North American Company

This article is about the utility holding company broken up by the SEC in 1946. For other entities similarly named, see North American (disambiguation).

The North American Company was a holding company incorporated in New Jersey on June 14, 1890, and controlled by Henry Villard, to succeed to the assets and property of the Oregon and Transcontinental Company.^[1][2] It owned public utilities and public transport companies and was broken up in 1946, largely to comply with the Public Utility Holding Company Act of 1935.

Share of the North American Company, issued on February 9, 1892

Oregon and Transcontinental stock owned by Henry Villard

Its headquarters were at 60 Broadway in Manhattan.

History

In 1889, the New Jersey legislature passed legislation to facilitate the control of other companies by another corporation.^[3] This was part of a bid to entice trusts to convert into holding companies and move to New Jersey. It persuaded the Oregon company Oregon and Transcontinental to re-incorporate as a holding company in New Jersey and became the North American Company.^[3]

When the Dow Jones Industrial Average was created on May 26, 1896, North American's stock was one of the 12 component stocks,^[4] but it was replaced on August 26 by U.S. Cordage. On October 1, 1928, when the number of stocks comprising the DJIA was increased to 30, North American was re-added to the list but was replaced by Johns-Manville in 1930.

By 1940, North American was a US$2.3 billion holding company that directly and indirectly ran 80 companies.

It had 10 major direct subsidiaries, in eight of which it owned at least 79%. The 10 included:

• Three major holding companies:^[5]
  • Union Electric Company of St. Louis, Missouri^[6][7]
  • Washington Railway and Electric Company
  • North American Light and Power Company
• Four operating companies:
  • Cleveland Electric Illuminating Company^[8]
  • Pacific Gas and Electric^[9]
  • Detroit Edison Company^[10]
  • Wisconsin Electric Power Company^[11][12]
• And three others:
  • North American Utility Securities Corporation
  • West Kentucky Coal Company
  • 60 Broadway Building Corporation

At various times during its existence, North American also owned substantial interests in these other companies as well:

• The Milwaukee Electric Railway and Light Company: Formed in 1896 as a subsidiary of the North American Company. By 1929, it operated within North American Company along with Wisconsin Electric Power Company, which became the consolidated name of the two operating companies in 1938. It now belongs to Wisconsin Energy Corporation (NYSE: WEC)^[12]
• Capital Transit: Formed on December 1, 1933, in Washington, D.C., from the merger of the Washington Railway and Electric Company and Capital Traction streetcar companies and the Washington Rapid Transit bus company. North American owned it through its WRECo holding company subsidiary, which in turn was the holding company for the merged lines, owning 50% of Capital Transit.^[13]

• Potomac Electric Power Company^[14]
• Cincinnati Gas & Electric Company^[15]
• Union Light, Heat and Power of Covington, Kentucky
• Northern Natural Gas Company
• Butte Electric and Power Company
• Laclede Gas Company^[16][17]
• Edison Securities Corporation
• Wired Radio, Inc. (Muzak)
• North American Edison Company
• St. Louis United Railways Company^[18]

Breakup

The Public Utility Holding Company Act of 1935 passed with the intent of breaking up interstate electric holding companies by limiting company operations to a single state, thus subjecting them to effective state regulation. The North American Company fought the legislation in court, and the company was not broken up by the Securities and Exchange Commission until their loss before the Supreme court in North American Co. v. SEC on April 1, 1946.^[5]

See also

• John I. Beggs (former director)
• Clement Studebaker Jr. (chairman of North American Light and Power Co)

References

1. "Talk of a new company; The report on Oregon and Transcontinental. The present charter declared not adapted to the corporation's successful development". The New York Times. November 23, 1889. p. 3. Retrieved 2008-10-24.
2. "Under a Brand-New Name; But It Is The Oregon And Transcontinental Company. The Very Extensive Powers Given To The North American Company By Its New-Jersey Charter". The New York Times. June 16, 1890. p. 5. Retrieved 2008-10-24.
3. Yablon, Charles M. (2007). "The Historical Race Competition for Corporate Charters and the Rise and Decline of New Jersey: 1880-1910" (PDF). Iowa Journal of Corporation Law. 32 (2). University of Iowa: 339–340. Retrieved July 17, 2012.
4. What happened to the original 12 companies in the DJIA?, djindixes.com Archived 2008-09-19 at the Wayback Machine
5. North American Co. v. Securities and Exchange Commission, 327 U.S. 686 (1946). FindLaw.com
6. Standard & Poor's Stock Guide, formerly NYSE: UEP, now part of Ameren Corp. NYSE: AEE
7. Globe-Democrat, Feb 5, 1905, p 9
8. Standard & Poor's Stock Guide, formerly NYSE: CVX, then merged with Toledo Edison (formerly NYSE: TED) to form holding company Centerior Energy (formerly NYSE: CX), then merged with Ohio Edison Company (formerly NYSE: OEC) to form holding company FirstEnergy Corporation NYSE: FE
9. Standard & Poor's Stock Guide, NYSE: PCG
10. Standard & Poor's Stock Guide, formerly NYSE: DTE, then moved to holding company DTE Energy, same ticker
11. Standard & Poor's Stock Guide, formerly NYSE: WPC, then moved to holding company Wisconsin Energy Corp. (formerly NYSE: WEC), then merged with Northern States Power (formerly NYSE: NSP) to form holding company Primergy Corp.
12. Wisconsin Energy Corporation, History, wisconsinenergy.com
13. March, Charles E. (August 1934). "The Local Transportation Problem in the District of Columbia". The Journal of Land and Public Utilities Economics. 10 (3). University of Wisconsin Press: 275–290. doi:10.2307/3139173. JSTOR 3139173.
14. Standard & Poor's Stock Guide, now a unit of Pepco Holdings NYSE: POM)
15. Standard & Poor's Stock Guide, NYSE: CIN, then moved to holding company Cinergy Corp., same ticker
16. Laclede Gas Company, 1857-2007; Standard & Poor's Stock Guide, (NYSE: LG) became a wholly owned subsidiary of The Laclede Group, Inc., same ticker. Along with North American, the Laclede Gas Light Company was also one of the original 12 stocks in the Dow Industrial Average.
17. Globe-Democrat, Feb 5, 1905, p 9
18. Globe-Democrat, Feb 5, 1905, p 9

External links

• Landis v. North American Co.