The Washington times., 1935-04-05

~ Cnorougn regu'
NsSSS lation. They
Lewis Aaney state that hold.
ing companies, rather than being
destroyed, should be regulated.
For example. Mr.. Wilkie, Of the
Commonwealth and Southern
company, advocated complete reg.
ulation Of accounts. security issues
and rates.
He would sever holding COM
pany connections with subsidiaries
which supply materials to opera
ting utility companies, and would
require that services" to subsid-
larry operating utility companies
be furnished at actual cost.
He would require that localities
served be adequately represented
on boards of directors and in the
administration of the companies.
The point is that the advantages
Of holding companies can be re-
tanned, and at the same time.
abuses can be prevented by regu'
lation.
Again it has been made clear
that one motive of the Admins
tration in trying to force this de-
Structive bill through, is to pro"
tect its public works" experiment.
and to build up a system Of fed
orally controlled utilities.
Thus Mr.. Inch, Of the EIec-
trio Bond and Share Company
points out that the bill Is de-
signed "to provide outlets for
the Government power plants
now being built and those which
are to be built" He quotes Fed
eral officials to prove this IN
tent.
Clearly, the destruction OF hold
ing companies would cause the
failure of many local operating
subsidiaries. These would prob.
ably be driven into the Govern"
ment's hands.
Another point to be noted Is
that the utility companies frankly
challenge the New Dealers to
come out and compete with them
on equal terms. They affirm
that they can furnish electricity
cheaper than the Government
can. and I believe that most OF
them can.
If the Government would count
all its costs, charge interest on
it's investment, and quit drawing
on taxpayers money to meet
charges against utility services, the
private companies would under.
sell it. One utility officer stated
that if the Administration would
guarantee his obligations as It
does those of the IVA, he would
reduce his charge for service
80 1.3 per cent.
Mr.. Inch was particularly eff
fective in showing up the New
Dealers claims that no real
wealth would be hurt by the bill.
He boldly challenged them to
produce any case in which any
important holding company could
be destroyed without loss to the
stockholders.
He is right. If the New Deal
ers are in good faith, let them
submit in detail a concrete plan
for "liquidating" one Of the big
holding companies. Let them ex-
plain to the people exactly how
it can be done without running
hundreds Of thousands Of 1nno-
cent security holders.
If this bill were enacted, the
holding companies would imme.
diately cease to be "going con-
Germs" They would practically
be through. Their one remaining
job would be to liquidate their
assets. But their stocks represent
their value as going concerns.
After their bonds had been liqui.
dated, there would be little. II
anything, left for stockholders.
Furthermore, many operating
subsidiaries are being financed
by the holding companies through
loans and otherwise. The destruc
ton of the latter would fore
many local companies into r.
ownership.
Remember, this holding con
pany bill goes much deepe
than appears at first glance
1t Is part Of the New Dea
scheme to put the Federal Gov
eminent into business, and fas-
ten upon the nation an octopus
Of bureaucracy which would
grow until there would be no
individual wealth left to share
and no free individuals to
share it!
After the public utility hold.
ing companies, what next?