Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-11
Investigation Is Now
The Order of the Day
BY HARDEN COLFAx.

The investigation habit seems to
have a firm hold at present on official
Washington. Business men. who have
been called here in connection with
these activities of Congress and various
governmental bureaus and agencies, are
distinctly not afraid of investigation,
50 FAR as the facts that may be de-
veloped are concerned, but they express
more than q little anxiety as to the
effects that continuous probing over
long periods may have on investment
trends among the American people.
Business financing is q continuous
program. There Is no line of activity
periodically to keep itself abreast of
modern conditions. The raising of this
money, business men declare. is de-
pendent upon the absorption of invest
ment securities. Unwarrantable doubts
cast on any certain kind of security,
they declare, might have the same dis
astrouS effects as rumorS concerning
the stability of banks. The latter Is
prohibited by law. but that has not
suf1iced to keep the banking industry
out Of the list Of those to be investi-
gated.
On the other hand Congressman and
Government officials assert that con-
slant watchfulness is the only guar
antee of industrial and commercial
safety, and that If wrong policies are
adopted in basic industries they must
react to the detriment OF the entire
industrial body. They justify the in
Vestlgations on those grounds.
Perhaps the most widespread investi-
CATION that will be undertaken has Just
been authorized by the Senate. which
provided means by which the banking
structure OF the country Is to be thor
oughly scrutiniZed. The scope of the
Senate resolution is extremely broad,
taking in national State and private
banks, banking chains and branch
banks. 1t also provides for an inquiry
into what are known in senatorial
parlance as ''superbanks." The latter,
the Senate fears, might become an
outgrowth of the bank holding COM
panies now In existence and in process
of formation.
The Federal Reserve System will be
thoroughly inspected, but 1t Is q notable
fact that Treasury officials are eager
and anxious to lay the cards of the
national banks and the Federal Re-
serve banks on the table face up.
X X
It seems as though the words "hold-
ing company" cannot be mentioned on
Capitol Hill without causing a shudder
to pass down legislative spines. Men
closely identified with these companies
openly declare that this Is because
Senators and Representatives are I'M
able to distinguish between the various
types Of holding companies. They say
much the same condition exists as was
the case with the investment trusts.
The word trust" in previous years
was firmly established as meaning
monopoly, whereas investment trusts
are far removed from that stigma, at
least.
Railroad executives cite the difference
between railroad holding companies and
between utility holding and manage
ment corporations. The Chesapeake
Corporation. the main holding corpora
ton for the Van Sweringen interests,
Is said to be In effect merely stock
holder of the roads In which 1t possesses
an interest and all 1t can do is to vote
its stock. 1t has nothing whatsoever
to do with management. It cannot
transfer operation Of one road to
another. It cannot even shift an ex-
ecutive from one road to another with
out the consent OF the Interstate Com
merce Commission. None the less, the
railroad holding companies as well a.
the utility holding companies wifi nm.