Evening star., 1935-07-03
UTILITIES DISLIKE
HOUSE MEASURE
"Death Sentence" Carried
in Implied Form With
Commission.
BY DAVID LAWRENCE.

D1 LIN H. kA w AsA<ANo'
Anybody who thinks that there
were 256 members of the House OF
Representatives who favored the
utilities and only lat who stood On
the side of righteousness and all that
il holy in the realm of finance mis-
takes entirely the fundamental issues
involved in the most dramatic Incl
dent in the history of the present
Congress.
The bill just passed by the House is
by no means to the liking OF the
utilities. l. does not, to be sure.
carry the death sentence" for hold
ing companies contained in the Sen
ate bill, but it does carry contin-
gent death sentence. 1t requires that
the Securities and Exchange Com
mission shall be the executioner if it
finds unnecessary holding company
structures. And this commission is
appointed by the President and con-
sists at present of members who be-
lieve in the destruction of holding
companies.
But. it might be asked, why was
the battle so bitter? From the
standpoint of the utilities. they were
fighting for their lives. Were the
death sentence ordered and no dis
eretion left to a Federal tribunal, the
good and the bad among holding
companies would have to go out OF
business Their investors would lose
heavily and their organizations OF
personnel would go to pieces.
Shred of Hope Retained.
If the House bill should become
law, there is at least chance for the
problem to be tackled on basis of
discretionary power vested in a COM
mission whose acts will be renewable
by the courts, and thus arbitrary ac-
tion will presumably be preventable.
So while the utilities are deeply op-
posed to the House bill. they found
themselves forced to support it as the
lesser of two evils.
From the standpoint of members of
the House of representatives, they
were choosing between destruction of
investments of many of their con-
stituentS and an opportunity for the
tangled problem to be taken up in an
orderly way by Federal commission.
On such an issue it was natural that
the House would vote to protect con-
stituents and it always will be a
mystery why the President made it
a matter of such vital moment to his
administration when actually he has
already obtained in both the Senate
and House bills a drastic piece of
legislation that regulates holding
companies and apparently will pre-
vent repetition of the abuses which
prompted the public sentiment against
utilities
Lobbying Activity Hit.
Incidentally, the lobby done by
both sides, namely the administration
and the utilities. constitutes a chapter
in legislative happenings which is
open to severe criticism. 1t is not
suggested that bribes were offered,
unless, Of course, offers to help in
congressional elections, either by ad-
ministration favors or by campaign
funds. are to be considered as i'm
proper influence of that kind.
But most of the so-called lobbying
done by the utilities was presenta-
ton to each member of the House,
by some one of prominence in his own
district, of the names of the men and
women who stood to lose by the
legislation. In some districts as high
as 10000 names of share owners were
listed, so that a member of Congress
knew exactly how many enemies he
was making for the next election by
disregarding the interests of those in
Nestors in an entirely unnecessary step,
namely. the forced abolition of holding
companies by mandatory provision
Of law instead of by discretionary
action.
The President and the lat men
who voted with him wanted confisca-
tion of property. 1t is significant that
on this issue Mr.. Roosevelt lost The
House of Representatives is not yet
ready to confiscate property in the
interest of a theoretical advantage in
. political campaign.
The votes in the House Monday and
Tuesday mean that the Conference
Committee will probably accept the
House bill instead of the Senate YER
sion of holding company restriction,
which was adopted by a margin of
one vote in the Upper House. This is
unless the administration finds a way
to win over the conferees, something
that appears doubtful in the face of
the heavy House majority and the
calibre of conferees who now will be
appointed to represent the House.