Stone & Webster

To the U. S. public was given last week an opportunity to purchase stock in Stone & Webster, Inc., potent builders and operators of U. S. public utilities. To the public went an offering of 400,000 shares of Stone & Webster, Inc., newly organized as a Delaware corporation. To present large stockholders went 175.000 additional shares. Priced at $100, the new stock im mediately sold "when, as and if" above $107. The new financing will create a 100-million-dollar corporation. Control will remain with the founders, Charles Augustus Stone and Edwin Sibley Webster.

Stone & Webster, Inc., has built power stations representing 10% of the total central station capacity of the U. S., supplying 20 million U. S. inhabitants with light and power. It has also built many an office building, factory, hotel, and the present Massachusetts Institute of Technology building in Cambridge. Directorate of the new company will include Joseph P. Grace, Board Chairman of W. R. Grace & Co. ; Albert H. Wiggin, Board Chairman of Chase National Bank; Herbert L. Pratt, Board Chairman of Standard Oil of New York.

In 1884, Charles Augustus Stone and Edwin Sibley Webster entered Massachusetts Institute of Technology. They be came such close friends that even in their college days they were a team called "Stone & Webster." At that time electricity was passing through much the same pio neer period now observable in aviation. Bell had just invented the telephone. The first railway electrification was just completed. So Students Stone & Webster majored in electrical engineering, took degrees in 1888. Then came one year of separation which Mr. Stone spent with Thompson-Houston Co. (forerunner of General Electric) while Mr. Webster entered a bank to get the financial experience for the Stone & Webster company which the young graduates already visualized. In 1889 Partners Stone & Webster each borrowed $2,000 from his father, opened offices in Postoffice Square, Boston. They had one employe, their Tech classmate "Jimmie" Cartwright.

Their first contract came from S. D. Warren & Co., papermakers. It was secured partly through an ingenious stratagem of Employe Cartwright. At that time typewriters were extremely scarce and expensive, far beyond the means of the young firm. Nevertheless, when Paperman Warren came to Stone & Webster to discuss the contract, the click-click-click of a typewriter could be distinctly heard from a back room. "Ah," approved Mr. Warren, "you have one of these new writing machines. That is what I like to see--a modern, progressive spirit." After Mr. Warren had left, the typewriter was discovered to be Mr. Cartwright, industriously clicking a large key in a rusty lock.

The next large Stone & Webster contract was a second job for Paperman Warren, to build a power plant that would carry 1,000 h.p. for seven miles at 1,000 volts. Such a plant seemed then a great project, though since that time Stone & Webster have constructed such power plants as that of Southern California Edison, which carries 250,000 h.p. for 250 miles at 250,000 volts.

Stone & Webster got into utility operating (as distinct from plant construction) indirectly through the panic of 1893. During this panic there was a general collapse in the stocks of public utility companies. Holders of utility stocks were approached by astute J. P. Morgan, who bought the apparently sinking ships for about one-third of their original values.

Then he hired Stone & Webster to look over the properties acquired and report on their position and prospects. When Stone & Webster had completed their survey, Mr. Morgan offered them the Cumberland Light & Power Co. for the bargain price of $60,000. Borrowing the money, the partners bought the company, sold it some years later for $500,000. It was the profit on this operation that established Stone & Webster as a company of national scope.

Charles Augustus Stone lives during the winter on Fifth Avenue, Manhattan; during the summer at Locust Valley, L. I. He is a tall, spare man with hair that has turned almost white except for a black border along the neck. When he speaks of the company's activities, he invariably says, "Mr. Webster and I" or "Stone & Webster," never uses the first person pronoun alone. He likes yachting and tennis, but his chief avocation is breeding horses on his stock farms in Virginia and New Hampshire.

When the present Stone & Webster retire (Mr. Stone is 62, Mr. Webster 61), there will be a junior Stone and a junior Webster to take their places. For among the directors of the new corporation will be Whitney Stone (Harvard, 1930) and Edwin Sibley Webster Jr. (Harvard, 1923) who is also a Stone & Webster Vice President under the new incorporation.