Evening star., 1935-11-08
Utility Opinion Summary
Federal Judge William c. Coleman Rules Holding
Company Act Unconstitutional.
Nv the Associated Press.

BY the Associated Press.
BALTIMORE, November s.-Federal
Judge william c. Coleman's sum-
mary of his opinion holding the hold
ing company act unconstitutional
follows:
l. The question as to the validity
of the public utility act has been
directly and properly raised. There
has been no collusion between the
parties. There is real and not
fabricated conflict of parties and
interests. There is nothing prema-
ture about the proceedings. On
the contrary, there Is an actual,
pressing need for a prompt ruling
upon the. acts validity, because OF
the fast-approaching date when
the act, with its multifarious. draS-
tic requirements, becomes effective,
and because until such ruling Is
had it cannot be- determined
whether the pending reorganiza-
ton proceedings are futility, or
should be progressed to a con-
clusion, as this court has directed.
2. The public utility act is in
valid in its entirety for the follow
ing reasons:
A. Congress by its enactment
has f1agrantly exceeded its lawful
power under the commerce clause
of the Constitution in that the
provisions of the act are. neither
by their express language nor by
any reasonable implication, capa-
bic of being restricted to the regu-
lation of public utility holding
companies and their subsidiaries or
affiliates, when engaged in inter-
state commerce or in transactions
that directly affect or burden in
terstate commerce. The act aims
to regulate virtually everything
that such companies do, intrastate
as well as interstate. All OF the
companies before the court are
embraced within the acts pro-
visions, although none of them
does any interstate business. or
is engaged in any intrastate busi-
ness that directly affects or bur-
dens interstate business.
Denies "National Public Interest"
The theory upon which the act is
predicated is that public utility
holding companies and their SUBJ
sidiaries are affected with ma
tional public interest" But under
the Constitution there is no ma
tional public interest" which per-
mits of Federal regulation, unless
the person, corporation or thing
affected with such interest IS, in
fact. involved directly, not indi-
rectly, in some activity over which
the Federal Government, through
one or more of the powers delegated
to it by the Constitution. has juris-
diction. If the Constitution be
construed to permit what the pub
lie utility act aims to accomplish,
then Federal authority would en-
brace practically all the activities
of the people, and the authority
of the States over their domestic
concerns would exist only by suf-
ferance of the Federal Govern
ment.
B. Congress, by its enactment,
has exceeded its lawful authority
under the postal power granted to
Congress bys the Constitution, in
that the act arbitrarily and un-
reasonably denies completely the
use of the mails to all persons
and corporations embraced within
the act with respect to all of their
activities, as a penalty for non.
compliance and a means of COM
pelling compliance with the acts
requirements, regardless of whether
any particular use of the mails
for any particular thing mailed is
IN fact of such character as rea-
sonably to warrant exclusion. That
is. the exclusion bears no relation
necessarily to the use itself. but
to the user of the mails.
S. E. C. Clause Held Arbitrary.
~. SOIlsIcSo, ny 1Io CIldClulcIlI,
has f1agrantly violated the require
mentS of due process of law under
the fifth amendment to the Con-
stitution in that many of the acts
provisions are grossly arbitrary,
unreasonable and capricious, be-
cause of the penalties which they
impose for non-registration with
the Securities and Exchange Com