1929: Birmingham grills head of International Paper and Power Company

During an April 29 Joint Rules Committee hearing into the International Paper and Power Company, Rep. Birmingham grilled the president, Archibald R. Graustein, about the company’s control of much of the state’s power assets and the Boston Herald-Advertiser newspapers, the Boston Herald reported (April 30, 1929, p 1, 14, via Geneaology Bank).

Birmingham asked Graustein if he would be willing to allow the legislature to look at the company’s books and records. Graustein answered in the affirmative.
  
Then Birmingham asked him if he expected to make additional acquisition of power operating companies in the state, to which Graustein responded that he did plan to make additional acquisitions.

Birmingham asked Graustein to provide the details of his company’s planned acquisition of the Worcester Electric Light Company. He responded that he had told the committee what he knows and that Frank D. Comerford, president of the company’s subsidiary New England Power Association, could provide additional details.

The House minority leader noted that Graustein’s company acquired some of Worcester’s stock at $185 per share. He asked if the company had arranged to pay for all of the stock at that price. Graustein said that his company arranged to acquire some ownership by the exchange of securities, the value of which was not yet determined by the market.

Birmingham then asked how many shares of the Herald-Traveler the company had purchased. Graustein said it was 50 percent, but declined to disclose the price per share. The representative asked if the purchase price was in excess of the market value, and Graustein adamantly said that it was not.

Birmingham asked Graustein if his company had an interest in buying other newspapers in the state. The president of the company said that he did not plan to buy other newspapers “unless we could buy where the investment was profitable without the newsprint contract and could get that in addition.”

Birmingham asked Graustein if he believed the public was concerned his company would use the Herald-Traveler to elect governors and senators favorable to its interest.

“The Herald and the Traveler have been here for a long time. Their policies are known….And we won’t try to dictate [policies] in the future. It would not be good business. We have a financial investment in the Herald-Traveler. The only way to make money on it is to get circulation and you can’t do that unless you have the confidence of the public. I can’t change your mind, but just watch us. The Herald-Traveler won’t play any part in our business, except as an independent paper,” said Graustein.