The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-02-08
BILL TO SMASH
HOLDING FIRMS
ISFIRST WEDGE
Proposal Is EnviSaged As
Opening of Assault on
Concentrated Wealth.
BY THOMAS L. STOKES
Times Special Writer

WASHINGTON, Feb. 8.-The Ad-
ministration's bill to break up and
then dissolve giant utility holding
companies was envisaged today as
the major assault on concentrated
wealth and power toward which the
President has been slowly moving.
For, it was learned, this measure
is to be followed later by one which
would eliminate from all other fields
the holding company device, by
which few men, often on shoe
string, are able to control vast cap
ital and WELD great political in
fluence.
President Roosevelt thus carries
on the campaign aimed by the 9TH
err Roosevelt at trust busting, but
which proved Intellectual since the
masters of wealth capitalized the
apathy of the public and contrived
ways to evade the law
If the President has his way. the
era of bigness will be over and the
economic pattern of the country will
resolve into a series of smaller de-
signs-the objective being not only
greater efficiency, but also a simpler
economic unit which can be con-
trolled.
Much meaning lies behind a
phrase in the elaborate bill which
speaks of "a geographically and
economically integrated public util-
ity system"
Great Systems to Split
This means that in the next five
years, when the public utility hold
ing company is to be dissolved by
fiat, the great systems which span
the country are gradually to be
broken up into smaller units each
serving only that territory which it
is economically fitted to serve.
This breaking up process, which
is to be directed by the Federal Pow
er Commission, also has its practical
aspects. 1t will be necessary to
break up the holding company set
ups in order to dissolve them within
five years. They will have to be
taken apart and simplified so that
they can be eliminated, as a prac-
tical matter.
AS a result, the power commission
will exert constant pressure. 1t
is directed to make studies and rec
ommend simpliflcation of both the
holding company and operating
units, now SO vast and SO intercon-
nected.
Lower Rates Likely
Completion of the process in five
years, under bill, would find small
operating units serving limited ter
ritories. Just how small or large
they will be, how many states they
might serve, can not be ascertained
until the setup is analysed. There
will be no uniform size in the end.
Size will depend on economic justi-
f1cation.
The bill also imposes, through the
power commission and the Securities
and Exchange Commission, regula-
ton which will protect the inves-
tor and will tend to reduce rates.
The fees and charges by which
holding companies have drained
profits from operating companies
are banned. Nothing apparently
was overlooked in the 60-page meas
ure upon which Rep. Sam Rayburn
Cd, TeX), chairman of the House
Interstate Commerce Committee,
soon will begin hearings.
Mr.. Rayburn, in a statement, en-
phasiZed it's objective of breaking up
concentration of wealth and power,
as did Senator Burton K Wheeler
Cd, MONTH, chairman of the Senate
Interstate Commerce Committee,
who introduced an identical bill.
Small Group Controls Billions
"The holding device has been
pyramided to give a few small but
powerful groups control of the bill
lions of dollars of the public's money
invested in the utility industry" Mr..
Rayburn said.
Such intensif1cation of economic
power beyond the point of proved
economies not only is susceptible of
grave abuse but is form Of private
socialism inimical to the functioning
VI OeAAOCI dC1C 4llSCICuCiO1lS anu GIIe
welfare of a free people"
Concentration Of economic power,
Senator Wheeler declared, lis grow
ing today faster than it has ever
grown before.
MANY believe we can not reverse
that trend. 1 think we can-if we
think clearly and let our minds be
bold. I think we must-if we are to
avoid Fascism or Communism with
out being sure which of the two we
! oct