61-742: The Underground Electric Railways Company of London, Limited ( UERL ), known operationally as the Underground for much of its existence, was established in 1902. It was the holding company for the three deep-level "tube" underground railway lines opened in London during 1906 and 1907: the Baker Street and Waterloo Railway , the Charing Cross, Euston and Hampstead Railway and the Great Northern, Piccadilly and Brompton Railway . It
122-489: A jointly owned test train operated a shuttle service between February and November 1900. Having proven the practicality of electric traction, the two companies set up a joint committee to select a supplier of equipment for the electrification of their networks. The committee's preferred system was a 3,000 volt , three-phase alternating current system proposed by Hungarian electrical engineering company Ganz . The system delivered current by overhead conductor wires and
183-589: A matter of broadcast regulation . In the United States, a personal holding company is defined in section 542 of the Internal Revenue Code . A corporation is a personal holding company if both of the following requirements are met: A parent company is a company that owns enough voting power in another firm (or subsidiary ) to control management and operations by influencing or electing its board of directors . The definition of
244-425: A parent company differs from jurisdiction to jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction. When an existing company establishes a new company and keeps majority shares with itself, and invites other companies to buy minority shares, it is called a parent company. A parent company could simply be a company that wholly owns another company, which
305-596: A profit. Investors in the notes would gain the double benefit of the growth in share price and interest. Before its takeover, the DR had carried out some joint electrification experiments with the Metropolitan Railway (MR), the other sub-surface line with which the DR shared the Inner Circle . A section of track between Earl's Court and High Street Kensington was electrified with a four-rail system and
366-472: A tending subsidiary of the purchasing company, which, in turn, becomes the parent company of the subsidiary. (A holding below 50% could be sufficient to give a parent company material influence if they are the largest individual shareholder or if they are placed in control of the running of the operation by non-operational shareholders.) In the United Kingdom, the term holding company is defined by
427-466: Is defined by Part 1.2, Division 6, Section 46 of the Corporations Act 2001 (Cth) , which states: A body corporate (in this section called the first body) is a subsidiary of another body corporate if, and only if: Toronto-based lawyer Michael Finley has stated, "The emerging trend that has seen international plaintiffs permitted to proceed with claims against Canadian parent companies for
488-458: Is sometimes done on a per- market basis. For example, in Atlanta both WNNX and later WWWQ are licensed to "WNNX LiCo, Inc." (LiCo meaning "license company"), both owned by Susquehanna Radio (which was later sold to Cumulus Media ). In determining caps to prevent excessive concentration of media ownership , all of these are attributed to the parent company, as are leased stations , as
549-428: Is to own stock of other companies to form a corporate group . In some jurisdictions around the world, holding companies are called parent companies , which, besides holding stock in other companies, can conduct trade and other business activities themselves. Holding companies reduce risk for the shareholders , and can permit the ownership and control of a number of different companies. The New York Times uses
610-618: The Board of Trade . The decision was made in December 1901 to use the four-rail system, although the arbitrator, Alfred Lyttelton , was critical of the DR's unilateral decision. Victorious, the MDETC quickly began the electrification of the DR's tracks, starting with an extension from Ealing Common to South Harrow that opened with its first electric service in June 1903. Conversion of the rest of
671-577: The Central London Railway (CLR) in 1900. Construction started on one other line and stopped following a financial crisis. The rest of the companies needed help to raise funding. The District Railway (DR) was a sub-surface underground railway, which had opened in 1868. Its steam-hauled services operated around the Inner Circle and on branches to Hounslow , Wimbledon , Richmond , Ealing , Whitechapel and New Cross . By 1901,
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#1732772575195732-480: The Companies Act 2006 at section 1159. It defines a holding company as a company that holds a majority of the voting rights in another company, or is a member of another company and has the right to appoint or remove a majority of its board of directors, or is a member of another company and controls alone, pursuant to an agreement with other members, a majority of the voting rights in that company. After
793-648: The County of London and served destinations in Middlesex , Essex , Hertfordshire and Surrey . In the 1920s, competition from small unregulated bus operators reduced the profitability of the road transport operations, leading the UERL's directors to seek government regulation. This led to the establishment of the London Passenger Transport Board in 1933, which absorbed the UERL and all of
854-632: The financial crisis of 2007–2008 , many U.S. investment banks converted to holding companies. According to the Federal Financial Institutions Examination Council 's website, JPMorgan Chase , Bank of America , Citigroup , Wells Fargo , and Goldman Sachs were the five largest bank holding companies in the finance sector, as of December 2013 , based on total assets. The Public Utility Holding Company Act of 1935 caused many energy companies to divest their subsidiary businesses. Between 1938 and 1958
915-507: The 35 million that had been predicted during the planning of the line. The Piccadilly Tube achieved 26 million of a predicted 60 million and the Hampstead Tube managed 25 million of a predicted 50 million. For the DR, the UERL had predicted an increase to 100 million passengers after electrification, but achieved 55 million. The lower than expected passenger numbers were partly due to competition between
976-458: The BS&;WR was quickly restarted. 50 per cent of the tunnelling and 25 per cent of the station work had been completed before work had been stopped, and by February 1904 virtually all of the tunnels and underground parts of the stations between Elephant & Castle and Great Central station (later renamed Marylebone ) were complete and works on the station buildings were under way. Construction of
1037-575: The Bakerloo Tube, Piccadilly Tube and Hampstead Tube. Yerkes also did not live to see the UERL's financial struggle during the first years after the opening of the new lines. Because of greatly over-optimistic pre-opening predictions of passenger numbers, the lines failed to generate the income expected and needed to fund the interest payments on the UERL's substantial borrowings. In the Bakerloo Tube's first twelve months of operation, it carried 20.5 million passengers, less than sixty per cent of
1098-817: The Combine. Only the MR (and its subsidiaries the Great Northern & City Railway and the East London Railway) and the W&;CR (by then fully owned by the London and South Western Railway ) remained outside of the Underground Group's control. Another way in which the UERL tried to improve income was the construction of extensions to its lines to generate additional passenger traffic, often through
1159-471: The DR was struggling to compete with emerging motor bus and electric tram companies and the CLR, which were eroding its passenger traffic. To become more competitive, the DR was contemplating a programme of electrification . However, it needed to be financially strong enough to raise the capital to carry out the work independently. It also had parliamentary approval for a congestion-relieving deep-level line that
1220-610: The DR's tracks was completed in mid-1905, although failure to coordinate installations with the MR meant that the first electric services on the Inner Circle from 1 July 1905 were disrupted for several months due to equipment failures on the MR's trains. Power came from the UERL's own Lots Road Power Station on Chelsea Creek . Originally planned by the B&;PCR, construction of the power station began in 1902 and finished in December 1904. It became operational on 1 February 1905, generating three-phase alternating current at 11,000 volts, which
1281-509: The DR's tube route to create the Great Northern, Piccadilly and Brompton Railway (GNP&BR). Yerkes' final purchase was the Baker Street and Waterloo Railway (BS&WR) in March 1902 for £360,000 (£49.4 million today). The BS&WR had permission to construct a line from Paddington to Elephant & Castle and, unlike his other tube railway purchases, construction work had started in 1898. Substantial progress had been made before it
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#17327725751951342-608: The District Railway or DR. By March 1901, the syndicate had acquired a controlling interest in the DR and proposed its electrification. Yerkes established the Metropolitan District Electric Traction Company (MDETC) on 15 July 1901 with himself as managing director. The company raised £1 million (£137 million today) to carry out the electrification works including the construction of the generating station and supplying
1403-705: The GNP&;BR and the CCE&;HR began in July 1902 and proceeded quickly so that the UERL was able to record in its annual report in October 1904 that 80 per cent of the GNP&BR's and 75 per cent of the CCE&HR's tunnels had been completed. Following the pattern adopted by the earlier tube lines, each of the UERL's lines was constructed as a pair of circular tunnels using tunnelling shields with segmental cast iron tunnel linings bolted together and grouted into place as
1464-521: The LGOC's passengers, eroded the profitability of the Combine's bus operations. This had a negative impact on the profitability of the whole group. Stanley lobbied the government for regulation of transport services in the London area. Starting in 1923, a series of legislative initiatives were made in this direction, with Stanley and Labour politician Herbert Morrison , London County Councillor (and later member of parliament and Minister of Transport ) at
1525-515: The MDETC and paid off the company's shareholders with cash and UERL shares. The UERL was set up with an initial capitalisation of £5 million (£686 million today). The company was backed by three merchant banks, Speyer Brothers in London, Speyer & Co. in New York and Old Colony Trust Company in Boston, each of which was to receive £250,000 from the capital raised. Almost 60 per cent of
1586-429: The UERL's lines and those of the other tube and sub-surface railway companies, and the further spread of electric trams and motor buses, replacing slower, horse-drawn road transport, that took a large number of passengers away from the trains. The low price of tickets also depressed income. The crisis point for the UERL was the need to redeem the five-year profit-sharing secured notes on 30 June 1908. The UERL did not have
1647-687: The UERL. In 1909, the UERL overcame the objections of previously reluctant American investors, and announced a parliamentary bill for the formal merger of the Bakerloo, Hampstead and Piccadilly Tube lines into a single company, the London Electric Railway Company (LER). This bill received royal assent and was enacted on 26 July 1910 as the London Electric Railway Amalgamation Act 1910 ( 10 Edw. 7. & 1 Geo. 5 . c. xxxii). The DR
1708-455: The United Kingdom, is generally held that an organisation holding a 'controlling stake' in a company (a holding of over 51% of the stock) is in effect the de facto parent company of the firm, having overriding material influence over the held company's operations, even if no formal full takeover has been enacted. Once a full takeover or purchase is enacted, the held company is seen to have ceased to operate as an independent entity but to have become
1769-528: The United States and which was already in use on the City & South London and Central London Railways; they rejected the Ganz system putting the DR and the MDETC into dispute with the MR which wanted to proceed with the Ganz system. After some acrimonious debate between the two companies, some of which was carried out in public through the letters pages of The Times newspaper, the dispute went to arbitration at
1830-499: The allegedly wrongful activity of their foreign subsidiaries means that the corporate veil is no longer a silver bullet to the heart of a plaintiff's case." The parent subsidiary company relationship is defined by Part 1, Section 5, Subsection 1 of the Companies Act, which states: 5.—(1) For the purposes of this Act, a corporation shall, subject to subsection (3), be deemed to be a subsidiary of another corporation, if — In
1891-484: The city council and Illinois state legislature into granting him a 100-year franchise for the tramway system. Following a public backlash, he sold his Chicago investments and turned his attention to opportunities in London. Yerkes' first acquisition in London was the Charing Cross, Euston and Hampstead Railway (CCE&HR). The company had parliamentary permission to build a deep-level tube railway from Charing Cross to Hampstead and Highgate . Still, it could not raise
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1952-429: The debt, the UERL's general manager, Albert Stanley , appointed by Gibb in 1907, began to increase the UERL's income by improving management structures. With commercial manager Frank Pick , Stanley instigated a plan to increase passenger numbers; developing the "Underground" brand and establishing a joint booking system and coordinated fares throughout all of London's underground railways, including those not controlled by
2013-626: The finances, selling only a tiny fraction of the shares. Robert Perks , a solicitor for several railway companies and Member of Parliament for Louth , had suggested the CCE&HR to Yerkes and the American's consortium bought the company for £100,000 (approximately £13.7 million today) on 28 September 1900. Perks was also a large shareholder in Yerkes' next target, the Metropolitan District Railway , usually known as
2074-449: The forefront of debates as to the level of regulation and public control under which transport services should be brought. Stanley aimed for regulation that would give the UERL group protection from competition and allow it to take substantive control of the LCC's tram system ; Morrison preferred full public ownership. After seven years of false starts, a bill was announced at the end of 1930 for
2135-570: The formation of the London Passenger Transport Board (LPTB), a public corporation that would take control of the UERL, the Metropolitan Railway and all bus and tram operators within an area designated as the London Passenger Transport Area . As Stanley had done with shareholders in 1910 over the consolidation of the three UERL controlled tube lines, he used his persuasiveness to obtain their agreements to
2196-461: The government buy-out of their stock. The Board was a compromise – public ownership but not full nationalisation – and came into existence on 1 July 1933, with Stanley as chairman and Pick as Chief Executive. Holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose
2257-463: The independent and municipally operated railway, bus, and tram services in the London area. The first deep-level tube railway, the City and South London Railway (C&SLR), opened in 1890. Its early success resulted in a rush of proposals to Parliament for other deep-level routes under the capital, but by 1901 only two more lines had opened: the Waterloo & City Railway (W&CR) in 1898 and
2318-522: The initial share offering was bought in the United States, with a third sold in Britain and the rest mainly in the Netherlands. Further capital was soon needed for the construction works and additional share and bond issues followed. The UERL eventually raised a total of £18 million (£2.44 billion today). Like many of Yerkes' schemes in the United States, the structure of the UERL's finances
2379-499: The money. Speyer unsuccessfully tried to persuade the London County Council (LCC) to inject £5 million into the UERL and used some of his own bank's money to pay-off disgruntled shareholders threatening bankruptcy proceedings. Eventually, Speyer and Gibb managed to obtain agreement from the shareholders to convert the notes into long-term debt to be repaid in 1933 and 1948. As Speyer and Gibb worked to restructure
2440-415: The new electric rolling stock. In September 1901, Perks became the DR's chairman. The Brompton and Piccadilly Circus Railway (B&PCR) was a tube railway company that had been purchased by the DR in 1898 but had remained a separate financial entity. It had permission to construct a line from South Kensington to Piccadilly Circus . Still, it had yet to raise the capital to do so. At South Kensington, it
2501-571: The number of holding companies declined from 216 to 18. An energy law passed in 2005 removed the 1935 requirements, and has led to mergers and holding company formation among power marketing and power brokering companies. In US broadcasting , many major media conglomerates have purchased smaller broadcasters outright, but have not changed the broadcast licenses to reflect this, resulting in stations that are (for example) still licensed to Jacor and Citicasters , effectively making them such as subsidiary companies of their owner iHeartMedia . This
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2562-443: The presence or absence of a train on the track ahead. Signals incorporated an arm that was raised when the signal was red. If a train failed to stop at a red signal, the arm would activate a " tripcock " on the train; applying the brakes automatically. Apart from the electrification of the DR, Yerkes did not live to see the completion of the fast-paced construction works that he set in motion; he died in New York on 29 December 1905 and
2623-650: The rest of the group. Through the UERL's shareholding in the London and Suburban Traction Company (LSTC), which it owned jointly with British Electric Traction , the UERL took control in 1913 of the London United Tramways , the Metropolitan Electric Tramways and the South Metropolitan Electric Tramways . The UERL also took control of bus builder AEC . The much enlarged group became known as
2684-488: The shield advanced. Generally the tunnels followed surface roads and were constructed side by side, but where the width of the road above was insufficient, tunnels were placed one above the other. Stations on all three lines were provided with surface buildings designed by the UERL's architect Leslie Green in a standardised style modified for each site. These consisted of two-storey steel-framed buildings faced with red glazed terracotta blocks with wide semi-circular windows on
2745-432: The stimulation of new housing developments in the areas through which the lines ran. The DR was extended to Uxbridge in 1910, by a connection made to the MR. In 1913, the Bakerloo Tube was extended to Paddington and to Queen's Park and Watford Junction four years later. The Hampstead tube was extended a short distance at its southern end to provide an interchange with the Bakerloo and the DR at Embankment in 1914. It
2806-540: The stock of Company B, Company A will not pay taxes on dividends paid by Company B to its stockholders, as the payment of dividends from B to A is essentially transferring cash within a single enterprise. Any other shareholders of Company B will pay the usual taxes on dividends, as they are legitimate and ordinary dividends to these shareholders. Sometimes, a company intended to be a pure holding company identifies itself as such by adding "Holding" or "Holdings" to its name. The parent company–subsidiary company relationship
2867-511: The term parent holding company . Holding companies can be subsidiaries in a tiered structure . Holding companies are also created to hold assets such as intellectual property or trade secrets , that are protected from the operating company. That creates a smaller risk when it comes to litigation . In the United States, 80% of stock, in voting and value, must be owned before tax consolidation benefits such as tax-free dividends can be claimed. That is, if Company A owns 80% or more of
2928-514: The upper floor. The stations had flat roofs and were designed to accommodate upward extension for commercial development. Most stations were provided with between two and four lifts and an emergency spiral staircase in a separate shaft. At platform level, the wall tiling featured the station name and an individual geometric pattern and colour scheme designed by Green. The UERL used a Westinghouse automatic signalling system operated through electrified track circuits . This controlled signals based on
2989-523: Was also the parent company from 1902 of the District Railway , which it electrified between 1903 and 1905. The UERL is a precursor of today's London Underground ; its three tube lines form the central sections of today's Bakerloo , Northern and Piccadilly lines. The UERL struggled financially in the first years after the opening of its lines and narrowly avoided bankruptcy in 1908 by restructuring its debt. A policy of expansion by acquisition
3050-491: Was cheaper than alternatives using power rails and required fewer electrical sub-stations. An experimental line had been constructed by Ganz in Budapest , although the system had not yet been adopted for the full-scale operation of a railway. Before the appointment of Ganz could be finalised, Yerkes took control of the DR. He and his engineers preferred the low voltage direct current conductor rail system they had worked with in
3111-429: Was converted to 550 volts direct current at track-side transformers located around the network. The power station was constructed large enough to power all of the UERL's lines once they opened plus others later. By the time the last of the DR's steam trains were retired on 5 November 1905, the UERL had spent £1.7 million (£231 million today) on the electrification of the line. With funds in place, construction of
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#17327725751953172-585: Was extended at its northern end from Golders Green into the Middlesex countryside to reach Edgware in 1924. In 1926, the Hampstead tube was extended south to connect to the C&;SLR at Kennington in conjunction with a reconstruction of the C&SLR and its 1926 extension from Clapham Common to Morden . The CLR was extended to Ealing Broadway in 1920. Permission for an extension of the line to Richmond
3233-420: Was followed before World War I, so the company operated most of the underground railway lines in and around London. It also controlled large bus and tram fleets, the profits from which subsidised the financially weaker railways. After the war, railway extensions took the UERL's services out into suburban areas to stimulate additional passenger numbers so that, by the early 1930s, the company's lines stretched beyond
3294-523: Was gradually introduced on a number of lines with automatic sliding doors along the length of the carriages instead of manual end gates, reducing boarding times. By the middle of the 1920s, the organisation had expanded to such an extent that a large, new headquarters building designed by Charles Holden was constructed at 55 Broadway over St James's Park station . Starting in the early 1920s, competition from numerous small bus companies, nicknamed "pirates" because they operated irregular routes and plundered
3355-447: Was highly complex and involved the use of novel financial instruments. One method, used by Yerkes to raise £7 million, was "profit-sharing secured notes", a form of bond which was secured against the value of shares. They were sold at a 4 per cent discount, paid 5 per cent interest and were due for repayment in 1908. The assumption was that shares would inevitably rise in value once the UERL's tube railways were operational and producing
3416-482: Was not merged with the tube lines and remained a separate company. As managing director of the UERL from 1910, Stanley led further transport consolidation with the UERL's take-over of London General Omnibus Company (LGOC) in 1912 and the CLR and the C&SLR on 1 January 1913. The LGOC was the dominant bus operator in the capital and its high profitability (it paid dividends of 18 per cent compared with Underground Group companies' dividends of 1 to 3 per cent) subsidised
3477-525: Was obtained in 1913 and again in 1920, but was not used. Later, during 1932 and 1933, the Piccadilly Tube was extended at both ends: in the north from Finsbury Park to Cockfosters , and in the west from Hammersmith to Hounslow and Uxbridge using the DR's tracks. In addition, a programme of modernising many of the Underground's busiest central London stations was started; providing them with escalators to replace lifts. New and refurbished rolling stock
3538-548: Was replaced as UERL chairman by Edgar Speyer . Speyer was chairman of the UERL's backer Speyer Brothers and a partner in Speyer & Co. Sir George Gibb , general manager of the North Eastern Railway , was appointed managing director. The BS&WR opened to passengers on 10 March 1906. The GNP&BR followed on 15 December 1906, with the CCE&HR on 22 June 1907. The three tube lines quickly came to be known as
3599-460: Was stopped following the collapse of the BS&WR's parent company, the London & Globe Finance Corporation, due to the fraud of its managing director Whitaker Wright in 1900. With a varied collection of companies under his control, Yerkes established the UERL in April 1902 to take control of them all and manage the planned works and took the position of chairman. On 8 June 1902, the UERL took over
3660-483: Was to connect to the deep-level line planned by the DR. On 12 September 1901, the DR-controlled board of the B&PCR sold the company to the MDETC. In the same month, the B&PCR took over the Great Northern and Strand Railway (GN&SR), a tube railway with permission to build a line from Strand to Finsbury Park . The routes of the B&PCR and GN&SR were subsequently linked and combined with part of
3721-474: Was to run beneath its existing route between Gloucester Road and Mansion House . By 1898, American financier Charles Tyson Yerkes had made a large fortune developing the electric tramway and elevated railway systems in Chicago, but his questionable business methods, which included bribery and blackmail, had finally drawn the disapproving attention of the public. Yerkes had unsuccessfully attempted to bribe
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