Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-17
INVESTORS
TOENTERPOL|T|CS
influential Minority Plans
Defeat of Legislators Who
Destroy Savings.
BY DAVID LAWRENCE.

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activity planned for every congress
sional district, has been added to the
group of minorities, like the American
Legion and American Federation OF
Labor, which play part in congress
sionsl elections.
The new minority is composed OF
investors in the securities of electric
light and power and gas companies
and the objective is to defeat any
member Of Congress- who destroys
their savings.
President Roosevelt has endeavored
to assure investors that their invest
ments will not be adversely affected,
but the question of whether they are
or are not will be a question OF fact
which the voters will determine at the
polls on the basis of their personal
experiences.
Only One Vote Needed.
The campaign against the Senators
who defeated the Dieterech amend
meS1t has already begun. In that
instance only one vote was needed to
defeat the amendment. One Eastern
company has already sent out a let
ter to its stockholders, pointing out
that OF the two Senators in Its State
one voted to protect the interests Of the
investors and the other did not. The
letter goes on to say that only one
vote was needed and the inference
is that the Senator in question was
therefore responsible for the defeat
Of the amendment, which would have
prevented the death sentence" from
being applied to holding companies
The same argument may be made
in other States. too, for nobody knows,
Of course. whose single vote might
have saved the amendment from be-
ing written into the bill.
Over in the House the sentiment
against elimtna ting holding companies
Is extensive. though the same men,
bers who want the Senate bill modt-
fed In this respect are in favor Of
strict regula ton OF holding companies.
President Saves Day.
Only President Roosevelt's interven-
ton in the Senate situation saved the
day for the advocates Of holding COM
psnv destruction, and it may have
TO be invoked even more strenu-
ously to get the House to line up
likewise. This may be q more diff1cult
job for the administration than is
imagined by the lobbyists who repre-
sent the President on Capitol Hill.
There are many rumors current that
at the last minute some rather star
ting offers of administratio support
for prospective appointments desired
BY Senators and offers also of sena-
torial participation in the spending of
some Of the $4,000 100000 fund for
work relief in certain States did switch
at least four votes.
The fact remains that presidential
power over the spending of $4,000
900 900 creates rather awkward situ-
alton which will tend constantly to
give rise to such suspicious unless the
President commands his suoordinates
to quit Capitol Hill lobbying Other
wise the legislative branch of the
Government will inevitably become the
ready tool OF the executive branch OF
the Government through the use Of
money power of the most vicious char
Rcter.
Investors In Politics.
This very development is bringing
the investors into politics In a way
they never have entered before. Vari-
Gus members OF Congress, for instance,
have been shown lists Of voters rang
ing from 10000 to 10000 in their own
districts with letters revealing requests
that their investments be protected.
Under such circumstances 1t would not
be surprising If the House, all OF
whose members come up for re-elec-
ton two years hence. were more re-
Eponsive to pressure from the investor
voters than was the Senate, where
only one-third of the membership is
up in 1888.
The fact that even with presiden-
tial pressure of the most intense kind
and with a - 900. 900 900 fund in the
background. the Dieterich amend
rnent lost by only one vote. would
seem to indicate that the question OF
what to do about holding companies
is not as simple as 1t appears on the
surface.
Were 1t not for the high financing
and pyramiding and other objection
sble practices which have left their
trace on the public mind and which
practices are believed to have been
placed under the power of the secur-
tiles exchange law to regulate and
prohibit. it lie doubtful whether Con-
gress would eliminate the holding
company.
Blow at Holding Companies.
Then. entirely apart from the mall
practices Of utilities, which are bound
N be prevented in the main by the
regulatory features OF the new legis-
Istion. the President is aiming blow
at all holding companies. In the re-
cent debate administration Senators
we're quoted as saying that all holding
Compa MES were wrong in principle.
If the death sentence" is put into
the law and upheld by the courts.
many important holding companies
in nearly every line OF industry will,
of course, have to be dissolved. This
means uncertainty, possible loss to in
vestors during the transition. oppor-
tunltles Tor SPECTATORS TO pick up at
low prices the securities dumped by
frightened investors and generally
speaking. period Of chaos at the
very time when recovery is so much
desired by everybody.
The utility industry normally spends
81 900. 100000 a year in construction
and equipment but passage Of the
pending bill will prevent the utility
companies from resuming their pur-
chaSes and extensions until the whole
matter is threshed out in the courts.
From a practical standpoint. the
present bill and the other legislation
already passed regulating the issuance
Of securities take care of the abuses
uncovered by the Federal Trade Com
mission investigation of utilities. The
question of economies that remains is