The Waterbury Democrat., 1932-11-02

minister the law in respect to se- curities. Just before the Coolidge commission went out of offlce Mer- Till obtained, on February 2Sth, its approval of an order by which he could bring. power companies oper- ating under lease to a show down. This was order No. 2S, since held as a commission secret as far as possible.
 "Order No. 2S"
 For the. benefit of critics who may doubt the credibility of this article I shall here quote a portion of the order:
 Tt is HEREBY FURTHER
 ORDERED that no such licensee
 proposing to issue securities for
 the purposes or with the effect
 hereinabove named, shall issue
 such securities or enter into any
 contracts or obligations for such
 securities or enter into any con-,
 tracts or obligations for such is-
 suance unless notified meantime
 by the commission that 1t does
 not propose to exercise its juris-
 diction to regulate such issuance;
 and, in the event the commission
 shall, either upon complaint or
 upon its own initiative, notify
 such licensee of intent to exer-
 else its jurisdiction to regulate
 such issuance, such licensee shall
 not issue such securities or enter
 its contracts or obligations for
 such issuance until the amount
 or character of such securities
 has been approved by the com
 mission"
 Even a layman can understand that under this order no operating company could issue millions of wind and water on a public site un- der lease. Those familiar with f1- nance will understand that no holding company acquiring an op- erating company under lease would dare to issue, say, $15,000,000 or O,0O0,000 in securities against properties on which the federal power commission had permitted the issuance of only $5,000,000 in securities. (Such things have been done). Further, that the prece- dent set by the federal government would have a profound effect upon state commissions and the issuance of securities by ali utility com panies not subject to the power act. The order was belated attempt to enforce the law and was of great moment for the public welfare.
 But an incredible thing happen ed. It fell afoul of Hoover's pro- power trust commission, consisting of Secretaries Good. Wilbur and Hyde.
 Secretary Merrill mailed Order No. 28 to companies under lease on March 11th, the order being effec- live May 1st. But power barons and even three state utility com missions, subservient to power in- terests, at once brought pressure on the president and his commis- sion. It got results. At the first meeting of this new commission 1t indefinitely postponed" Order No. 28 and adjourned. It was the only real business transacted at that ses- sion, which was called for that purpose. Thus Merriips effort was buried. on the plea that the licensing of sites and other matters should have first attention. A new. full time commissions was created and took office December, 1880, with pr George Otis Smith as chairman. This commission like- wise has left Order 28 lie dead. , An idea of what all this means may be gained from a glance at the only instance in which a fed- eral power commission has exer- cises its right under the law to regulate securities. In the case of the great Conowingo dam in Mary land there was forestalled the is- suahce of approximately $11,000;- 900 of proposed securities that would have had no base under them save water and air.
 Secretary Merrill knew well the importance of regulating securities. He talked with me a great deal about it. It is well understood that when Order No. 2S was ruthlessly murdered he perceived the utter of any proper admin istration of the power act under the Hoover regime and resigned on that account.
 Chief Accountant William V. King and myself, and others. were aware that millions of dollars of