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´
So¬na™s acquiring majority control of Gesfurel, see Ranieri, Dannie Heineman,
¨
226; So¬na, Annual Report 1939, 35, has Gesfurel as a company in which
¨
So¬na had an important interest.
66. Feldenkirchen seems to suggest that German expansion in eastern Europe in the
1930s was encouraged by the German government as a means of increasing
exports. Wilfried Feldenkirchen, ˜˜Siemens in Eastern Europe: From the End of
World War I to the End of World War II,™™ in Christopher Kobrak and Per H.
Hansen, eds., European Business, Dictatorship, and Political Risk, 1920“1945
(New York: Berghahn Books, 2004), 125.
67. Ranieri, Dannie Heineman, 187“88, 195“96, 383. On November 23, 1934,
effective as of January 1, 1934, Bewag merged with Berlin City Electric Co.
Oliven was no longer listed as vice chairman. Moody™s Manual (Utilities) 1935,
920. For the incorporation into the Hermann Goring Werke, see Ranieri,
¨
Dannie Heineman, 188. On the Hermann Goring Werke, see Peter Hayes,
¨
Industry and Ideology (Cambridge: Cambridge University Press, 1987), 169,
218; R. J. Overy, ˜˜Goring™s ˜Multi-national Empire,™™™ in Teichova and Cottrell,
¨
eds., International Business, ch. 11; and Ulrich Wengenroth, ˜˜The Rise and Fall
of State-Owned Enterprise in Germany,™™ in Pier Angelo Toninelli, ed., The Rise
and Fall of State-Owned Enterprise in the Western World (Cambridge:
Cambridge University Press, 2000), 116“17 (none of these three say anything
speci¬cally about electric power companies that were brought into the group).
In 1938, no longer protected by his U.S. citizenship, Heineman ¬nally quit as
an administrator of German companies. Ranieri, Dannie Heineman, 195.
However, the So¬na, Annual Report 1939, 35“36, lists both Gesfurel ¨
and Berliner Kraft und Licht (Bewag) AG as among the enterprises in which
So¬na maintained an important participation (the size of which was not
speci¬ed).
68. R. Notel, ˜˜International Credit and Finance,™™ in M. C. Kaser and E. A. Radice,
¨
eds., The Economic History of Eastern Europe, 1919“1975 (Oxford: Oxford
University Press, 1985), II, 284. On Elektrowerte AG, see Bauer, Swiss Bank
Corporation, 162“63, 249, 393. This company was af¬liated with the Swiss
Bank Corporation. In the fall of 1936, Elektrowerte AG merged with the
closely associated Swiss holding company Schweizerische Elektrizitats- und¨
Verkehrsgesellschaft (Suiselectra). Ibid., 277. Schroter, ˜˜Globalization and
¨
Reliability,™™ 119 (Bulgaria).
69. The notion of round-tripping involves a company (or individuals resident) in
country A having an investment in a company in country B, which in turn
Notes to Chapter 5, Pages 203“205
414

reinvests back in country A. We ¬rst encountered the phrase in Andrea
Goldstein, ˜˜Emerging Multinationals,™™ OECD Development Center, unpub-
lished paper 2005, 22, but see also Giorgio Barba Navaretti and Anthony
J. Venables, Multinational Firms in the World Economy (Princeton: Princeton
University Press, 2004), 9n7 (on ˜˜round-trippers™™). The reasons for doing this
were various. AEG™s reasons related to its historical connections, linked with
asset protection. According to Schroter, AEG had by the 1930s totally lost its
¨
in¬‚uence in Elektrobank; some observers had their doubts about this. Schroter¨
is our source for Elektrobank™s pullout from Germany (˜˜because of exchange
dif¬culties.™™). Schroter, ˜˜Globalization and Reliability,™™ 117.
¨
Luciano Segreto, ˜˜Du ˜Made in Germany™ au ˜Made In Switzerland,™ ™™ in
70.
´ ´
M. Trede, ed., Electricite et Electri¬cation dans le Monde 1880“1980 (Paris:
´´ ´
PUF, 1992), 360, for the network of its holdings in 1939.
Luciano Segreto, ˜˜Financing the Electric Industry Worldwide: Strategy and
71.
Structure of the Swiss Electric Holding Companies, 1895“1945,™™ Business
and Economic History, 23 (Fall 1994), 170. This is remarkable when one
realized that in the 1920s Elektrobank had no investments whatsoever in the
United States.
Notel, ˜˜International Credit and Finance,™™ 284.
¨
72.
See Wilkins, History . . . 1914“1945, 373, for Elektrobank™s investments in the
73.
United States in a general context.
Segreto, ˜˜Financing the Electric Industry Worldwide,™™ 168 (Basler Handelsbank,
74.
Swiss Bank Corporation), 170 (geographical distribution Indelec); on the
Luxembourg holdings, see below on SODEC. Notel, who writes on Eastern
¨
European investments, includes nothing on Indelec; on Indelec in the 1930s, see
´
Peter Hertner, ˜˜L™Industrie Electrotechnique Allemande entre les Deux Guerres:
`
A la Recherche d™une Position International Perdue,™™ Relations Internationales,
43 (Autumn 1985), 289“304; Daniel Imwinkelried, ˜˜Die Auswirkungen des
Ersten Weltkrieges auf die Beziehungen der Schweizer Banken zur Deutschen
Industrie: Die Schweizerische Gesellschaft fur Elektrische Industrie (Indelec)
¨
und der Siemens-Konzern,™™ in Sebastien Guex, ed., La Suisse et les Grandes
´
Puissances 1914“1945 (Geneva: Droz, 1999), 324; and Serge Paquier, Histoire
´ ´
de l™Electricite en Suisse (Geneva: Editions Passe Present, 1998), II, 1029“30.
´ ´´
Remarkably, all through the 1930s the Japanese companies kept up payments
75.
on their electric utilities™ borrowings. Thomas Lamont of J. P. Morgan & Co.
had been, as we have seen, very much involved in the ¬nancing of Japanese
utilities (as well as arranging Japanese government loans). Lamont came to be
appalled at the changes taking place in Japan in the 1930s with the rise of
militarism. Wilkins, ˜˜Role of U.S. Business,™™ 353“58.
Franco Amatori, ˜˜Beyond State and Market: Italy™s Futile Search for a Third
76.
Way,™™ in Pier Angelo Toninelli, ed., The Rise and Fall of State-Owned
Enterprise in the Western World (Cambridge: Cambridge University Press,
2000), 129“31, 143.
United States Department of Commerce, Bureau of Foreign and Domestic
77.
Commerce, American Direct Investments in Foreign Countries“1936
(Washington, DC: USGPO, 1938), 11.
Moody™s Manual (Utilities)1938, 961“62.
78.
Notes to Chapter 5, Pages 205“207 415

79. Moody™s Manual (Utilities)1929, 1852“54; ibid., 1930, 1668“76; and ibid.,
1938, 643“46.
80. All this is from Moody™s Manual (Utilities) 1938, 943. The Greek companies
´´ ´
were Galileo, Societe Anonyme Hellenique; Societe Electrique de Volo, and
´´ ´
´´´
Societe Electrique de Mytilene. The Romanian ones were Compania Romana
de Electricitate, Brasov, and Uzina Electrica Brasov, SA. Italo-Belge is not
included on Table 5.1, for its assets in 1937 were less than those of the
companies listed “ that is, less than $10 million.
81. Schroter, ˜˜Globalization and Reliability,™™ 117, which discusses the reduction
¨
of Motor-Columbus™s interests in Germany and Italy. See Chapter 4 on Foreign
Light and Power, Montreal. For the investment portfolio, see Segreto,
˜˜Financing the Electric Industry Worldwide,™™ 170; the Romanian investments
are not included in the investment portfolio tabulation, presumably because the
group made the investments through the Canadian holding company and
Segreto included these as ˜˜Canadian™™ rather than Romanian.
82. Brion, ˜˜Le Role de la So¬na,™™ 224.
ˆ
83. Schroter, ˜˜Globalization and Reliability,™™ 116“17; So¬na, Annual Report,
¨
1936, 32, and ibid., 1938, 25“26; Teresa Tortella, A Guide to Sources of
Information on Foreign Investment in Spain, 1780“1914 (Amsterdam:
International Institute of Social History, 2000) (http://www.ica.org/en/node/
30421, item 53, ˜˜Barcelona Traction Light & Power Co. Ltd.,™™ accessed Sept.
26, 2007); Ranieri, Dannie Heineman, 195.
84. New York Times, Sept. 28, 1940. Closer to the events (at an April 15, 1940
shareholders meeting), Heineman in the So¬na, Annual Report 1939, 24, wrote
of the ˜˜substantial damage™™ in Spain, but that ˜˜two damaged hydro-electric
stations have since been repaired and put in service. Repair work is proceeding
in the steam power-stations, but several generating sets will have to be
replaced.™™
85. On his purchases during the civil war period, see New York Times, Sept. 21,
1949; no interest on these bonds was paid during the civil war years.
86. The reasons for the transfer are given in New York Times, Nov. 22, 1948, Jan.
31, 1949, and Ranieri, Dannie Heineman, 198, which dates the establishment
of SODEC as April 1938; according to So¬na, Annual Report, 1938, 25, and
Moody™s Manual (Utilities) 1939, 615, SODEC was established December 20,
1938, under Luxembourg law, by CHADE. Details of the transaction are given
in ibid., which indicates that the investments obtained from CHADE comprised
substantial holdings of European as well as South American corporations. The
latter included Compan±a Argentina de Electricidad (CADE) and Compan±a de
˜´ ˜´
Electricidad de la Provincia de Buenos Aires. Companies in Europe in which
there were ˜˜participations™™ (a word often used to include af¬liates as well as
parents, often denoting cross-ownership) included the holding companies Sidro,
´
Gesfurel, So¬na, and the operating companies Bewag, Centrales Electriques de
¨
l™Entre-Sambre et Meuse et de la Region de Malmedy (ESMA in Belgium) and
´
Societe des Forces Motrices de Truyere (SFMT in France). SODEC was
´´ `
controlled by CHADE, which in turn was controlled by So¬na. On So¬na™s
important role in ESMA and SFMT, see Ranieri, Dannie Heineman, 136, 139,
191“92. Jose Gomez-Ibanez, Regulating Infrastructure: Monopoly, Contracts,
´´ ´˜
Notes to Chapter 5, Pages 207“208
416

and Discretion (Cambridge, MA Harvard University Press, 2003), 138, points
out that negotiations for the revised 1936 CADE concession had gone from
Buenos Aires to Brussels, bypassing Spain entirely. See So¬na, Annual Report,
1936, 40, for details.

Brion, ˜˜Le Role de la So¬na,™™ 225. Societe Financiere Electrique, Paris, is not
ˆ ´´
87.
included in the key ¬rms listed in So¬na, Annual Report 1939.
On So¬na in the 1930s, see Brion, ˜˜Le Role de la So¬na™™; Schroter,
ˆ ¨
88.
˜˜Globalization and Reliability,™™113; Ranieri, Dannie Heineman, 190“96;
Moody™s Manual (Utilities), various years; ibid., 1940, 617 (for the terms of
the Turkish sale); Wilkins, History . . . 1914“1945, 802; and So¬na, Annual
Report 1939. In Chapter 2, we introduced the iconoclastic notion that a
company could make foreign direct investments, but the targeted company
was not a ˜˜foreign direct investment.™™ So¬na™s investments in Middle West
Corp. seem to be another case in point. So¬na was expanding strategically
into the U.S. public utilities sector; it had a representative on the board of
Middle West Corp.; it included in its 1939 annual report the Middle West
Corp. as one of its key af¬liated companies; and it was making a foreign direct
investment. Yet turning the coin over, it would be hard to call its target,
Middle West Corp., a foreign direct investment. Ibid., 38 (for the inclusion of
Middle West Corp.).
The quotations are from Dannie N. Heineman, ˜˜International Cooperation in
89.
Privately Managed Public Utility Undertakings,™™ address to the annual general
meeting of shareholders of Societe Financiere de Transports et d™Entreprises
´´ `
Industrielles (So¬na), April 28, 1938. For Heineman™s overall optimistic outlook,
see his address to the annual meeting of So¬na in May 1932: ˜˜Let credit be
restored, and with it the capacity to purchase. But how? By enabling lenders
again to feel con¬dent their enterprises will be safeguarded and not frustrated by
the public authorities and that debtors will be neither prevented nor exempted
from faithfully discharging their obligations toward them. And further, by the
conviction, . . . that trade will revive and that a new period of economic
prosperity is about to begin.™™ Reported in New York Times, May 29, 1932.
Although in 1938 Heineman was not predicting a new period of economic
prosperity, he was nonetheless still hoping the trends of the 1930s were
˜˜transitory.™™
Schroter, ˜˜Globalization and Reliability,™™ 113“14. So¬na, Annual Report
¨
90.
1939, 34, lists Electrobel as one of its af¬liated companies.
Schroter, ˜˜Globalization and Reliability,™™ 115; Notel, ˜˜International Credit
¨ ¨
91.
and Finance,™™ 284; New York Times, June 18, 1931, described Hydro¬na as a
˜˜unit™™ of So¬na, but since So¬na and Electrobel were in the 1930s working in
unison, there is probably no inconsistency.
For Empain in France in the 1930s, see Pierre Lanthier, ˜˜Multinationals and the
92.
French Electrical Industry, 1889“1940,™™ in Alice Teichova, Maurice Levy- ´
Leboyer, and Helga Nussbaum, Historical Studies in International Corporate
Business (Cambridge: Cambridge University Press, 1989), 147“48, and Luciano
´ ´
Segreto, ˜˜Le Role du Capital Etranger dans l™Industrie Electrique,™™ in Maurice
ˆ
´
Levy-Leboyer and Henri Morsel, eds., Histoire Generale de l™ Electricite en
´ ´´ ´
France, II (Paris: Fayard, 1994), 1010“12.
Notes to Chapter 5, Pages 209“210 417

93. Odlum was on the board prior to his becoming vice chairman and remained on
the board of American & Foreign Power all during the 1930s, even though he
stepped down as vice chairman. See American & Foreign Power, Annual
Reports.
94. This company is not to be confused with its British namesake; they were
entirely separate. Atlas Corporation was the successor to a small ¬rm that
Odlum and George Howard had formed in 1923. On Odlum and Howard™s
important role in American & Foreign Power in the 1920s (at the same time
they had their own predecessor company to Atlas), see Sidney Alexander
Mitchell, S. Z Mitchell and the Electrical Industry (New York: Farrar, Straus
& Cudahy, 1960), 138.
95. See Hannah, Electricity Before Nationalisation, 231“32; Hannah, ˜˜Commen-
tary,™™ in Teichova and Cottrell, eds., International Business, 194, argued that
the Americans had been draining GLCT, insisting on extremely high dividends
to support UPLC. ˜˜The British directors saw that this was against the British
national interest and, with the support of the Bank of England and City
institutions, they managed to repatriate the capital in order to prevent this
exploitation by the capital-exporting country [the United States].™™ On Atlas,
see Bullock, Story of Investment Companies, 49“56, 159, and ˜˜Odium [sic] in
Action,™™ Time, Aug. 10, 1936 (the amusing misspelling of Odlum™s name
notwithstanding, this is a very valuable article); this article gives the
$25 million ¬gure. Lewis, America™s Stake, 329, gives a ¬gure of about $32 million.
96. Hannah, Electricity Before Nationalisation, 223, 290.
97. Moody™s Manual (Utilities) 1938, 961; interestingly, at least according to
Moody™s, Italian Superpower did not have any shares in SADE, Volpi™s Italian
utility. On Italo-Belge, see material earlier in this chapter. As noted, the Volpi
group represented a cluster of public utility companies and Volpi himself was a
director of So¬na.
98. See Moody™s Manual (Utilities) 1940, 1347, and display advertisement in
Kentville Advertiser, May 9, 1940, by the large Montreal brokerage house
Johnston & Ward, offering shares in Eastern Utilities Ltd. and describing its
properties. It was not clear from Moody™s manual whether there were
Canadian buyers, which seemed likely, but the advertisement con¬rmed this.
The divestments occurred as a major reorganization of UPLC took place in
accord with the U.S. Public Utility Holding Company Act.
99. Wilkins, Maturing of Multinational Enterprise, 178“79 (the quoted passage is
on p. 179).
100. American & Foreign Power, Annual Report 1937, 4.
101. Duncan McDowall, The Light: Brazilian Traction, Light and Power Company
Ltd, 1899“1945 (Toronto: University of Toronto Press, 1988), 340“41.
102. Miguel S. Wionczek, ˜˜Electric Power,™™ in Raymond Vernon, ed., Public Policy
and Private Enterprise in Mexico (Cambridge, MA: Harvard University Press,
1964), 60. After the expropriation of oil, the value of the Mexican currency
plummeted, which affected the operations of Mexlight. So¬na, Annual Report,
1938, 26.
103. Charles Franklin Mallory, ˜˜Financial Problems of the North American Owned
Electric Utilities in Latin America,™™ M.S. thesis, Massachusetts Institute of
Notes to Chapter 5, Pages 211“213
418

Technology, 1956, 35 (on the overall situation). On International Power Co.
Ltd., Montreal, see ibid., 104. On the Chapala company, see Wionczek,
˜˜Electric Power,™™ 70, and Hausman and Neufeld, ˜˜U.S. Foreign Direct
Investment in Electrical Utilities,™™ 382. Morrison-McCall interests acquired
the company in 1926. On Standard Gas & Electric, see Moody™s Manual
(Utilities) 1930, 654; ibid., 1939, 1074; and ibid.,1940, 1006; all through the
1930s, there was mention of Standard Gas™s Mexican properties, but not in
Moody™s Manual (Utilities) 1940. Wionczek, ˜˜Electric Power,™™ 67“68, writes
that Mexlight and American & Foreign Power made no new investments in
1936“1938, brie¬‚y renewed investments in 1939, and then cut back sharply in
1940, when they recognized the thrust of Mexican government policies.
McDowall, Light, 280 (on Miller Lash), 303“41 (conditions in Brazil), 326 (on
104.
the water code); see also Mallory, ˜˜Financial Problems,™™ 86, and Wilkins,
Maturing of Multinational Enterprise, 202. In the Heineman 1938 speech,
cited earlier, when he spoke of the ˜˜tendency amongst some governments to
view with suspicion or even animosity the participation of foreigners in . . . the
management of . . . public utility undertakings,™™ undoubtedly he had Mexico
and Brazil, as well as other countries, in mind. The So¬na/Sidro interests in
Mexico and Spain were listed in So¬na, Annual Report 1929 and ibid., 1939,
so the absence of a listing of Brazilian Traction suggests a less important role
than in the other ventures taken over from Loewenstein™s speculations.
American & Foreign Power, Annual Report 1939, 26; Mallory, ˜˜Financial
105.
Problems,™™ 86 (15 companies).
See map in American & Foreign Power, Annual Report 1939 (Map 5.2
106.
herein).
See Chapter 4 herein and Peter Hertner, ˜˜German Foreign Investment in
107.
Electrical Industry and in Electri¬ed Urban Transport in Italy, Spain and
Argentina Until the End of the 1920s: Some Preliminary Considerations,™™
unpublished paper, 2005 (CHADE was, of course, the old German DUEG).
Ranieri, Dannie Heineman, 142 (the quote from a commemorative brochure),
108.
231 (additions to the Puerto Nuevo power station in 1931 and 1934). Ibid.,
231, and Gomez-Ibanez, Regulating Infrastructure, 137, for CHADE™s
´ ´˜
con¬‚icts with the Buenos Aires city council, 1932“1936, and the threats of
expropriation.
Gomez-Ibanez, Regulating Infrastructure, 138. According to Ranieri, Dannie
´ ´˜
109.
Heineman, 194, 214, Heineman was in Argentina for seven weeks in the
summer of 1936 and again in February and March 1937.
As noted in Chapter 4, in 1929 American & Foreign Power had incorporated
110.
in Argentina ¬ve regional companies and in Florida the Argentine Electric
Companies; by the end of 1930, the latter had brought together eleven
operating subsidiaries in Argentina. Mallory, ˜˜Financial Problems,™™ 85.
American & Foreign Power, Annual Report 1939, 26.
111.
On Anglo-Argentine Tramways Company Ltd. and its parent Companie
112.
Generale de Tramways de Buenos-Ayres, Brussels, see So¬na, Annual Report
´´
1939, 28; see also Ranieri, Dannie Heineman, 64“65, 229“31, for the very
complicated story; this company is mentioned in Chapter 3 herein. On Societe ´´
´ lectricite de Rosario, Brussels, established in 1910, see So¬na, Annual Report
d™E ´
Notes to Chapter 5, Pages 213“214 419

1939, 26; Ranieri, Dannie Heineman, 66“67, 229; and Frederic M. Halsey,
Investments in Latin America and the British West Indies, U.S. Department of
Commerce, Bureau of Foreign and Domestic Commerce, Special Agents Series,
169 (Washington, DC: USGPO, 1918), 69“70 (where the name is rendered
slightly differently). Gomez-Iba ˜ ez, Regulating Infrastructure, 137“38, argues
´ ´n
that like CHADE/CADE, Italo-Argentine Electric Co. was targeted by the
Buenos Aires city authorities from 1932 to 1936 in a way that seemed to be a
harbinger of possible expropriation. Like CHADE/CADE, Italo-Argentine also
got an extended concession in the 1936 negotiations. It was the Buenos Aires
city government that gave the tramway company dif¬culties in the 1930s.
It also had properties in Brazil and Chile. In South America, it had 74,800
113.
customers in 1938 compared with the 1,304,900 customers of American &
Foreign Power. In Argentina, the communities it served were located in the
Provinces of Buenos Aires, Chubut, Cordoba, La Pampa, Neuquen, R±o Negro,
´ ´ ´
San Luis, Santa Fe, and Santiago del Estero. It was not a pro¬table enterprise.
Stone & Webster ran the operations on behalf of the holding company.
Moody™s Manual (Utilities) 1939, 1662.
Andrea Lluch and Laura Sanchez, De Movimiento Popular a Empresa El
´
114.
Cooperativisismo Electrico en La Pampa (Santa Rosa: Fondo Editorial
´
Pampeano, [2001]), 32ff, and Mallory, ˜˜Financial Problems,™™ 85. In 1919,
Buenos Aires had a higher per capita consumption of electricity than Berlin
(155 kWh versus 135 kWh); in 1938, however “ although the per capita
consumption in both cities had grown “ Buenos Aires recorded 380 kWh,
while Berlin had risen to 430 kWh. So¬na, Annual Report 1939, 16.
See Gomez-Ibanez, Regulating Infrastructure, 134, on some of the reasons
´ ´˜
115.
why hydroelectric facilities were so limited in Argentina in the 1930s.
American & Foreign Power, Annual Report 1936; Wilkins, Maturing of
116.
Multinational Enterprise, 202. CHADE had no Chilean investments (see
Chapter 4).
We believe that Paul E. Sigmund, Multinationals in Latin America: The
117.
Politics of Nationalization (Madison: University of Wisconsin Press, 1980),
55, exaggerates when he writes that in 1935 100 percent of the electricity
supplied in Mexico was by foreigners, but we have no doubt that throughout
Latin America the provision of electric light and power was overwhelmingly
by foreign-owned ¬rms.
See Victor Bulmer-Thomas, Economic History of Latin America Since
118.
Independence (Cambridge: Cambridge University Press, 1994), 226“28.
Thomas O™Brien, The Century of U.S. Capitalism in Latin America
119.
(Albuquerque: University of New Mexico Press, 1999), 130. American &
Foreign Power, Annual Report 1940, 6, contains a table showing the declines
of local currencies with the value at the date of major acquisitions, the average
value for 1939 and for 1940. The tale would be depressing to any ¬nancial
analyst.
Marshall, Southard, and Taylor, Canadian-American Industry, 139“52.
120.
Ibid., 141“42.
121.
Ibid., 141“43; Gordon Laxer, Open for Business: The Roots of Foreign
122.
Ownership in Canada (Toronto: Oxford University Press, 1989), 215.
Notes to Chapter 5, Pages 214“216
420

123. Marshall, Southard, and Taylor, Canadian-American Industry, 140.
124. Herbert Holt of Montreal, Light, Heat and Power was ubiquitous in the Latin
American activities of Canadian companies. His name appears in numerous
different contexts. See Christopher Armstrong and H. V. Nelles, Southern
Exposure: Canadian Promoters in Latin America and the Caribbean,
1896“1930 (Toronto: University of Toronto Press, 1988), passim.
125. Marshall, Southard, and Taylor, Canadian-American Industry, 139“40, 152,
215.
126. Ibid., 328, on the divestments from Canadian investments of Public Utilities
Consolidated Corp., which company, however, retained its properties in
Nicaragua (Central American Power) and Honduras (Planta Electrica).
Hausman and Neufeld, ˜˜U.S. Foreign Direct Investment in Electrical Utilities,™™
368.
127. Marshall, Southard, and Taylor, Canadian-American Industry, 44“45.
128. Ibid., 41, 146“47.
129. See Sections 3(a)(5) and 3(b) of the act.
130. Graham Taylor and Peter A. Baskerville, A Concise History of Business in
Canada (Toronto: Oxford University Press, 1994), 271.
131. Marshall, Southard, and Taylor, Canadian-American Industry, 142, 146“47.
132. Laxer, Open for Business, 215.
133. W. J. Reader, Bowater: A History (Cambridge: Cambridge University Press,
1981), 139“55.
´
134. Pierre Lanthier, ˜˜Les Constructions Electriques en France: Le Case de Six
Groupes Industriels Internationaux de 1880 a 1940,™™ Ph.D. diss., 3 vol., Paris:
`
University of Paris X (Nanterre), 1988, on the takeover of certain French
utilities, and Schroter, ˜˜Globalization and Reliability,™™ 113, on So¬na.
¨
135. Moody™s Manual (Utilities) 1940, 617.
136. American & Foreign Power™s investment in the Shanghai International
Settlement was by far the largest in electri¬cation in China and indeed
appears to have been the only one by U.S. direct investors. British resident
investors were present in Hong Kong, with the Hongkong Electric Co. There
does seem to have been nonresident British direct investment in Tientsin
(Tianjin) (the British concession) as well as in smaller installations in Peking
(Beijing), Chingkiang (Zhenjiang), Hankow (Hankou), and Kiangsu (Jiangsu) .
There were French interests in Compagnie Francaise de Tramways et
¸
´ clairage Electrique in the French concession in Shanghai and Belgian
´
d™E
interests in the Tientsin Electric Light and Tramway Co. In addition, there
were Japanese investments in Manchuria (Manchuoko) and power facilities
linked with Japanese cotton mills and mining projects in China. On all of
these, see C. Yun, ˜˜A Statistical Investigation of Electric Power Plants in China
1932,™™ Transactions of the World Power Conference, Sectional Meeting,
Stockholm, 1933 (Stockholm: Svenska Nationalkommitten for Varldskraft-
´
konferenser, 1934), II, 532, and C. F. Remer, Foreign Investments in China
(New York: Macmillan, 1933), 399.
137. American & Foreign Power, Annual Report 1937, 3“5. Before the start of
hostilities, in Shanghai the peak demand load had been as high as roughly
156,000 kW. After hostilities, it dropped to 22,000 kW.
Notes to Chapter 5, Pages 216“221 421

138. American & Foreign Power, Annual Report 1939, 6; this report was dated
April 29, 1940.
139. Data from David Merrett.
140. Mallory, ˜˜Financial Problems,™™ 98.
141. We infer this from a careful evaluation by the accounting ¬rm Deloitte™s of
Whitehall Securities and Whitehall Electric, as of October 3, 1933 (material
dated March 16, 1936), juxtaposed with a directory type listing in 1950, along
with other data. PEA/COWD 5/11 and PEA/COWD 2/2, S. Pearson & Son
Papers, Science Museum, London.
142. On these connections, see Chapter 4, Davenport-Hines, Dudley Docker, and
Moody™s Manual (Utilities) 1938, 921, which indicates that McKenna,
Wyldbore-Smith, and Docker™s son, Bernard, served on the So¬na board.
143. Interestingly, among the French directors of So¬na was Andre Meyer of ´
Lazard Frere et Cie., Paris. But Robert Kindersley of Lazard Brothers, London,
`
was not on the So¬na board; indeed, Kindersley™s closest associations were
with the British Pearson group.
144. New York Times, Feb. 2, 1962. In this obituary for Heineman, the New York
Times gives the employment as that just before the Second World War. Other
sources say So¬na employed 40,000 individuals ˜˜at the time of Heineman™s
retirement™™ (1955). Hans-Peter Schwarz, Konrad Adenauer, 1 (Providence, RI:
Berghahn Books, 1995). We think the 1939 date is more realistic. American &
Foreign Power, Annual Report 1939, 4 (employment).
145. American & Foreign Power, Annual Report 1929, 13; Wilkins, Maturing of
Multinational Enterprise, 134.
146. And even this would be inadequate, for it would not cover a number of
important foreign direct investments, including those in copper-mining
operations in Chile (where there was important electric power supplied) and
the investments in Peru by W. R. Grace & Co., International Petroleum
Company, and the Cerro de Pasco Mining Co., for example, where company
towns had been electri¬ed. So, too, United Fruit™s operations throughout the
Caribbean had electric power provided. While Motor-Columbus had invest-
ments in Lima Light, Power & Tramways Co., there were also important
British stakes in this company. In March 1934, Lima Light had sold its
tramway concessions to the state-owned company Compan±a Nacional de
˜´
Tranvias SA, and in 1935 its English name was changed from Lima Light,
Power & Tramways Co. to Lima Light & Power (in Peru, the company was
called Empresas Electricas Asociadas). See Rory Miller, ˜˜British Free-Standing
´
Companies on the West Coast of South America,™™ in Mira Wilkins and Harm
Schroter, eds. The Free-Standing Company in the World Economy (Oxford:
¨
Oxford University Press, 1998), 222, and Moody™s Manual (Utilities) 1938,
898. It is doubtful that Brazilian Traction was included in the list of companies
in which So¬na had its ˜˜principal interests.™™ See discussion above.
147. The tranche in So¬na is based on secondary sources; we can ¬nd nothing to
verify this in the late 1930s annual reports of American & Foreign Power. A
statement “ under the heading ˜˜plant™™ “ in the 1936 annual report of
American & Foreign Power, reads: ˜˜In 1936, the Company disposed of for
cash its investment in Societe Financiere Electrique, an investment trust
´´
Notes to Chapter 5, Pages 222“224
422

controlling utility properties operating in France. The remaining investment of
the Company in Europe aggregates $715,878, which is in companies operating
in Italy.™™ American & Foreign Power, Annual Report 1936, 4. (In 1936, So¬na
´
also sharply reduced its holdings in Societe Financiere Electrique, Paris
´´ `
(Finelec), as noted earlier in this chapter.) The companies operating in Italy
were undoubtedly networked with Volpi™s grouping; and Volpi was a director
of So¬na. It is possible that American & Foreign Power might have retained
some interests in the Edison Company, Milan.
The Fair ran from April 30, 1939, to Oct. 26, 1940. The exhibitors of these
148.
˜˜marvels™™ were U.S. manufacturers: TVs, Radio Corporation of America;
Dishwashers, Westinghouse; Air conditioners, Carrier Corporation. See also
So¬na™s Annual Report 1939, 18“22, which devoted space to product usage
and the applications of electricity over the prior two decades, as well as the
prospects for the future.
Hughes, Networks of Power, 401.
149.
So¬na, Annual Report 1939, 16 (remarkable growth), 14“22 (documentation);
150.
American & Foreign Power, Annual Report 1929, 15; American & Foreign
Power, Annual Report 1939, 27 (communities and customers).
American & Foreign Power, Annual Report 1929, 17; American & Foreign
151.
Power, Annual Report 1939, 27. So¬na, Annual Report 1939, 22 (increase in
electricity output and customers of ˜˜companies in which we have our principal
interests™™).
Ranieri, Dannie Heineman, 207 (Aug. 1939 transfer to Lisbon). The top
152.
management (including Heineman) did not ¬‚ee Belgium until after the
Germans moved in. The group assembled in Portugal in June 1940. It included
Aloys van de Vyvere (1871“1961), president of So¬na (Van de Vyvere had
replaced Maurice Despret as So¬na™s president in 1934). Ibid., 208“9, provides
a list of the key Belgians who went to Lisbon. On the So¬na move to Lisbon
and New York, see also the letter from the German Military Commander in
Belgium and Northern France to Karl Rasche (Dresdner Bank), Feb. 3, 1941,
Record Group 238, Micro¬lm T301, Reel 51, NI 6695 (Occupation Records
for the Nuremberg Trial“Nazi Industrialists). The New York Times, Sept. 28,
1940, had comments from Heineman that after the German invasion of
Belgium, So¬na had moved its of¬ces to France and then to Lisbon. See
Wilkins, History . . . 1914“1945, 452“54, 475 (on freezing of Belgian assets in
the United States and So¬na). So¬na, Annual Report 1939, 38 (on So¬na™s
interests in Middle West Corporation).
Ranieri, Dannie Heineman, 207“11; Wilkins, History . . . 1914“1945,
153.
452“55 (blocked funds and activities of Foreign Funds Control), 461“70
(experiences of German ¬rms in the United States; fears about disguises,
cloaking), 473“81 (Belgian, Dutch, French, Swedish, and Swiss ¬rms in the
´
United States). Banque Belge pour l™Etranger (controlled by Societe Generale
´´ ´ ´
de Belgique, Brussels) had long been established in New York (since 1921, it
had had a New York agency, set up through London). On its experiences, see
Ibid., 475.
New York Times, Oct. 31, 1941. Wilmers (who became increasingly important
154.
in So¬na) was a young Englishmen, with a Cambridge degree in modern
Notes to Chapter 5, Pages 224“226 423

languages. He would be a signi¬cant ¬gure in So¬na in the 1940s and 1950s. On
Wilmers, see John Brooks, ˜˜Annals of Finance,™™ New Yorker, May 21 and May
28, 1979, and Ranieri, Dannie Heineman, 212. It seems likely that earlier So¬na
may have had a larger interest in Middle West Corp., which it divested (and
bought other American securities or put these securities in a ˜˜shelter™™ company)
so as to stay under the SEC trigger point. So¬na included Middle West Corp.
among its important interests in its annual report of 1939. So¬na, Annual
Report 1939, 38.
New York Times, Oct. 31, 1941; the New York Times reporter indicated that
155.
he did not know whether the October 15 ˜˜reported ban™™ had been lifted by the
Treasury Department. See Wilkins, History . . . 1914“1945, 452“55 (on the
freezes and the July 17, 1941, blacklist and its enlargement). Ranieri, Dannie
Heineman, 212“13, on the national security issues and the outcome of the
investigations.
Ranieri, Dannie Heineman, 213; it also set up Sovalles, Inc., another
156.
Panamanian company, to hold stock in CHADE (see below). On the use of
Panamanian intermediaries during wartime by European ¬rms, see Wilkins,
The History . . . 1914“1945, 468, 476, 481, 841, 845n216.
McDowall, Light, 347“48.
157.
Wilkins, History . . . 1914“1945, 425, 430, 475, 477“78, 842n187. The Swiss
158.
Bank Corporation™s principal ties in the electric power industry were with
Motor-Columbus and Indelec. See Segreto, ˜˜Financing the Electric Industry
Worldwide,™™ 168. Note that foreign banks were not permitted, under New
York state law, to have branches in New York prior to 1961; instead, they set
up New York ˜˜agencies.™™ In addition, as in the Credit Suisse case, they might
set up ¬nance subsidiaries.
For the freezing of assets, see Wilkins, History . . . 1914“1945, ch. 8, esp. 453,
159.
for the sequencing.
One might wonder that So¬na, with its Jewish chief executive, was under
160.
scrutiny. But this was not exceptional. The prominent French Jewish Louis-
Dreyfus family was also seen as ˜˜endeavoring to get credits placed at the
disposal of Germany.™™ See material from the British Foreign Of¬ce, Oct. 1,
1940, quoted in Wilkins, History . . . 1914“1945, 844n204.
As noted above, McDowall, Light, 348, says that the trade through
161.
Switzerland and Italy was done with the awareness of prominent individuals
in London. Wilkins™s research indicates that there were other cases “ see the
SKF story “ where British of¬cials turned a blind eye to trading with the
enemy. Wilkins, History . . . 1914“1945, 530“33. Heineman™s political con-
tacts in London would also serve him well.
˜˜Fuerzas Motrices del Valle de Lecrin,™™ typescript history in Box B11,
162.
S. Pearson & Son Papers. See also Luis Fernandez-Revuelta, Donato Gomez,
´ ´
and Keith Robson, ˜˜Fuerzas Motrices del Valle de Lecr±n, 1936“9,™™ ´
Accounting, Business and Financial History, 12:2 (July 2002), 347“66, for
the company™s experience during the civil war. Neither the typescript history
nor the last cited article indicated the buyer of the company and its assets.
Gabriel Tortella, The Development of Modern Spain (Cambridge, MA:
163.
Harvard University Press, 2000), 300, 317“18; Fuerzas would come to be
Notes to Chapter 5, Pages 226“229
424

owned by ENDESA, see Fernandez-Revuelta, Gomez, and Robson, ˜˜Fuerzas
´ ´
Motrices del Valle de Lecr±n, 1936“9,™™ 348.
´
Alan S. Milward, War, Economy and Society, 1939“1945 (Berkeley:
164.
University of California Press, 1979), 166 (Oriental Development and its
Korean subsidiary).
William W. Lockwood, The Economic Development of Japan (Princeton:
165.
Princeton University Press, 1954), 126. Lockwood writes that all of Japan™s
11,500 towns and villages (except for 199 small hamlets in remote parts of the
country) had access to electricity by the end of the 1930s.
Vitalis, for example, documents a highly political story of ˜˜contesting national
166.
[foreign] interests™™ in the development of energy-intensive fertilizers in Egypt.
Vitalis, When Capitalists Collide, 112“19.
On the switch from Sodec to CHADE (and the dissolution of Sodec), as well as
167.
the role of Sovalles, Inc., see So¬na, Annual Report, 1940“1945, 23, and New
York Times, Sept. 16, 1947.
Ranieri, Dannie Heineman, 214“15 (on Heineman™s trip to Argentina in
168.
1942), Simon G. Hanson, Economic Development in Latin America
(Washington, DC: Inter-American Affairs Press, 1951), 306“7. American &
Foreign Power, ˜˜The Foreign Power System,™™ booklet (New York: American
& Foreign Power Co., 1953), 10; Bulmer-Thomas, Economic History of Latin
America, 246; O™Brien, Century of U.S. Capitalism, 131, writes that in 1943
American & Foreign Power had two of its subsidiaries in Argentina
expropriated; then in 1945, the Argentine government expropriated its
properties in ¬ve provincial cities.
New York Times, Sept. 16, 1947.
169.
Ibid. Heineman traveled to Lisbon in September 1943 to meet with executives
170.
of CHADE on the problems in Argentina; in 1944, he was in Spain, discussing
the problems. Ranieri, Dannie Heineman, 216“17.
David F. Cavers and James R. Nelson, Electric Power Regulation in Latin
171.
America (Baltimore: Johns Hopkins University Press, 1959), 16; this ¬rm had
the same name as its Spanish counterpart and was established the same year.
The ¬rms were unrelated.
American & Foreign Power, ˜˜Foreign Power System,™™ 10, 22.
172.
For American & Foreign Power during most of the 1930s, it had been the
173.
other way around. Remittances from Latin America had been low because of
exchange blockages, and for a number of years Shanghai Power™s revenues had
assisted in compensating for those low returns.
American & Foreign Power, ˜˜The Foreign Power System,™™ 22, 26.
174.
Harold James, International Monetary Cooperation Since Bretton Woods
175.
(New York: Oxford University Press, 1996), 18. The quoted passage was
James™s statement; we are attributing it to the 1944 planners.
For example, during the war years in Egypt, British policy makers tried to
176.
control the involvements of U.S. direct investors in the Egyptian industrial
sector, fearing that Egypt might begin direct negotiations with Americans. The
British government tried to support British trade over American trade, and this
affected policies toward the Aswan Dam. Vitalis, When Capitalists Collide,
130, 134.
Notes to Chapter 6, Pages 233“235 425

6 summary of the domestication pattern to 1978
1. Articles of Agreement for the International Monetary Fund and the World Bank
had been drawn up in July 1944 at Bretton Woods. They became effective in
December 1945 when in Washington, DC, twenty-eight governments endorsed
the articles. The ¬rst explicit loans for electri¬cation by the World Bank were
made to the Chilean government-owned utilities Fomento and Endesa in March
1948. See historical chronology on the World Bank website (http://www.
worldbank.org/, accessed July 3, 2006).
2. The word comes from Herbert Bratter, ˜˜Latin American Utilities™ Nationalization
Proceeds Inexorably,™™ Public Utilities Fortnightly, 66 (July 7, 1960), 1“15. This
was true not only in Latin America and not only for American & Foreign Power.
3. In the United States in 1950, investor-owned utilities produced 80 percent of net
electricity generation by electric utilities. This percentage had fallen slightly to
77 percent by 1970. United States Bureau of the Census, Historical Statistics of
the United States: Colonial Times to 1970, 2 vol. (Washington, DC: USGPO,
1975), II, 821.
4. Ulrich Wengenroth, ˜˜The Rise and Fall of State-Owned Enterprise in
Germany,™™ in Pier Angelo Toninelli, ed., The Rise and Fall of State-Owned
Enterprise in the Western World (Cambridge: Cambridge University Press,
2000), 121. Bewag, discussed in Chapter 5, did not return to the So¬na fold
after the war; its main power stations were in East Berlin, and its activities in a
divided Berlin were fraught with dif¬culties. Liane Ranieri, Dannie Heineman
´
(Brussels: Editions Racine, 2005), 225.
5. Mira Wilkins, The Maturing of Multinational Enterprise: American Business
Abroad from 1914 to 1970 (Cambridge, MA: Harvard University Press, 1974),
302.
6. Duncan McDowall, The Light: Brazilian Traction, Light and Power Company
Ltd, 1899“1945 (Toronto: University of Toronto Press, 1988), 341.
7. Charles F. Mallory, ˜˜Financial Problems of the North American Electrical
Utilities in Latin America,™™ M.S. thesis, Massachusetts Institute of Technology,
´
1956, 34. He explains that in 1924 the Societe Internationale d™Energie Hydro-
´´
´
Electrique SA (Sidro) had begun purchasing securities of the Mexican Light and
Power Group and soon achieved voting control. So¬na (Societe Financiere de
´´ `
Transports et d™Entreprises Industrielles) held important interests in Sidro and as
of November 15, 1949, the ˜˜So¬na group™™ held 50.7 percent of the voting
interest in the Mexican Light and Power Ltd. Ibid., 34n5. A reorganization
occurred in 1950, after which ˜˜this Belgian group™s voting interest dropped to
36.4 percent.™™ His source was a Mexican Light & Power Co. circular from
1949. Mallory, ˜˜Financial Problems,™™ 34n5.
8. For Mexlight in these years, see Ranieri, Dannie Heineman, 234“38.
9. See European Association for Banking History, Handbook on the History of
European Banks (Aldershot, England: Edward Elgar, 1994), 1016, 1090. Ibid.,
1092, gives its 1989 place in the Credit Suisse group. In the 1990s, Electrowatt
(the 1974 successor to Electro-Watt) was described as a holding company in
electric power, engineering, and contracting. In 1998, Siemens completed the
acquisition from Credit Suisse of the ˜˜industrial part of Electrowatt, AG.™™
Notes to Chapter 6, Pages 235“236
426

See Siemens™s webpage (http://w4.siemens.de/archiv/en/index.html, accessed
Sept. 26, 2007), and Wilfried Feldenkirchen, Siemens: From Workshop to
Global Player (Munich: Piper, 2000), 394. For more on the postwar relations
between Credit Suisse and Elektro-Watt and its successor Electrowatt, see
Joseph Jung, From Schweizerische Kreditanstalt to Credit Suisse Group
(Zurich: NZZ Verlag, 2000), 61, 94, 105“6. See also A. Steigenmeier, Power
on. Elektrowatt 1895“1995 (Zurich: Elecktrowatt, AG, 1995).
During the war years (in 1942), AEG had absorbed Gesellschaft fur Elektrische
¨
10.
Unternehmungen (Gesfurel), its related holding company in which So¬na had
¨
an important stake. After the war, So¬na received certain compensation for its
investment in Gesfurel (and possibly for its investment in Bewag as well).
¨
Ranieri, Dannie Heineman, 226. AEG came out of World War II, revived its
manufacturing, and expanded greatly in the 1950s and 1960s within Germany,
only to be an ailing company by the end of the 1960s. It would be absorbed into
Daimler-Benz in the mid-1980s and subsequently disappear as an independent
business enterprise.
Handbook on the History of European Banks, 1016, and Hans Bauer, Swiss
11.
Bank Corporation (Basel: Swiss Bank Corporation, 1972), 309“10.
In Moody™s Manual (Bank and Finance)1978, 1707, ˜˜Indelec Swiss Co. for
12.
Electric Industry, Basel,™™ and ˜˜Indelec Finance SA, Basel,™™ are listed as
subsidiaries of Swiss Bank Corporation. In the 1930s, SBC had already been
involved with Indelec. See Chapter 5, herein. But its post“World War II
relationships with Indelec derived from the Basler Handelsbank heritage.
Bauer, Swiss Bank Corporation, 392“93.
Employment ¬gures for Motor-Columbus are in Moody™s Manual (Utilities)
13.
1971, 2075; these ¬gures do not include the ˜˜group™™ companies in which
Motor-Columbus (and Schweizerisch-Americanische Elektrizitat-Gesellschaft)
¨
and Brown, Boveri had investments. In 1970, Compan±a Italo-Argentina de
˜´
Electricidad had 4,588 employees, while Lima Light & Power had 2,111
employees. Moody™s Manual (Utilities) 1971, 2075, 2076, 2068. See Chapter 7
on Brown, Boveri™s 1988 successor ABB ASEA Brown Boveri and on the
subsequent history of Motor-Columbus.
On Heineman™s role, 1945“1962, see Ranieri, Dannie Heineman, 220“95. In
14.
1955, So¬na had 40 percent of its portfolio in U.S. securities. Ibid., 274.
Hugh Bullock, The Story of Investment Companies (New York: Columbia
15.
University Press, 1959), 1.
Charles Wilmer, who followed Heineman in the leadership of So¬na, had a
16.
modern-language degree; his successor was a banker. On the plans of Societe ´´
Generale de Belgique, see Wall Street Journal, Nov. 27, 1964. The group
´´
headed by Societe Generale de Belgique in this planned takeover included
´´ ´ ´
Medio Banca of Milan; the Luxemburg company Omnilux; the Boel group (an
important Belgian family); Lazard Freres & Cie., Paris; and the Pearson group
`
of London. The Wall Street Journal article indicated that about 38 percent of
So¬na™s holdings were in American securities, including large positions in
Florida Power & Light, Middle South Utilities, and Oklahoma Gas & Electric
Co.; these and others were clearly portfolio investments (note that this was
down from the 40 percent in 1955, cited in a note above). By 1972, the value of
Notes to Chapter 6, Pages 236“238 427

So¬na™s electrical holdings was only 20 percent of its portfolio. Ranieri, Dannie
Heineman, 295. The Boel family group was by then playing a key role in So¬na.
Ibid.
In 1968, there would be a merger between Construction des Batignolles
17.
(Schneider) and Empain™s principal holding company, Societe Parisienne pour
´´
´ lectriques (SPIE), into a new company called Spie Batignolles. In
l™Industrie E
1981, Empain would split from what had come to be called the Empain-
Schneider Group. For the complicated relations, see the websites for Schneider
Electric (http://www.creusot.net/creusot/histoire/schneider/schneider.htm) and
Areva (Jeumont) (http://www.jeumont-framatome.com/english/html/homepage)
(both accessed March 7, 2006).
Emmanuel Chadeau, ˜˜The Rise and Decline of State-Owned Industry in
18.
Twentieth-Century France, in Toninelli, ed., Rise and Fall of State-Owned
Enterprise, 189.
Marc Perrenoud, ˜˜La Diplomatie Suisse et les Relations Financieres avec la
`
19.
France 1936“1945,™™ in Sebastien Guex, ed., La Suisse et les Grandes
´
Puissances 1914“1945 (Geneva: Droz, 1999), 409, 409n84.
The Belgian ¬rms appear to have had larger investments in France at the
20.
beginning of the 1930s than at the end. We noted in Chapter 5, for example,
´
So¬na™s reduction of its investments in Societe Financiere Electrique, Paris
´´ `
(Finelec), which in turn had investments in operating utilities in France. But
So¬na retained interests in Societe des Forces Motrices de Truyere, Compagnie
´´ `
´ ´ ´
Centrale d™Energie Electrique, Compagnie Electrique de la Loire et du Centre,
´ ´
and Energie Electrique du Nord de la France. For these companies and the
postwar indemni¬cation, see Ranieri, Dannie Heineman, 227“28. See ibid,
228n6 for the indemni¬cation of Empain and Electrobel.
Wilkins, Maturing of Multinational Enterprise, 302.
21.
Peter Eigner, ˜˜The Ownership of Austria™s Big Business, 1895“1995,™™ in
22.
Margarita Dritsas and Terry Gourvish, eds., European Enterprise (Athens:
Trochalia Publications, 1997), 57.
Based on discussions with Luciano Segreto; see also Franco Amatori, ˜˜Beyond
23.
State and Market: Italy™s Futile Search for a Third Way,™™ in Toninelli, ed., Rise
and Fall of State-Owned Enterprise, 132, for the 1962 foundation of Ente
Nazionale per l™Energia Elettrica (ENEL) or, in English, the National Agency
for Electric Power, which was to ˜˜monopolize the production and distribution
of electric power in Italy.™™
See New York Times, Sept. 16, 1947 (on the ownership).
24.
Ibid., Sept. 16, 1947, and Jan. 31, 1949.
25.
See ibid., Sept. 21, 1949, and March 19, 1962; Albert Carreras, Xavier
26.
Tafunnell, and Eugenio Torres, ˜˜Against Integration: The Rise and Decline
of Spanish State-Owned Firms and the Decline and Rise of Multinationals,
1939“1990,™™ in Ulf Olsson, ed., Business and European Integration Since 1800
(Gothenburg, Sweden: Graphic Systems, 1997), 46; and Gabriel Tortella,
The Development of Modern Spain (Cambridge, MA: Harvard University
Press, 2000), 352. See also John Brooks, ˜˜Annals of Finance,™™ New Yorker,
May 21, 1979, and May 28, 1979. The bankruptcy was seen by So¬na and
others as invalid, for there were abundant assets and the problem was Spanish
Notes to Chapter 6, Pages 239“240
428

government restrictions on remittances, so foreign obligations could not
be met.
The U.S. view re¬‚ected Heineman™s opinions. Heineman, a U.S. citizen, after
27.
the war decided he wanted to reside in the United States. He had friends in
Washington, DC, who pushed So¬na interests (albeit not as strongly as
Heineman would have liked). On the so-called Barcelona Traction affair and
March, see Ranieri, Dannie Heineman, 255“72.
New York Times, March 19, 1962; Tortella, Development of Modern Spain, 352.
28.
For the entire extraordinary story, see John Brooks, ˜˜Annals of Finance,™™ New
29.
Yorker, May 21, 1979 and May 28, 1979, and Herbert W. Briggs, ˜˜Barcelona
Traction: The Jus Standi of Belgium,™™ American Journal of International Law,
65:2 (April 1971), 327“45. Brooks describes March as unscrupulous. By
contrast, Briggs, who counseled the Spanish government in the preparation of
its pleadings in this case over a period of seven years (1963 to 1969), found the
judgment of the court ˜˜soundly reasoned.™™ By the time of the decision, March
was dead of a car accident in 1966 at the age of 81, as was Heineman, who died
at age 84 in 1962.
Moody™s Manual (Utilities) 1980 (each annual issue of Moody™s Manual
30.
(Utilities) contained unnumbered pages with lists of companies formerly
included and the last issue in which they were listed; there followed a brief
explanation of the reason for dropping the company).
Wilkins, Maturing of Multinational Enterprise, 302; American & Foreign
31.
Power Co., ˜˜The Foreign Power System™™ booklet (New York: American &
Foreign Power Co., 1953), 10.
Robert L. Tignor, Egyptian Textiles and British Capital 1930“1956 (Cairo:
32.
American University in Cairo Press, 1989), 100.
´
Celine Boileau, ˜˜La Production Electrique Destinee a l™Industrie Miniere en
´ ´` `
33.
Afrique du Sud (1880“1922),™™ in Dominique Barjot, Daniel Lefeuvre, Arnaud
´
Berthonnet, and Sophie Coeure, eds., L™Electri¬cation Outre-mer de la Fin du
´
XIXe Siecle aux Premiere Decolonisations (Paris: EDF, 2002), 476. In 1948,
` ` ´
when this takeover occurred, South African mining interests had large stakes in
Victoria Falls and Transvaal Power Co., as they had for years. It could be
argued that ˜˜domestication™™ had occurred earlier, for the mining interests were
˜˜South African™™ and not really ˜˜U.K. foreign direct investments.™™ Because
these companies in 1948 still had ˜˜headquarters™™ in London, we have counted
this as foreign direct investment.
http://www.winne.com/algena3/to12frinter.html, accessed Dec.19, 2005. Ranieri
34.
writes that two companies in which So¬na had interests were nationalized in
1950 under Algerian law. Ranieri, Dannie Heineman, 228. While she does not
´
specify, these were probably Societe Algerienne d™Eclairage et de Force, Algiers,
´´ ´
and Societe des Forces Motrices d™Algerie, Algiers.
´´ ´
Based on discussion with and data supplied by David Merrett.
35.
Wilkins, Maturing of Multinational Enterprise, 302.
36.
On the tramway and Rosario companies, see Ranieri, Dannie Heineman,
37.
229“30.
Jose Gomez-Ibanez, Regulating Infrastructure: Monopoly, Contracts, and
´ ´ ´˜
38.
Discretion (Cambridge, MA: Harvard University Press, 2003), 139. On
Notes to Chapter 6, Pages 240“246 429

Heineman™s frustrations over what was happening in Argentina, see Ranieri,
Dannie Heineman, 232“33. Heineman retired in 1955, and after his retirement
the new directors of So¬na preferred to disengage from the Argentine business.
New York Times, Sept. 16, 1947; American & Foreign Power, Annual Report
39.
1952, 4, 16.
American & Foreign Power, Annual Report 1954, 21“22.
40.
The quotations are in American & Foreign Power, Annual Report 1955, 17“18.
41.
On the ANSEC group of companies, see notes to Chapter 4.
American & Foreign Power, Annual Report 1952, 19.
42.
Ibid.
43.
Ibid., 5.
44.
Ibid.
45.
David F. Cavers and James R. Nelson, Electric Power Regulation in Latin
46.
America (Baltimore: Johns Hopkins University Press, 1959), 16.
Ibid., 16“17.
47.
Ibid., 16“19.
48.
American & Foreign Power Co., ˜˜Foreign Power System,™™ 32.
49.
Ibid.
50.
Ibid., 34.
51.
Robert L. Tignor, Capitalism and Nationalism at the End of Empire: State and
52.
Business in Decolonizing Egypt, Nigeria, and Kenya, 1945“1963 (Princeton:
Princeton University Press, 1998), 104“10 (on the Aswan Dam affair); on
Hoctief history see Marc Linder, Projecting Capitalism: A History of the
Internationalization of the Construction Industry (Westport, Conn.: Greenwood
Press, 1994), 87, 89“90, 137, 140, 201, 204, 211, 220; on the 1920s“1930s
unrealized plans for the Aswan dam, the wartime experiences, and the period
after 1945, see the well-told narrative in Robert Vitalis, When Capitalists
Collide: Business Con¬‚ict and the End of Empire in Egypt (Berkeley: University
of California Press, 1995), 56, 63“103, 105“135, 144“168.
Vitalis, When Capitalists Collide, 142, 145, 148“150.
53.
Tignor, Capitalism and Nationalism,108“153 on the events of 1956“1957.
54.
The statistics in ibid., 143, suggest some French investments in utilities.
55.
Ibid., 154, and e-mail Robert Tignor to Mira Wilkins, March 2, 2006, which
56.
indicated that Lebon & Co. involved Belgian capital and was nationalized in
this wave of nationalizations. Nasser™s expropriations, 1956“1967, involved
seven separate acts and seventy ¬rms. See Charles R. Kennedy, Jr., ˜˜Relations
Between Transnational Corporations and Governments of Host Countries,™™
Transnational Corporations, 1:1 (Feb. 1992), 73.
Kennedy, ˜˜Relations Between Transnational Corporations and Governments of
57.
Host Countries,™™ 73, and passim.
Mallory, ˜˜Financial Problems,™™ 1.
58.
See Wilkins, Maturing of Multinational Enterprise, on these properties.
59.
Ibid., and Mallory, ˜˜Financial Problems,™™ 17, which did not include Kennecott
60.
or the Oroya re¬nery.
Mallory, ˜˜Financial Problems,™™ 14.
61.
There were similar problems related to foreign provision of telephone service,
62.
which we will not discuss.
Notes to Chapter 6, Pages 246“247
430

63. Mallory, ˜˜Financial Problems,™™ 15.
64. Wilkins, Maturing of Multinational Enterprise, 361; see also American &
Foreign Power, Annual Report 1960, 7; see list of major corporate claims
against Cuba in Paul E. Sigmund, Multinationals in Latin America: The Politics
of Nationalization (Madison: University of Wisconsin Press, 1980), 127; the
claim is listed under ˜˜Cuban Electric Company (Boise-Cascade),™™ for American
& Foreign Power™s successor company, Ebasco Industries, was merged into
Boise Cascade Corporation in 1969.
65. Mira Wilkins, interviews with key American & Foreign Power executives in
1964. Fidel Castro, as early as July 26, 1953, had spoken of the need to
nationalize the electricity ˜˜trusts.™™ Sigmund, Multinationals in Latin America,
90. No one at American & Foreign Power realized that if he took leadership of
the country, he would do just that.
66. Wilkins, Maturing of Multinational Enterprise, 362, for the terms; better still,
see American & Foreign Power, Annual Report 1958, 6, 18“19.
67. Gomez-Ibanez, Regulating Infrastructure 124“25, 139. Heineman retired in
´ ´˜
1955; he was extremely unhappy about what was going on in Argentina.
68. Moody™s Manual (Utilities) 1971, 2075 (on the renewal of its concession).
Argentine president Isabel Peron told a Peronist rally in October 1974 that her
´
government was going to ˜˜Argentinize™™ the Italo-Argentine Electric Co. Wall
Street Journal, Oct. 18, 1974. Gomez-Iba ˜ ez, Regulating Infrastructure, 139
´ ´n
(our source for the actual end of the ¬rm™s business in Argentina in 1979).
69. American & Foreign Power, Annual Report 1958, 47. See Wilkins, Maturing of
Multinational Enterprise, 362, for the actual payment terms.
70. American & Foreign Power, Annual Report 1960, 7; about 12 percent of the
securities, $35 million, was owned by the U.S. Export-Import Bank, six major
U.S. banks, and other U.S. investors, including large mutual funds, bringing the
total U.S. investments to 72 percent; most of the rest appears to have been
owned by individuals resident within Cuba. In Cuba, as elsewhere, American &
Foreign Power had brought in local investors.
71. There was a loss in Argentina, because the compensation did not fully cover the
investment. In Cuba, there was no compensation.
72. See Wilkins, Maturing of Multinational Enterprise, 362, and American &
Foreign Power, Annual Report 1960, 7, for the terms.
73. Gomez-Ibanez, Regulating Infrastructure, 124“25, 129; as noted earlier, in
´ ´˜
1950 So¬na™s interest had been reduced to a minority holding.
74. Miguel S. Wionczek, ˜˜Electric Power,™™ in Raymond Vernon, ed., Public Policy
and Private Enterprise in Mexico (Cambridge, MA: Harvard University Press,
1964), 75“76; the difference “ 27 percent “ was made up of small public and
private plants, including some remaining foreign investors.
75. Moody™s Manual (Utilities) 1971, 2007, 2009“10.
76. Wionczek, ˜˜Electric Power,™™ Ch. 6, discusses the ¬nal steps in 1960“1962 in
the Mexican government takeovers.
77. Wilkins, Maturing of Multinational Enterprise, 362; American & Foreign
Power, Annual Report 1961, 17.
78. American & Foreign Power, Annual Report 1961, 17; see also American &
Foreign Power, Annual Report 1962, 10.
Notes to Chapter 6, Pages 248“252 431

American & Foreign Power, Annual Report 1959, 13.
79.
American & Foreign Power, Annual Report 1961, 14.
80.
American & Foreign Power, Annual Report 1962, 9.
81.
Wilkins, Maturing of Multinational Enterprise, 362.
82.
McDowall, Light, 393“95.
83.
American & Foreign Power, Annual Report 1963, 8. The agreement was made
84.
on January 17, 1964; the closing took place on February 13, 1964. See also
Gomez-Ibanez, Regulating Infrastructure, 146“50, for background.
´ ´˜
We have put this together from Mallory, ˜˜Financial Problems,™™ 105; Moody™s
85.
Manual (Utilities) 1971, 2007“10, on the parent company; and Gomez-Ibanez,
´ ´˜
Regulating Infrastructure, 125, 150, who suggests that the Barquisimeto
subsidiary was nationalized at the same time as the Maracaibo one and gives
the 1976 date; we think he is probably wrong.
Wilkins, Maturing of Multinational Enterprise, 362.
86.
Stephen D. Krasner, Defending the National Interest: Raw Material Invest-
87.
ments and U.S. Foreign Policy (Princeton: Princeton University Press, 1978),
299“302, 312.
Gomez-Ibanez, Regulating Infrastructure, 125; Kennedy, ˜˜Relations Between
´ ´˜
88.
Transnational Corporations and Governments of Host Countries,™™ 73.
McDowall, Light, 395; Moody™s Manual (Utilities) 1971, 2017.
89.
Moody™s Manual (Utilities) 1971, 2017.
90.
See McDowall, Light, 395“98.
91.
Gomez-Ibanez, Regulating Infrastructure, 116.
´ ´˜
92.
Kari Levitt, Silent Surrender: The Multinational Corporation in Canada
93.
(Toronto: Macmillan of Canada, 1970), xix, 121.
Dannie N. Heineman, ˜˜The Changing International Environment,™™ address to
94.
the general meeting of shareholders of Societe Financiere de Transports
´´ `
et d™Entreprises Industrielles (So¬na), April 22, 1954 (published in booklet
form), 19.
The present volume has shown a long history of multinational enterprises. On
95.
the overall history of U.S. multinational enterprise, readers are once more
referred to Mira Wilkins, The Emergence of Multinational Enterprise: American
Business Abroad from the Colonial Era to 1914 (Cambridge, MA: Harvard
University Press, 1970), and Maturing of Multinational Enterprise. For the
history of all multinational enterprise, see Geoffrey Jones, Multinationals and
Global Capitalism from the Nineteenth to the Twenty-First Century (Oxford:
Oxford University Press, 2005); a brief historical summary is in Mira Wilkins,
˜˜Multinational Enterprise to 1930: Discontinuities and Continuities,™™ in Alfred
Chandler and Bruce Mazlish, eds., Leviathans: Multinational Corporations
and the New Global History (Cambridge: Cambridge University Press, 2005),
45“79, and Geoffrey Jones, ˜˜Multinationals from the 1930s to the 1980s,™™ in
ibid., 81“103.
There were exceptions. For example, Standard Oil of New Jersey (through Esso
96.
Eastern) entered into a 1964 60“40 joint venture with China Light & Power
Co. in Hong Kong. See Bennett H. Wall, Growth in a Changing Environment:
A History of Standard Oil Company (New Jersey), 1950“1972 and Exxon
Corporation 1972“1975 (New York: McGraw-Hill, 1988), 515“16, 523“25.
Notes to Chapter 7, Pages 252“262
432

97. In 1970, 68.9 percent of the crude oil production outside of the United States
and communist countries was produced by the then seven major international
oil companies and 8.4 percent by producing countries™ state-owned oil
companies. In 1979, the ¬gures were 23.9 percent and 68.7 percent. Raymond
Vernon, Two Hungry Giants: The United States and Japan in the Quest for
Oil and Ores (Cambridge, MA: Harvard University Press, 1983), 27. (To get
the 100 percent, one needs to add in ˜˜other international oil companies,™™
which produced 22.7 percent in 1970 and 7.4 percent in 1979).
98. Ibid., 27 (seven major international oil companies). The estimate of less than 1
percent of world electric power is that of the authors of the present book.
99. In 1979, Brascan was acquired by the Canadians Edward and Peter Bronfman
(cousins of Charles and Edgar Bronfman, who inherited control of Seagram™s).
Edward and Peter Bronfman were buying a collection of companies. Brascan
became an investment house. Graham D. Taylor and Peter A. Baskerville, A
Concise History of Business in Canada (Toronto: Oxford University Press,
1994), 444. By 1986, Edward and Peter Bronfman would control well over
100 companies. New York Times, Nov. 9, 1986. For some of the companies in
their trust-fund-turned-holding company (as of 1997), see ˜˜A Canadian
Business Group,™™ in Randall Morck, ˜˜How to Eliminate Pyramidal Business
Groups “ The Double Taxation of Inter-Corporate Dividends and Other
Incisive Uses of Tax Policy,™™ NBER Working Paper 10944, Dec. 2004, 39. See
also Chapter 7 herein for more on Brascan as of 2004“2006.
100. These generalizations were not true in every country, but overall they seem
legitimate.
101. See Raymond Vernon, Sovereignty at Bay: The Spread of U.S. Multinational
Enterprise (New York: Basic Books, 1971), for the early articulation of the
˜˜obsolescing bargain™™ concept. During the 1970s and 1980s, it was much
discussed among students of multinational enterprises. See, for example,
Theodore H. Moran, ed., Multinational Corporations: The Political Economy
of Foreign Direct Investment (Lexington, MA: Lexington Books, 1985), 6, and
passim.


7 coming full circle, 1978“2007, and
a global perspective
1. See, for example, R. W. Bacon and J. Desant-Jones, ˜˜Global Electric Power
Reform, Privatization and Liberalization of the Electric Power Companies in
Developing Countries,™™ Annual Reviews Energy and the Environment, 26
(2001), 331“59.
2. In the United States, ˜˜deregulation™™ often has been associated with the
administration of Ronald Reagan; however, the vast majority of regulatory
reform bills actually were enacted during the presidency of Jimmy Carter. No
major government-owned electric power operation in the United States (e.g.,
Tennessee Valley Authority, Bonneville Power Administration, etc.) was ever
privatized. Margaret Thatcher, who became prime minister of Great Britain in
1979, is closely associated with the privatization movement, including
privatization of the electric utility industry. Richard H. K. Vietor, Contrived
Notes to Chapter 7, Pages 262“263 433

Competition: Regulation and Deregulation in America (Cambridge, MA:
Harvard University Press, 1994), 15; Richard Green, ˜˜Electricity Deregulation
in England and Wales,™™ Topics in Regulatory Economics and Policy, no. 28
(1998), 179“202.
OECD/IEA, Electricity Supply Industry: Structure, Ownership and Regulation
3.
in OECD Countries (Paris: OECD/IEA, 1994), 23 (http://www.iea.org/textbase/
nppdf/free/1990/electricity_supply1994.pdf, accessed June 22, 2006).
Martin Chick argues that the breakdown of traditional arrangements in
4.
Europe was caused by ˜˜the deterioration in public ¬nances during the 1970s,
growing exasperation with the agency problems affecting the government-
industry relationship, and the recognition that technological progress had
made alternatives to the existing vertically integrated monopolies potentially
economically and politically attractive.™™ Martin Chick, ˜˜The Power of
Networks: De¬ning the Boundaries of the Natural Monopoly Network and
the Implications for the Restructuring of the Electricity Supply Industry,™™
´
Annales Historiques de l™Electricite (June 2004), 89“106 at 92. Also see the
´
preface in Pier Angelo Toninelli, The Rise and Fall of State-Owned Enterprise in
the Western World (Cambridge: Cambridge University Press, 2000), ix, where
he notes, ˜˜During the 1980s and 1990s, a major wave of disenchantment with
state intervention swept through the industrial nations. In those years the
fortunes of SOEs [state-owned enterprises] reached their nadir, and countries,
such as Italy, that had previously resisted privatization started a massive
dismantling of public undertakings.™™
˜˜In the early 1990s, the World Bank decided to ¬nance projects mainly in states
5.
that ˜demonstrate a commitment to implement a comprehensive reform of the
power sector, privatize distribution, and facilitate private participation in
generation and environment reforms.™ This marks a change from the period
before 1993, when the World Bank ¬nanced mostly large-scale generation
projects. . . . The overall strategy of the Asian Development Bank (ADB) for the
power sector is to support restructuring, especially the promotion of
competition and private-sector participation.™™ OECD/IEA, Electricity in India
(Washington, DC: OECD/IEA, 2002), 70“71.
Witold J. Henisz, Bennet A. Zelner, and Mauro F. Guillen, ˜˜International
´
6.
Coercion, Emulation and Policy Diffusion: Market-Oriented Infrastructure
Reforms, 1977“1999,™™ Working Paper, June 17, 2004 (http://papers.ssrn.com/
sol3/papers.cfm?abstract_id=557140, accessed May 31, 2006).
Fernando Manibog, Rafael Dominguez, and Stephan Wegner, Power for
7.
Development: A Review of the World Bank Group™s Experience with Private
Participation in the Electricity Sector (Washington, DC: World Bank, 2003), 1.
The potential competitiveness of the generation function was enhanced by
technological changes in generating equipment. The minimum ef¬cient scale, for
example, of combined-cycle gas generators was substantially lower than that of
the traditional coal-¬red and nuclear base-load generators, leading to a
substantial reduction in barriers to entry. U.S. Department of Energy, Energy
Information Administration, The Changing Structure of the Electric Power
Industry 2000: An Update, Oct. 2000 (http://www.eia.doe.gov/cneaf/electricity/
chg_stru_update/chapter5.html#tech, accessed June 2, 2006).
Notes to Chapter 7, Pages 263“264
434

8. According to a 1994 OECD report, ˜˜The electricity supply industry (ESI)
worldwide, and in many OECD countries in particular, has been subject to
reform and change for more than a decade. Driven by political and economic
considerations, a number of Member countries have introduced signi¬cant
structural, institutional, and regulatory changes and have drastically trans-
formed their ESI™s.™™ OECD/IEA, Electricity Supply Industry, 20. Reactions
recently have occurred, and the wisdom of unbundling generation from the
other functions has been challenged in the United States, even by market
advocates. See, for example, the Cato Institute publication by Robert J.
Michaels, ˜˜Vertical Integration and the Restructuring of the U.S. Electricity
Industry,™™ Policy Analysis 572 (July 13, 2006).
9. Timothy J. Brennan, et al., A Shock to the System: Restructuring America™s
Electricity Industry (Washington, DC: Resources for the Future, 1996), 10.
This legislation was followed by major energy policy acts in 1992 and 2005
that further opened up the electricity system in the United States to
competition, thus also opening the door to foreign investment. The 2005 act
also repealed the Public Utility Holding Company Act of 1935. At the same
time, there were major changes in bank regulation in the United States. The
Glass-Steagall Act of 1933 was repealed in 1999, which greatly widened the
range of ¬nancial services in which banks were allowed to participate. The act
opened the way for banks to participate once again in public utilities ¬nance.
James R. Barth, R. Dan Brumbaugh, and James A Wilcox, ˜˜Policy Watch: The
Repeal of Glass-Steagall and the Advent of Broad Banking,™™ Journal of
Economic Perspectives 14 (Spring 2000), 191“204.
10. Privatization laws were passed in Argentina in 1990, Colombia in 1991, Peru in
1992, Bolivia in 1994, and Brazil in 1995. Victoria Murillo and Cecilia
Mart±nez-Gallardo, ˜˜Political Competition and Policy Adoption,™™ Institute
´
for Social and Economic Research Policy, Working Paper 2005“06 (New
York: Columbia University, 2005), Table 1. Murillo and Mart±nez-Gallardo
´
argue (p. 1) that the pressure to adopt market-oriented policies was more
intense in capital-scarce developing countries than it was in developed
countries. Speci¬cally regarding Latin America, they see such pressures as a
legacy of the debt crisis of the early 1980s, with its shortages of domestic
capital and heightened ¬scal de¬cits. These factors also played a role in some
Asian countries. See James H. Williams and Navroz K. Dubash, ˜˜Asian
Electricity Reform in Historical Perspective,™™ Paci¬c Affairs, 77 (Fall 2004),
411“36.
11. By 2000, Endesa (Chile) and Enersis had been taken over by Endesa (Spain),
which had become a private company in 1998. In 2006, Endesa (Spain) had
become the object of a takeover bid by the German utility E.ON (a company
that will be discussed below). The remaining domestic Chilean companies
continued to expand within Latin America, adding operations in Bolivia,
Colombia, and the Dominican Republic. U.S. Department of Energy, Energy
Information Administration, Privatization and the Globalization of Energy
Markets (Washington, DC: EIA, Oct. 1996), Table A3. The online version
(http://www.eia.doe.gov/emeu/pgem/contents.html, accessed June 13, 2006)
contains cross-national ownership tables updated in June 2000.
Notes to Chapter 7, Pages 264“266 435

12. William W. Hogan, ˜˜Electricity Market Restructuring: Reform of Reforms,™™
Journal of Regulatory Economics, 21 (2002), 125. For a detailed account of the
restructuring in England and Wales, see U.S. Department of Energy, Energy
Information Administration, Electricity Reform Abroad and U.S. Investment
(Washington, DC: EIA, Sept. 1997), Ch. 2 (http://www.eia.doe.gov/emeu/
pgem/electric/contents.html, accessed June 14, 2006).
13. OECD/IEA, Competition in Electricity Markets (Paris: OECD/IEA, 2001),
29“30. For a more extensive listing of the various forms of market-based
reforms in the industry in various countries around the world, see Bacon and
Jones, ˜˜Global Electric Power,™™ esp. 7“8. While it is still very early to assess the
impact of the increased reliance on competition and the electricity market, one
recent study of the New York Independent Systems Operator (NYISO) found
that extreme volatility in prices existed, much greater than in traditional
commodity markets, caused in large part by transmission congestion. As the
authors note, ˜˜Reducing congestion is a dif¬cult task to implement and is part
of the ongoing capital investment problem that continues to plague the
electricity industry today.™™ Lester Hadsell and Jany A. Shawky, ˜˜Electricity
Price Volatility and the Marginal Cost of Congestion: An Empirical Study of
Peak Hours on the NYISO Market, 2001“2004,™™ The Energy Journal, 27
(2006), 177.
14. Independent power producers generally did not invest in transmission or
distribution. Various clusters and consortia often were created to purchase a
power generator or build a new one (green¬eld investment) in a foreign
country. In July 2002, for example, Brazil sold the concession to an existing
1,078 MW plant in Tocantins state to a group led by Tractebel (discussed later
in the text of the chapter) that included Alcoa, the British-Australian BHP
Billiton, and two Brazilian companies. New York Times, July 13, 2002.
15. A study by the U.S. Energy Information Administration contains information on
investments made by foreign ¬rms in response to the privatization and
liberalization movement, using information from company annual reports in
1998 and 1999. Much of the following discussion is based on U.S. Department of
Energy, Energy Information Administration, Privatization and the Globalization
of Energy Markets (Washington, DC: EIA, 1996), data updated June 2000
(http://www.eia.doe.gov/emeu/pgem/contents.html, accessed June 13, 2006).
16. In 2000 its nuclear power business, head of¬ce in the United States, was sold to
U.K.-based BNFL, while its power generation business (a 50 percent interest in
ABB Alstom Power) was sold to the French ¬rm Alstom. See http://www.abb.
com/, accessed Oct. 2, 2007.
17. On the dismemberment of AEG™s operations in the 1990s, see New York
Times, Jan. 26, 1996; on AEG-Telefunken™s collapse in the early 1980s, see
New York Times, Aug. 22, 1982.
18. New York Times, Aug. 4, 1998.
19. New York Times, May 29, 1999; Oct. 3, 2000; Dec. 23, 2000; May 13, 2001;
Sept. 13, 2001; Feb. 20, 2002; Aug. 30, 2002; March 4, 2003; and Aug. 7,
2003. Even with its dif¬culties, AES continued operating in twenty-four
countries and by the end of 2005 was ready to start investing again. It
announced a $1.3 billion Bulgarian power project in Dec. 2005. Wall Street
Notes to Chapter 7, Pages 266“267
436

Journal, Dec. 7, 2005 (http://www.aes.com/aes/index?page=home, accessed
July 3, 2006).
ExxonMobil™s investments in China (Hong Kong) date from 1964, when Esso
20.
and China Light and Power formed Peninsula Electric Power Co. Ltd., 60
percent owned by Esso, to be the main generator of electricity for China Light
and Power. Nigel Cameron, Power: The Story of China Light (Hong Kong:
Oxford University Press, 1982), 200“5.
OECD/IEA, Electricity in India, 7“73 (http://www.msnbc.com/id/12984163/,
21.
accessed May 31, 2006).
However, as of mid-2006, Hydro One did not appear to have any foreign assets
22.
(http://www.hydroone.com/, accessed July 3, 2006).
http://www.fortisinc.com/, accessed July 5, 2006.
23.
See http://www.fundinguniverse.com/company-histories/Brascan-Corporation-
24.

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