Evening star., 1933-02-11
Appropriations Committee
Adds to House Amount for
Federal Trade.
ACTION BRINGS TOTAL
SUM UP TO $70O,O 900
Billion Dollar Independent Offices
Supply Bill Also Reported
Favorably.

The Senate Appropriations Commit
tee today increased Federal Trade COM
mission funds for the next fiscal year
from $500,000 as approved by the House,
to $7so,00o, to permit the Commission
to continue its power utilities investiga-
ton.
The committee thereupon reported
favorably the biilion-dollar independent
offices supply bill, which carries the
Trade Commission funds and money
for the Veterans Administration, Farm
sion, and other independent Federal
agencies.
Stock Watering Claimed.
Members of the Trade Commission
had told the Appropriations Committee
yesterday the commissions Investigation
Of power and gas public utilities had dis
closed up to date the deliberate water
ing" Of capitalization In excess Of ST.
Upon nearly all Of this inflated CAP
italization, they said, securities have
been issued and sold to the public.
This statement was made by the COM
missioners as part Of their testimony
opposing q reduction Of the annual ap-
preparation for the commission which
the House cut from $1,100, 900, the
budget estimate, to 100000.
A delegation from the National
League of Women Voters also appeared
before the Senate committee and pro-
tested against the cut in appropriations.
They insisted the commission was the
chief agency Of the Government defend
ing the American consuming public.
Discussing the power inquiry, the
statement Of the trade commissioners.
placed in the record OF the committee,
said:
Propaganda Exposed.
The commission has exposed the
vicious propaganda Of the utility cor
porations through colleges, schools, gov
ernmentai agencies and the press. 1t
mas disclosed the use by many utility
concerns OF the most unreliable and in
accurate forms OF accounting It has
SHOWN an extensive padding Of costs to
operating companies through exorbitant
ices charged for alleged services by
holding companies, such fees amount
Ing In some instances to IL per cent of
the cost OF all additions, improvements
ana requirements, and giving to the
noiulng companies profits of over 100
per cent at cost to the operating COM
panies OF millions OF dollars.
1t has exposed capitalization of the
earnings Of subsidiary companies. It
mas shown an imitation of capitalization
by deliberate appreciation or write-,Ip
OF assets OF more than 81 .000, 900 900 in
the concerns that to date have been put
IN the record, upon nearly all Of which
securities OF some kind have been issued
ana SOLO 10 the investing public. These
clements enter into and constitute a
part Of the base upon which the rates
Wnlch the consumers pay are estab-
Asneo. It has disclosed retention of
controi OF large number of operating
companies by a small group through
conlfol OF the common stock of holding
companies and the issuance of non.
Voeing or preferred stock to the public
Bureaus Abolished,
AS direct result OF the commits
Sions investigation most of the utility
information bureaus in the States for
the preparation and dissemination of
propaganda have been abolished. MANY
OF the utility companies have alreadv(
reversed numerous improper entries and
practices, and have largely reduced oA
anoilshed so-called management and
ASSS- nddAly CONCERNS nave re-
ouced substantially the amounts of an
preciation or write-ups (watered stock)
One concern upon which public
hearings were recently held had at the
tlme the commission analyzed its rec
oros In preparation for the public hear.
lngs Sl02,000,000 of write-ups, or an
probation. When the public hearing
was held this appreciation had been re.
duced to $30,000,000.
In a large number Of instances rates
TO consumers have been reduced fol-
lowing the commissions Investigation
and exposure of the elements that had
oeen incorporated into the base upon
which the previous rates had been
established. These changes have re-
suited in direct savings to the public of
millions of dollars. One company has
stated that $2,600,000 had been saved
IN two years by residential customers
as result Of a reduction by it In
rates after the commissions inyestira-
ton. Detailed information as to these
Things can be furnished If it Is de-
sired"
Chairman March Of the Trade Com
mission and Commissioner Ferguson ap-
peared before the Senate, submitted the
prepared statement and also made oral
argument against proposed cut in the
appropriations for the commission.