Hopson was born in Fort Atkinson, Wis. , in 1882, the firstborn and only son of the five children of Edgar Delos Hopson and Mary (Colwell) Hopson. His father was a teacher who, on occasion, took financial risks in local businesses. Both parents were Methodists and Republicans, and they raised their children to follow them in both persuasions.
After attending local public schools, Hopson entered the University of Wisconsin in 1901, at the time a center of reformist thought in America. Like many others of his generation, he was drawn to the study of economics and finance under the direction of John R. Commons and Thomas Adams, and he assisted them in editing several works on the subject, while at the same time serving as assistant editor of a Fort Atkinson newspaper, the Jefferson County Union. For a while it appeared Hopson was headed for an academic career, but his work with Commons led him to an interest in law, and in 1904 he began to study law at Wisconsin. With Commons' help, Hopson obtained a position with the Interstate Commerce Commission in 1907, and while in Washington he attended George Washington University, from which he received his law degree in 1908. Continuing his studies at George Washington, he received his M. A. in 1910.
In 1908, he not only was admitted to the bar of the District of Columbia but also joined the newly formed Public Service Commission of New York. In 1913 he was admitted to practice before the United States Supreme Court. In that year, 1913, the Public Service Commission of New York named him head of its Division of Capitalization, which was concerned with the structure of public utilities and their capitalizations. By then, he was considered one of the nation's leading experts in the public utilities area and a conservative: his father's beliefs had vanquished those of John Commons insofar as Hopson was concerned. Hopson left the Public Service Commission in 1915 to open a private practice as consultant to the public utilities industry. Within a short period of time, H. C. Hopson and Co. became a leading advisor not only to utilities, but also to railroads and manufacturing businesses. In 1921, Hopson decided to enter the business world directly, through the acquisition of the Associated Gas and Electric Co. of New York, which at the time was controlled by the J. G. White Management Co. Together with his sisters, Hopson paid $125, 000 for controlling interest; his personal investment in the firm was $12, 500.
Associated Gas and Electric was a minor force in the industry. It was a holding company – that is, a management operation whose assets consisted of shares in operating firms. The Ithaca Gas Light Co. , founded in 1852, was the oldest of these and the direct ancestor. In 1906, Ithaca's directors had formed Associated to acquire control of neighboring utilities, which would then be united to form a single firm that would benefit from centralized management and economies of scale. This was a common development at the time, and when Associated took control of small properties in upper New York state, it was deemed a progressive move, one that would benefit users of gas and electricity through better service at lower prices.
By 1913, Associated had moved into new areas, by acquiring control of electric companies, first in Kentucky, and then in Tennessee. This was done through the purchase of shares, usually from insiders or management. In this way, the parent company could control large utilities through ownership of a relatively small amount of their equity. The operating companies paid dividends to the parent firm, which used the new funds to purchase additional operating units. This, at least, was the situation when Hopson arrived to take command at Associated in 1921. It was a propitious time to enter the field. The use of electricity rose sharply in the 1920's, a time when most of the nation's houses and factories were being converted to electric power. Utility stocks and bonds were among the darlings of Wall Street, where securities prices were also rising because of speculation and as a reflection of economic growth.
Holding companies, like Associated, controlled some 4, 000 operating firms in the nation. Eventually United Corporation, organized by J. P. Morgan and Co. , controlled firms producing 23 percent of the nation's electricity, while the two Insull holding companies held interest in firms producing 11 percent of America's electricity. Hopson's Associated Gas and Electric, with some 9 percent of the total, was the third of the great utilities holding companies. Hopson began acquiring operating companies in 1923 and continued at a rapid rate throughout the rest of the decade. In 1923, also, he obtained control of firms in Massachusetts. In 1924, additional units in New York were acquired, and Associated moved into New Hampshire and Maine. Then, in 1925, Hopson took over firms in Maryland and Pennsylvania, and one in the Philippines. Associated thus had control over some 250 operating firms (although it was later claimed the number was as high as 522) that provided electricity, steam, water, ice, and transportation to some twenty million people in twenty-six states, the Maritime Provinces of Canada, and the Philippines.
Associated's rapid expansion was due in large part to Hopson's ability to raise funds by selling additional securities at a time when the stock markets were eager for such new paper. Later on, a congressional committee tried, without success, to unravel the operations, which it was said only Hopson fully understood. Generally speaking, Hopson sold a new bond or stock issue, and then used the money obtained to purchase control of an operating firm. Then he consolidated its earnings with those of Associated, made it pay a large dividend to the parent firm – which caused the latter's stock price to rise – and repeated the operation. In the same manner, the operating firms acquired additional companies, and some became miniature holding companies in the process. For a time, all went well, and Hopson was deemed a genius. The reason was leverage, which works well in rising markets.
In 1929, Associated showed earnings of $2. 91 a share, and its stock reached a high of 61. Then came the crash. Associated's common earned $0. 30 to 1930 and showed deficits thereafter. Its price fell to 11 7/8 in 1930. The following year, dividends were halted on the common and preferred issues, and Associated began defaulting on its bonds as well. By 1932, the common stock was selling at 1/2. In 1935, Congress passed the Public Utilities Holding Company Act, which forbade operating companies from transmitting earnings to parent firms under certain conditions. This all but shattered what remained of the Hopson empire, and he resigned from the firm soon after. But his problems were not ended. Associated filed for bankruptcy in 1940, and in the investigation that followed dissident stockholders charged Hopson with fraud. He was indicted and, on January 9, 1941, found guilty of defrauding stockholders of $20 million. Hopson was sentenced to five years in prison and later received an additional two-year sentence for income tax evasion. He was released from jail in 1943 and vanished from public view.
Hopson died on December 22, 1949, in Greenwich, Connecticut, after a long illness, and was buried in Mount Auburn Cemetery in Cambridge, Massachussets.
Most accounts of American business manipulation and development in the 1920's mention Howard Hopson only in passing, if at all. Instead, stress is placed on such persons as Samuel Insull, the Van Sweringen brothers, and Ivar Kreuger, who were more glamorous and eccentric than the bland, shy Hopson. If anything, however, Hopson was more inventive than the others, he rose to as great a height of power, and his crash was as resounding as that of any tycoon of the era.
On August 5, 1921, Hopson married Eleanor Evans of Binghamton, N. Y. They had no children.
