Background
Harrison Charles Williams was born on March 16, 1873 in Avon, Ohio, the son of Everett E. Williams, who was in the milling business, and Laurett A. Williams Williams.
Harrison Charles Williams was born on March 16, 1873 in Avon, Ohio, the son of Everett E. Williams, who was in the milling business, and Laurett A. Williams Williams.
He graduated from Elyria High School in 1890.
In 1890 he entered the business world as a bookkeeper. His early ventures included manufacturing bicycles and securing an interest in a tire business. In the late 1890's he moved to Pittsburgh, and later left for New York City. Williams amassed sufficient capital in his early enterprises to invest in the fast-growing electricpower industry.
In 1906 he joined with his brother-in-law, Richard E. Breed, and S. Z. Mitchell, director of the Electric Bond and Share Company, to organize the American Gas and Electric Company from a group of midwestern and southern utility companies. Six years later he created another holding company, Central States Electric Corporation.
With a syndicate Williams purchased 60 percent of the stock of the Cleveland Illuminating Company valued at $5, 724, 000, and transferred it to Central States for $10, 568, 800 in notes and stock.
In 1920 he acquired an interest in the North American Company through leadership in a syndicate that obtained 12. 3 percent of its voting stock from the estate of James Campbell, former North American president.
By 1924 Williams had invested $2, 072, 000 in Central States and owned 96 percent of its stock. Between 1924 and 1929 the stock was split sixtyfold, the value of an original share increased from $10. 50 to $5, 600, and Williams' holdings, although reduced to 90 percent, were valued at $612 million.
Even by the standards of the 1920's, the growth of his interlocking corporate structure was fabulous; the utility empire he dominated rivaled Samuel Insull's in size. As shares in utility companies at the base of his structure rose, the shares in companies above them rose faster. Williams retained control through the subsequently outlawed practice of pyramiding, with his New Empire Corporation as the top holding company and seven other holding companies between that corporation and the operating companies.
His stock in Central States reached a high of $680 million in August 1929, but the market crash diminished his fortune. By 1931 he had sold down to 51 percent his Central States holdings, and their value fell to a low of $5 million in 1934. In 1935 the value rose to $15 million.
He also retained his interest in North American. Williams' life-style was on as grand a scale as his business dealings.
He regularly commuted to his New York City office aboard the Whim III, his custom-built hydroplane. Because of his interest in oceanographic research, Williams aided in financing several expeditions sponsored by the New York Zoological Society and led by William Beebe. Preferring to avoid publicity, Williams dealt through employees and subordinates, and for the most part shunned corporate office.
During the Securities and Exchange Commission investigation of investment trusts in 1937, however, he was called to Washington to testify. He objected to the SEC counsel's assertion that his activities could be described as "controlling" the companies in which he held an interest, but he admitted to "an influence on management" of the North American Company, North American Light and Power, Pacific Gas and Electric, Northern Natural Gas, Detroit Edison, United Light and Power, and American Water Works. The combined assets of the companies involved totalled $2. 875 billion, and the SEC contended that Williams through his investments in the Central States Electric Corporation and the North American Company had gained control over one-sixth of the $15 billion light and power business.
Under the provisions of the Public Utility Holding Company Act of 1935, North American was forced to reorganize its holdings. Williams reduced the combined holdings of all his companies in North American to below 10 percent in order to comply with the terms of the law, thereby setting in motion the first major public-utility holding company financing after the passage and subsequent legal test of the act.
In 1942 the Central States Electric Corporation went into bankruptcy. Williams scaled down his standard of living, reducing his household staff to ten, closing four of his five homes, and selling part of his art collection. Legal struggles marked Williams' later years.
In 1952 Federal Judge Edward Weinfeld handed down a $12 million decision against him in a case that had dragged through the courts since 1945. Trustees Carl J. Austrian and Robert G. Butcher of the Central States Electric Corporation charged that Williams had controlled the board of directors for his own interests and that he had used his influence in a number of transactions between 1927 and 1929 to the detriment of the corporation. Weinfeld cleared Williams and other former Central States officials, including John Foster Dulles, former counsel, of eight of the charges. He, nevertheless, held that Williams' influence, even though he held no office and attended no meetings, was so dominating that all rules of liability applied and, further, that the statute of limitations should not apply where fraud or other harmful acts could not be discovered because of his dominance.
The judgment was one of the largest ever rendered against an individual and involved, in addition to the amount "looted" by Williams, all interest dating back to 1927. Williams appealed the decision and won a reversal on the basis that prosecution was impossible under the statute of limitations. Similar charges were revived and were finally settled in 1959, for $800, 000, against his estate.
He died in Bayville, New York.
In Pittsburgh he married Katharine Gordon Breed on August 4, 1900.
His first wife died in 1915, and on July 2, 1926, he married Mona Strader Schlesinger Bush. Both marriages were childless.