The Electric Bond and Share Company (Ebasco) was organized by General Electric and prior to its breakup was the largest electric power holding company in the United States. It was forced to divest its holding companies and reorganize due to the passage of the Public Utility Holding Company Act of 1935. Ebasco filed suit against the act, claiming it was unconstitutional, but lost. The U.S. Securities and Exchange Commission took twenty-five years of legal action to break up Ebasco and the other major U.S. electric holding companies until they conformed with the 1935 act. It was allowed to retain control of its foreign electric power holding company known as the American & Foreign Power Company (A&FP). After its reorganization, it became an investment company but soon turned into a major designer and engineer of both fossil fuel and nuclear power electric generation facilities. Its involvement in the 1983 financial collapse of the Washington Public Power Supply System's five nuclear reactors led to Ebasco's demise because of the suspension of nuclear power orders and lawsuits that included numerous asbestos claims. The U.S. nuclear industry stopped all construction of new facilities following the 1979 nuclear meltdown at Three Mile Island, going into decline because of radiation safety concerns and major construction cost overruns.
The Electric Bond and Share Group
Teddy Roosevelt's warning
With Morgan's acquisition of General Electric he used his position as the country's most powerful financier to set in motion a plan to monopolize the entire country's electric industry via the Electric Bond and Share Group. Until his death in 1913, Morgan was opposed to any form of government regulation. His firing of Samuel Insull resulted with Insull moving to Chicago, where he organized the second-largest holding company in the country, the Middle West Utilities Company or what is known today as Exelon. Insull would actively promote the idea of a regulated monopoly because of the high cost of electrical infrastructure. About the same time as Teddy Roosevelt's trust-busting campaign against Morgan, Rockefeller and other elites was gaining national attention, the National Civic Federation (NCF) was formed. It carried out extensive investigations and debates among prominent businessmen and organized labour over the issue of public vs. private ownership of electric power. Insull's public support for regulation helped popularize NCF's model legislation that quickly spread nationwide after the state of New York adopted its own variation. Morgan's son J. P. Morgan Jr. carried on with the House of Morgan, including his father's goal of a national electric monopoly but was up against the reformist progressive era.
By 1925, General Electric's Electric Bond & Share Group was the largest owner of U.S. and foreign electric companies holding over 10% of the country's companies as subsidiaries organized into five major holding companies. General Electric made a purely symbolic gesture to reduce growing public anger by divesting control of the company leaving Morgan still in financial control. The Commonwealth and Southern Corporation, known today as the Southern Company, and the reorganized Electric Bond And Share Company (EBASCo) were both parts of J. P Morgan's syndicate via his J.P. Morgan & Co. In 1926, its headquarters in New York City had over 1,000 employees and controlled companies in 33 states worth $1.25 billion.
As public concern continued to mount by ratepayers of private electric power companies, the Federal Trade Commission carried out extensive investigations between 1928 and 1935. The commission's 48,000-page report included entire volumes for each of the country's major utility companies. The FTC valued EBASCo and its five holding companies at $3.5 billion, along with major investments in dozens of other major U.S. companies. Within the five main holding companies were 121 U.S. subsidiaries, along with a foreign holding company that operated in 16 countries and had 70 subsidies.
Because he was a strong proponent of public power, Franklin D. Roosevelt used the collapse of Samuel Insull's Middle West Utilities electric empire in June 1932 as one of his most important election campaign issues. The failed assassination attempt on his life in February 1933 later became part of U.S. Marine Corps General Smedley Butler's claim of a Business Plot against Roosevelt by J. P. Morgan. Franklin's inaugural address contained one of the century's most dramatic speeches where he would proclaim "that the only thing we have to fear is fear itself", but unknown to most Americans the rest of the
The 1933 Pecora Commission hearings identified the National City Company, known today as Citibank, as the location where Morgan conducted EBASCo's investment operations, which played a prominent role in the passage of the Glass–Steagall legislation. The Pecaro investigation along with the findings from the seven-year Federal Trade Commission investigation into electric holding companies nationwide led to the passage of the Public Utility Holding Company Act of 1935. which some historians say was "the fiercest congressional battle in history." Following the act's passage, Ebasco sued the United States government claiming it was unconstitutional, but lost the case before the Supreme Court in 1938. Wendell Willkie, who was the president of one of J.P. Morgan and Ebasco's biggest investments, known as the Southern Company, ran against Franklin D. Roosevelt in the 1940 presidential race but lost.
EBASCo, known on Wall Street as (EBS) was included in the Dow Jones Utility Average from 1938 to 1947.
The complete history of German bond yields, from Napoleon to Angela Merkel
Any given day in the global bond market can be fairly snooze-worthy. Bond yields tick up by a few basis points, and down by a few basis points. Ho-hum. That’s the case today in the market for German government bonds (known as bunds). Yields on the 10-year bund declined by about four basis points, or 0.04 percentage points, to 1.12%. In other words, low.
But in my experience, the best way to make sense of
But there’s more. We grabbed estimates of long-term bund yields from data provider Global Financial Data. With the best numbers we have going back to 1815, these are the lowest German bond yields on record. Pretty remarkable.
Now, it’s best to think of these numbers as a broad estimate of interest rates. The benchmark 10-year bund that hit a low today didn’t exist 200 years ago, not least because Germany as we know it today didn’t exist 200 years ago.
Back in 1815, the dominant power in the confederation of German-speaking states, formed that year after the final defeat of Napoleon Bonaparte at
At any rate, if you’re going to have long-term data series like this in the world of fixed income, a certain amount of stitching and pasting is required.
Also, cutting. You may have noticed the odd gap in the graph around 1920. That’s because I axed the yield data around the hyperinflation of 1922-23, which rendered Germany’s bonds worthless. And it’s not just me. The irreplaceable survey of
The government held yields steady throughout the war years. After the war, yields on West German bonds rose, along with those of most advanced economies (although apples-to-apples comparisons are impossible because of various changes to how the bonds were taxed).
German yields most recently spiked in the 1990s around the time of the reunification. But since then, it’s been pretty much a one-way ride to the record low levels we see today.