Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-10-17
WITNESSES CLASH
WITH INVESTIGATOR
Recourse to Law Threatened
to Compel Replies in
Utilities Probe.
By the Associated Press.

BY the Associated<P Press.
After two witnesses of the Electric
Bond g. Share Co. had refused today to
answer questions put to them in the
Federal Trade Commissions power in
vestigation, Commissioner McCulloch
served notice that the commission would
take recourse to law to compel repre-
sentatives of the company to give the
information desired.
McCulloch's stand followed instruc-
tionS given by John F. MacLane, counsel
for the Electric Bond &; Share Co., to
Ralph B. Feagin, a vice president, and
A. E. Smith, controller, that they were
not required to answer questions or pro-
duce documents bearing on the financial
records of their organization. In accord
ance with this, both Feagin and Smith
had refused answers to questions by
Robert E. Healy, commission counsel,
regarding any payments made by their
company TO influence public opinion
against municipal ownership.
Contrary to MacLane'S position, Com
missioner McCulloch contended that the
information sought comes Squarely
within the Senate resolution ordering
this investigation and also the powers
conferred on the commission by the act
which created it,
Row Over Cooperation.
Earlier MacLane had said the Electric
Bond & Share Co. had co-operated
with the present investigation in the
furnishing OF such records as were ma
terial. McCulloch, however, expressed
the opinion that the company was will
ing to Cooperate with the investigation
''only to the extent that served its own
end" The commissioner added that he
could only presume the company was
detying the jurisdiction of the commits
sion, and that it was seeking to conceal
information from the Senate and from
the country.
IF there is any method of law avail
able to force the Electric Bond & Share
Co. to submit this information" he
concluded, "the commission will utilize
those methods"
The investigation was recessed until
next Tuesday morning at 10 am, with
the subpoenas for Feagin and Smith
remaining in force. Furthermore,
Smith was directed specifically by Com
missioner McCulloch to produce all dis
bursement vouchers showing payments
made by the company to influence pub
lie opinion or elections, as covered in
the Walsh resolution. When this di-
rection was first given, Smith indicated
that he would ignore it upon advice
of counsel. Recalled to the stand for
the third time he was given the di-
rection again by McCulloch but he
made mo reply. -. - -. -
- :, : ~; ~ Companies. Overlap. -, -
: .Contrary to Smith,. the first to- take
70 AV1d fNt1g1SA tedyrl Ho
eould-giv no information as to whether
the. Electric Bond az. Share Co. and the
Electric: Bond and Share Securities Cor
poraticn *were controlled by. the same
officers, .FeaGin said. 1.-The reSpective -ad-
nriniStrations~ were substantially the
same. =, Feagfn said he? held his position
tI both rganizations, Just as Smith had
said he was controller and assistant
secretary for both. Feagin; said the cor
poration owned all of, the Common stock
Of the company and some of the pre-
ferred stock, and that the great majority
of the preferred stock was owned by
the public. Questioned by Healy, he said
that the voting power of the company
was controlled by the corporation.
AS had Smith, Feagin said the Elec-
trio Bond & Share Co. performed many
services for subsidiary companies, such
as supervising financial organization,
etc. These services were performed by
contract, he said with many public
utility operating companies and some
holding companies.
Healy sought to develop what connec-
ton there was between these two
organizations when he started quiz
zing Smith, but Smith said he did not
know whether any other officers of
either company held the same position
in the other company He said he
could not name any directors either of
the company or the corporation. and
(Continued on Page 8. Column g.