ARTICLE WRITTEN BY INSTRUCTOR IS TAKEN TO COURT

An article in the July issue of the Atlantic Monthly by Noobar R. Danielian, instructor in Economics, is the cause of two $100,000 libel suits brought by the Associated Gas and Electric Company against the Atlantic Monthly Company and the Atlantic Monthly Press. Dr. Danielian's article was entitled "Gas: A Study in Expansion. The Case of Associated Gas.", and presented facts "relative to the industrial feudalism" of the Associated Gas and Electric Company. Since the article was printed, the Senate Committee on Banking and Currency recently added the Associated Gas and Electric to the list of companies which it intends to examine.

Dr. Danielian explained when reached late last night, "The suit is an attempt to frighten other publications from revealing the occult nature of the Associated Gas and Electric system and the oblique practices therein perpetrated. I have no further opinion to express. I wish, however, it were possible to sound out the feelings of the hundreds of thousands of investors who have been bewildered by the sophisticated use made of the corporate device."

Dangerous Inflation

The article states in part, "If the Associated Gas capitalization is a sort of container--a stein, shall we say--then the foregoing evidence shows that there is a good deal of foam in it, for which the public has paid its money.

"The payment of excessive prices in the acquisition of properties has not been the only way in which this condition has been created. There are other methods by which the Associated has blown up its capitalization, causing it to inflate to dangerous dimensions. By a process of issuing bonds at discounts, repurchasing them at premiums, then reselling the same bonds at lower than repurchase price, and finally redeeming them at par, or above, before the date of maturity, the Associated Gas and Electric Company has created enormous liabilities. As a result of such transactions, the funds obtained have been far short of the face value of obligations created."