Evening star., 1935-08-25
UTILITY MEASURE
SENT TOPRES|DENT
Hard.Fought Bill Compro.
missed, but Gives Roose-
welt Much Power.
BY the Associated Press

The utilities bill for which Presi-
dent Roosevelt wsged a months-long
battle with Congress was sped 70 his
desk last night from the Capitol Hill.
Compromises framed Its major is
sues, but the President, power inter-
measure of the holding company
abolition he demanded. On its long
journey through Congress, this issue
started Senate and House lobby in
vestigations.
Final action came swiftly. Only a
few minutes after the House accepte
the final conference draft Of the bill
by 222-to-l12 vote, the Senate did
likewise without even calling the roll
In broad outline, the legislation
provides a far-reaching system of
governmental regulation for both
holding and operating companies in
the power industry, with the Securi-
ties and Power Commissions en-
powered to supervise the fiotation OF
securities, sales Of power and financ
ing and operating methods in general
where strictly intrastate activities are
not concerned.
Holding Company ProyisO.
Most important of all, it calls for
abolition Of holding companies in
general with compromise proviso
that two holding companies may be
erected on one system of adjacent
operating companies. The holding
company restriction would become
effective January l, 1888.
With this provision, the conferees
settled the sessions outstanding battle.
The Senate bill had provided for
abolition of all unnecessary holding
companies by 1912. The House bill
left it TO the discretion of the Securi:
ties Commission to say when and
what holding companies should be
dissolved.
In addition, the measure provides
that subsidiaries and afiliates OF
holding company systems performing
engineering, accounting, construction
and other services for the operating
companies must do so at cost.
This clause was intended to end
alleged abuses arising from practice
under which opponents Of the utihties
have contended that the operatinG
companies were compelled to sub
scribe to such services and pay ex-
orbitant fees to the disadvantage OF
+ the consumers
Issuance of Bonds.
A third provision in the bill, which
provided source Of contention
throughout the shaping of the meas
ure, permits holding companies TO
issue bonds secured by a first lien on
their own physical assets or the
physical assets CT subsidiaries, with
the commission empowered to say in
| individual cases whether other assets,
/ such as common stocks might be sub
| stitued.
! In the final draft, a House amend
ment stipulating that the bills pro-
visions should not apply in any in
stances covered by State laws or State
commissions was eliminated. T.
! Senator Norris. Republican. Of Ne
braSka, veteran advocate of strict reg
ulation of the utilities companies, OBJ
jected to the conference report on til.
ground it legalized holding compa-
nies of the second degree.
Il would rather see this bill fai
than to legalize the existence Of hold
ing companies beyond the first de-
gree" he asserted. why We should
be so tender to defend system that
has ruined millions Of investors Is
more than can understand"
Chairman Wheeler of the Senate
conferees, who has fought side BY
side with Norris for years. contended
no legalization of holding companies
was involved. Second-degree holding
companies would be permitted, he
said, only when their existence was
| proved necessary.