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Columbia Gas System, Inc. - Lehman Brothers Collection

Columbia Gas System, Inc.

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Columbia Corporation was the predecessor of the Columbia Gas System, Inc. Columbia Corporation was formed in 1906 in West Virginia. The company produced natural gas in West Virginia and Kentucky for delivery to Cincinnati, Ohio. The company was renamed Columbia Gas & Electric Company and doubled in size with its acquisition of Ohio Fuel Corporation in 1926. The company was incorporated in Delaware as Columbia Gas & Electric Corporation.

Columbia grew through the 1920s, as its acquisition of Ohio Fuel greatly increased the volume of gas it sold. The company began to explore oil at this time as well. The end of the decade witnessed the introduction of high-pressure pipelines, which allowed the company to transport natural gas over long distances from the fields where it originated. Columbia was able to extend its pipelines east through Pennsylvania, New Jersey, and New York. The company connected its eastern lines with natural gas fields in Texas after its 1930 purchase of a 50 percent interest in Panhandle Eastern Pipe Line Company.

Industry began to demand more natural gas in the 1930s as it became more readily available. Demand also rose from a drop in the price of natural gas. The Depression affected the demand for gas and therefore Columbia's earnings during that time period. In 1935 the company's earnings doubled those of the previous year, and Columbia began to bounce back. That same year, the company's tangle with antitrust suits began, as Columbia was forced to divest itself of Columbia Oil & Gasoline, the subsidiary that controlled Panhandle Eastern Pipe Line Company. In 1936 the company linked its system to Detroit, Michigan, allowing natural gas to be transmitted directly to the city from the fields in Texas. Another antitrust suit was filed in 1938; by 1946 Columbia had sold off all of its electrical subsidiaries. To reflect this change, the company changed its name to the Columbia Gas System, Inc., in 1948.

World War II resulted in a huge demand for natural gas, such that demand exceeded supply. In the early 1950s Columbia was able to meet demand by connecting its pipelines to gas fields in the Southwest and the Gulf of Mexico. The company continued to grow throughout the decade. In 1956 it began a corporate simplification process, with the goal of reducing the number of subsidiaries subject to federal and state regulations. By 1970 the company consisted of nineteen operating subsidiaries and a subsidiary service company.

Columbia continued to do well in the 1960s. Its revenues increased an average of 5.9 percent each year between 1961 and 1971. By 1967 Columbia was the largest integrated natural gas system in the United States. Demand for natural gas surged during this decade, resulting in Columbia's expanded search for gas. The company drilled in Appalachia, offshore Louisiana, and Alaska. Columbia also looked to liquefied natural gas imports from Algeria to help fill the gap between supply and demand.

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