Evening star., 1935-11-22
UTILITIES UNITED
FIGHT UNFORESEEN
New Deal Hardly Expected
Concerted Attack on
Holding Act.
BY DAVID LAWRENCE.


The public utility holding COM
panies have determined to ask the
courts to say whether the death SEN
tence" shall be visited upon them.
Their pleas for protection Of prop
erty rights having been denied by the
executive and legislative branches of
the Government. the utilities now ask
the judicial branch to declare
whether a Federal commission shall
have the discretion to choose which
companies shall live and which shall
die.
The Roosevelt administration hardly
expected such q united front as the
holding companies are showing in
their filing of law suits to test the
law, or such an aggressive assertion
Of rights. The penalties for refusing
to register by December / are severe,
but many Of the holding companies
feel they are doomed anyway If they
register and might not be doomed If
the courts say the law Is unconstitu-
tional.
Able Lawyers Say Law Void.
Some of the ablest constitutional
lawyers In America have advised the
utility holding companies that the act
passed by Congress last Summer after
bitter fight is wholly invalid and
the situation is Just the same as If
there were no law on the subject on
the statute books. It is, therefore, a
question Of whether the utilities are
defying law or whether they are
asking the Judiciary to protect them
from the defiance of their rights by
Congress and the President.
Only the Supreme Court can finally
answer that question. The Securities
and Exchange Commission was willing
to specify in writing that a company
which filed a registration statement
would not be waving its constitutional
rights, but the utility companies have
had no faith in the promise, since
pledge Of this sort had already
been violated in another branch oi
the Government and litigation started
Just the same.
This is because the S. e. c. ha:
| no authority under the law to binc
other agencies in the Government no
to prosecute the utility companies
and the utilities would not be ablt
to challenge the action on the grounc
that it was unconstitutional.
Fight May Stir Congress.
The effect of the decision by ths
utilities not to conform to the re.
| quirements of the new law will, or
the other hand, stir up Congress!
next session to further efforts to finc
a way to regulate or destroy holding
companies. The idea of taxing the
utilities holding companies out o1
business has been suggested, but on,
of the difficulties is that law which
destroys utility companies and yet
preserves holding companies in othel
lines of business can hardly be up.
held as constitutional.
The Federal Court in Baltimore has
said the new utility law is invalid ir
its entirety and it is on the basis oi
that decision that the utilities are
refusing now to put themselves in the
hands of Federal commission. The
S. E. c. has been charging that the
Baltimore case is not a good test
But the lawsuits being filed this week
directly attacking the validity of the
act, will furnish q real test.
The suits have taken the form oi
enjoining the Government from de.
nying the use Of the mails or other
instrumentalities of interstate com.
merce to companies that fail to regis
ter. During the interim the litiga-
tion is going on all penalties would
be stayed by court orders.
This is q clumsy way to test the
validity of an act of Congress, but
under our judicial system, it's the
only way. The administration, oi
course, can hardly criticize anybody
for going to court to find out what
are his rights, because, after all. the
risk Is entirely on the petitioner II
it is proved that he has violated the
law.
tCopyright, 1850