resume tho management of tho companies ownod by It, and thereby bring about a disastrous nnd Ignominious col lapse of tholr schemo, hurriedly got together tho aggregation now known as tho Now England Gas & Coko Company. This aggregation hastily proceeded to negotiate with tho Stand ard OH party for the purchaso of its Brookllno and Dorchester Gas Companies nt any cost, provldod the Standard Oil party would, lu consideration ot tho amount paid in excess of tho actual valuo of tho Brookllno and Dorchester Gas Com panies, causo these promoters to bo elected to the management of tho four companies which tho Standard Oil party hold In trust for tho Bay Stato Gas Compauy of Delaware, tho prlco finally agreed upon and paid bolng so inflated and out ot all proportion to valuo, past, present, or pros pective, as to mako the entire transaction ono of the curiosities ot financiering, and the result was tho astounding documents which arc printed at tho head of this state ment. There were at the time ot tho ad vent of tho New England Gas & Coko Com pany Into tho Boston gas field tho following securities outstanding, representing tbo real ownership ot the Boston gns com panies : BHOOKLINE OAS COMPANY, Slock SO, 000,000 Donds i 1,000,000 Floatlnc debt l.OlS.OOO DORCHESTER GAB COMPANY, slock B3O.O0O JAMAICA PLAIN GAS COMPANY 900.000 BOSTON GAS COMPANIES, liondB, Drat and second series.. 13,000,000 Debt, I.OOO.OOO a total or. am.tias.ooo Tho selling market price of all these secu rities was $10,000,000. Tho maximum amount all the nbovs companies were al lowed by law to earn nnd pay out In tho form ot fixed charges and dividends was $1,003,000. The amount of tbe abovo se curities which have been purchased by tho New England Gas & Coko Company is, according to their official statoment, herein printed : BROOKLINE GAS COMPANY. Stock ai.HBO.OOO Debt l.oia.ooo DORCHESTER GAS COMPANY, lock sso.ooo JAMAICA PLAIN GAS COMPANY, Stork 1SN.900 BOSTON GAS COMPANIES, lionde 1,000,000 Total 93,130.900 Tho amount outstanding which has not been purchased by tlio New England Gas & Coko Company Is $13,211,800. The maxi mum amount of earnings which can go to tho Now England Gas & Coke Company from the Boston gas companies, presuming that tho contract between tho Boston and Brooklino companies remained in force, Is $381,000. And tho balance, $701,180, must alwayo bo paid, as now, on tbo out standing securities not owned by the Now England Gas & Coke Company. necklets Financiering-. In tbe abovo statement tbo enormity of what is being attempted by this New Eng land Gas & Coko scheme stands forth In all Its nakedness. Tho Now England Gas & Coko Company, and wo uso their ofllclal documents set out abovo, which do not put tho transaction in a worso light than tho fusldo truths warrant, has Issued $17,000,000 stock and $14, 000,000 bonds. Its promoters proposo to sell Its $14,000,000 bonds to the public for $14,000,000, and to givo away, for no money consideration, tho $17,000,000 stock ; and With tho procoeds of tha salo of bonds, $14,000,000, thoy havo already pur chased, as set forth above, $0,123,200 of tho securities of tho old Boston gas com panies, for which, plus marsh land in an Outlying town to Boston and somo coko ovens to bo erected thereon, It has paid directly nnd Indirectly $14,000,000. It it had also purchased the balance of the out standing Boston gas securities upon tlio same basis.it would havo paid over $30, 000,000 additional, or upon a basis of over $10,000,000 for what was selling at tho tlmo of their purchaso nt about $10, 000,000, nnd a stiort tlmo previous at $12,000,000. Uy tlio publication of the ofllclal state ment ot tho Now England Gns & Coko Com pany, wherein they say, "Tho Now Eng land Gns & Coke Company has purchased, asnppcnrs in tlio underwriting agreement, practically all tho stock ot tho Iiiookllne, Dorchester and Jnmaica Plain GnH Light Companies, which purchaso car ries with it tho control of tho Hay Stato Company of Massachusetts, tho Bos ton Gns Light Company, tlio South Boston Gas Light Company und the Roxbury Gas Light Company hi lolly, all the as AfaTjanl companies Irt the city ot Boston, to 'Hani gother With tho Massachusetts -Pipe Lltta JNfl Company and the ltcchsd of tho coko -jfll oVchs, Including llio building of the ovons, V.1 nt A cost of $14,000,000," tho present JomH Boston gaa situation Is revonlcd to hot iFI Certain people havo agreed to supply V $14,000,000, which they Intend to secure H from thu public through tho salo by thorn (,'uH to tho public of $14,000,000 of bonds for 3jH $14,000.0(10'. it they do hot sell these itoH bonds aud sccurotllls$14,ODO,ubO thoy $111 3H bo compelled to return to tho' Central HH Tmst Company $12,000,0110 within eight) ''HH months, or tho most Intricate nmU'pn- nl palling litigation will tako place, it thoy tH do soil theso bonds to tho public, they iraaaal will bo compelled to fill 11 1 represcnto vLaal tloria. first, that thoy hold control bt tho fll Boston, South Boston, Roxuiiry and; Bay Stato of Massachusetts Gas coinmuTcs; 11 second, that tho earnings from $0,120,00 rfnanfl out of a total ot $18,3115,000 securities of !H tho old gas companion, plus $248,000 'VtH profits from tho halo of coke nhd tar, trill '?!vl glvo tht'in sufficient returns nnuudlly to JLI pay $7tU),000 fixed charge1! tlpbtt botlde 'Hl aud over $.-00,000 dividends on stock! and, ilfl third, that I hew. earnings can ltd secured H without un additional tax on tllb Boston K?H gas consumers. , , ifl fnlte ItelirMcntntion, Vjaaaaal 1 laaaaal Cm these promises bo fulfilled?, v-To ''IH answer this question for tho benefit, .ot vB those to whom this statement Is addressed Is the purpose for which It Is Issued. 'And lA I ask tbo attention ot tho Holders f"M of Boston United Gas bonds, tho Bos- $H ton consumers of gas, tho Hoard of fl Gns and Electric Light Commissioners, j'SB and thn Incoming General Court,, to "jtl that which tho promoters of tho Now WB Englaud Gas & Coko Rchcmo must do to 7Ajtnaal fulfil tholr premises; and I plcdgo myself & that in comlnq proceedings in court nud HaH elsewhere I will show by what means tho f'5'aH Now England Gas & Coko schemo promo- -1 tors Intended to fulfil their promisee', It la 1 necessary for tho holders ot Boston United ' Gas bonds to know that to mako poss'lbla rH the fultllmout ot theso promises It will bo 'jiB necessary, upon tho completion of tho coko f.B ovens at Everett, to dismanllo and tllsposo -fl of tha valuablo real estato and plants nbw tfaaal Owned by tbo vnriouB Boston gas com- Hl panics, and which constltuto tho tanglblo itfl security back Of their bonds, and to Use tho fl proceeds, not, as Ib demanded by tho trtist, fl In the redemption of bonds, but dissipating &! tho proceeds In a way to rclmburso tho T-H holders of $17,000,000 ot New Kngland WM Gas & COko Company stock, which Is all -. i'JH water. Even Now EnglaUd gas and coal $H schemo promoters would not pretend "to H say that tho proceeds of this valuable prop H crty would bo used for tho redemption ot ?l bonds, for immediately these bonds are td- . deemed, tho property, franchises, and bUsl- Mm ness would revert to tho Bay Stato Gas M Company of Delaware. aH It Is necessary for Boston gas consumers irfl to know- that to make possible tho fulfil- Avci incut of their promises It will bo necessary M for tho New England Gas & Coke Company '.'M schemo promoters to secure from tho pros- ji'jaaal ont consumers of gas, and upon tho present -fB consumption (and I quota their official docu- $H ment), total net earnings In addition to what) fl is to-day taken from tho samo consumers, ot ill over $700,000 per annum. For ot tho total jS earnings secured from tho present Boston JjH gas conBumcrn, only throo hundred and o'dd M thousand dollars can go tothoNowEng- Sm land Gns & Coko Company, when, by thbir J own showing, they must receive, to fulfil j'" I their promises, $1,050,000, plus tho $246,- fVM 000 received from tar and other things, vM It is necessary for the Board of Gas and Mm Electric Light Commissioners to know that MM to mako posslblo the fulfilment of their promises, tho New England Gas ii Coko ' scheme promoters must kcop Intact an fl agreement now existing between tho !$ Boston Gas Light Company and tho tm Brooklino Gas Light Company, Which, "! in effect, is the strongest kind ot a ' j?fl lease, tho strongest kind of a security ' guarantee, tho strongest kind of a suppres- &m Kor of Competition, the strongest kind of an 5?B arbitrary price maker, and tho strongest &M kind of a violator of all tho present laws jgfl and past traditions which Bitrround the manufacture and Balo of gas In tho mm Statu ot Massachusetts, and to mako 15 posslblo tho fulfilment of theso prom- ;wB Ises, tho Board of Gas and Electrlo H Light Commissioners must closo tholr jffl eyes to tho fact that a saving ot $000,000 'IB per annum in tho manufacturing cost of wB gas, on tho prcsont basis of consumption, ? aud that ot a saving of $110,000 In tho cost) ot gas manufactured by tho Brookllno and ? Dorchester Companies, not one cont is lo . bo returned to gas consumers through a M reduction in tho selling prlco, ; And, lastly, It will bo necessary for tho ' Incoming General Court aud His Excel- JM lency tho Governor of Massachusetts, to -JB know that to mako possible tho fulfilment !$ of their promises tho Now England Gas& 1 Coko schemo promoters must again drag &M tho Massachusetts Plpo Lino Company to Jfl legislative halls, to the cud that they may M secure a dividend on tho hundredB of thou- ,; sands of dollars, which, by their own ad- ml missions, they bavo paid for this corpora- $l tlon curio. l It may be Imposslblo for any one in MM this, the end of tho nineteenth century, Si when financial miracles aro dally being Tfl paraded for tho edification of investors 'irj and speculators, to Hay with absolute ccr- -AM talnty that tho promises mado by the New ' Ml England Gas & Coko Company promoters , gl will not bo fulfilled. I can only pay that VM they w 111 not bo fulfilled until after tho , tjl Incoming General Court has had an oppor- fit tunlly to pass upon tho advisability of Ml allowing them to bo fulfilled, until Ml tho Board of Gas and Electric Light) fil Commissioners have had a chance to f exercise tho supervisory power for which they wcro created, and until tho courts, both Stato nnd national, have adjudicated J nil matters upon which theso premises nro i based, and until tho holders of Boston , j United Gas bonds, tho holders of stock and ,'m bonds of tho Bay Stato Gas Company ot M Delaware, and tlio Imcstlng public have M I had .iinplt! opportunity and tlmo to wkioii 'H 1 C'AIII I'l'I.I.Y AND HAMS AIUUniCATUU tlio M merits nnd demerits of this prudish child &'w of modern finance. -jM Thomas W. Lawsoh, Sr Dec. 23, 1807. M ' IJ OFFICE OF I LAWSOU, WEIEffElD & GO, Bankers audi Brokers, 1 NEW YORK. BOSTON. I 45 Wall St. 33 State St. Members of tfie New York Stock Exchange.