Last Bonanza Kings by Ferol Egan

Author:Ferol Egan
Language: eng
Format: epub
ISBN: 9780874178494
Publisher: University of Nevada Press

15

Growing Fortunes

Five years into the new century, Will Bourn could look at his business empire as though he were a successful cash-crop farmer. Instead of producing grain, fruit, or produce to take to market, his specialty lay in growing fortunes. As 1905 moved into the fall season, the Empire Mines and Investment Company showed net profits of well over two million dollars from the last six months of 1900 through most of 1905.1 Although this was a major source of Will's income, it did not include returns from his holdings in Spring Valley Water Company stock or his large portfolio of investments in bonds, stocks, and real estate.

As 1905 neared its end, Will Bourn as president of the San Francisco Gas and Electric Company was about to close a deal to sell this utility company to the California Gas and Electric Corporation, which was planning to merge the two companies to form the Pacific Gas and Electric Company.2 Although Bourn might have considered holding on to his firm or even offering to buy out the California Gas and Electric Corporation, he had become weary of constant attacks by the local newspapers in cartoons and editorials. Not only did such scurrilous attacks offend him, but as a man who never wished to see his name in the newspapers, Will found these ruthless portrayals more than he wished to endure. He dearly loved San Francisco and contributed money and time to its cultural and economic needs, and he was hurt by this constant personal vilification. Consequently, he was receptive to an offer to buy the San Francisco Gas and Electric Company.

Bourn had been approached by Eugene de Sabla and Frank G. Drum of the California Electric Corporation in February 1905 about the possibility of buying his company, but the actual buy-out was delayed until the purchasers could secure enough capital for the transaction. With the incorporation of the Pacific Gas and Electric Company on October 10, 1905, this new firm had a “capital of $20,000,000 in common stock and $10,000,000 in 6 per cent cumulative preferred. Issues of $10,000,000 in 5 per cent collateral trust bonds and $4,500,000 in 6 per cent debentures.” This capital allowed them to buy the California Electric Corporation, but the transaction did not take place until the first week of 1906. Money was available to purchase all the outstanding stock of the San Francisco Gas and Electric Company for $15,848,433.33. In addition to this money, Bourn and the other major stockholders of the San Francisco Gas and Electric Company were to retain the corporations identity for an unspecified time. Meanwhile, the shares of stock in the San Francisco Gas and Electric Company were deposited with the Union Trust Company to serve as security for PG&E's new bond issue. Bourn and the other officers of the San Francisco Gas and Electric Company agreed to this arrangement on the condition that all their stockholders were to receive “$65 per share in PG&E bonds and $25 per share in cash.”3

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