Evening star., 1935-11-19
UTILITIES REVOLT
HELD AGREED ON
Registration Deadline Dec. !
May See Lines Form for
Legal Battle.
BY the Associated Press.

Virtually all utility holding COM
panies. it was predicted today in in
formed utility circles, will announce
shortly refusal to register with the
Securities Commission, as required BY
the holding company act, by Decem-
ber /.
This would be the signal. 1t was
forecast by an authoritative spokes-
man, for 100 Of the leading COM
panies to ask the courts to halt en-
forcement Of the act, thereby bring
ing about a major legal battle on a
wide front.
After December they would, theo-
retically, become subject to the acts
penalties for not registering. Imme-
diate effective administration Of the
statute would become virtually impos-
sible. and might turn largely on
efforts to force compliance.
The utility spokesman, who declined
to be quoted on the ground he could
not speak for the entire industry, con-
ceded there was a possibility of last
minute changes by few companies.
Even this; he contended, was highly
improbable, unless new and unpre-
dictable elements enter the situation.
The utility act is designed to pro-
vide Federal control over the inter-
state utility field. and to eliminate
unnecessary" utility holding COM
panies.
New Argument Advanced.
A new argument against registra-
ton by the holding companies with
the Securities Commission was ad-
vanced yesterday by Dr.. Hugh S. Ma
gill, president OF the American Feder-
alton Of Investors.
The best legal talent" he said in
a statement, seems TO be quite unani-
mously of the opinion that If the COM
panies register under this act they
will thereafter be deprived Of the right
to carry on even the normal processes
of their business without bureaucratic
approval. and that they will thereby
seriously impair their rights to protest
in the courts against the unconStitu-
tionality of the act.
Under the express provisions Of
this utility act it Is an offenSe puniSh-
able by fine and Imprisonment for
any person employed or retained by
any registered holding company, or
any subsidiary company thereof, TO
present, advocate, or oppose any mat
ter affecting any registered holding
company or any subsidiary company
thereof, before the Congress or any
member or committee thereof, or be-
fore the commission or Federal Power
Commission, or any member, officer,
or employe of either such commission
unless such person shall have secured
permission from the commission so to
do by complying with certain rules
which the commission may lay down"
May Seek Injunctions.
The utilities spokesman who would
not be quoted said he expected the
companies to seek injunctions against
enforcement Of the act at about the
same time in Federal courts through
out the country.
The initial suits later may be Joined,
or the utilities and the commission to-
gether may agree on one or more suits
TO test the acts legality.
The utilities, he said, believe their
action is warranted by the legal doubt
cast on the validity Of the act BY the
all-embracing decision in Baltimore
Federal Court that it is unconStitu.
tional.
Registration on December I, in it.
self, means simply the filing Of in
formation about company's financial
and operating structure, together with
a notification of intention to register
more fully later. Full registration
would enable the commission to deter
mine what companies should be per-
mitted to live under the act.
The commission has guaranteed in
itial registration would void no legal
or constitutional right, but the utilities
were said to believe past court de-
cisions indicate the commission cannot
legally give such q privilege.