The Western news. [volume] (Libby, Mont.) 1933-current, 1935-01-24
SEEN and HEARD
around the
National Capital
by CARTER FIELD

) -B BY CARTER FIELD--
Westinghouse drive against "rack- |
cts In s0-called protective committees
of stock or bondholders of corpora
lions, especially those In receiverstaps,
is ahout To begin us an altogether TIM
expected development of the securities
and exchange commission activities.
Every,investor has realized for some
time that there were grave abuses
In these committees. that they ran up
fees and charges even when they were
legitimate, und that all too often their
main purpose WIS to he bought off by
those really trying to revamp the cor
1 poratlon In the interest of the stock
holders.
So far there Is no indication that
the commission Is going any further,
but Its reports to congress. which will
be nude In few months, will, accord
Ing to very reliable sources, at least
sturt move-whether II gets very far
or not-at doing something about the
high cost of recelverships.
For the present the commission is
aiming chiefly at men who have made
practically business Of petting I'M
thinking stock and bondholders, al
ready faced with the prospect of losing
part of their Investments to go Into
moves which benefited the operators,
but In the long run only Increased the
loss Of the investors.
The next logical step, senator's ia
mlllar with the plan declare, is TO go
after the perfectly exorhtant legal
and other fees being charged for adj
minstering financially crippled or
ganizatInns.
One senator cited case where
hotel property Is being administered
by three lawyers no one Of whom ever
had any experience In the hotel bust
ness. bur who are being paid Sl0tsW
year each for their services In direct
Ing this property's operations. Actual.
ly. of course, no one of the three de-
votes very much time to the actual
operation OF the hotel.
Hits Bondholder
The point this senator emphasized
Is. what chance does stock or bond
holder have Of getting anything when
a property, already crippled or 1t
would not be In receIvershIp, has this
additional load put upon tl
~ r. ,.Fe
office building where two lawyers,
after performing very minor legal
service for one Ut the hnndhoders' pro-
tective committees. sent bills for $l5.-
particular office building had possessed
100000 vi the tinlp-just the tutHi nt
this lawyers bill--it would not have
had to 60 into receivership at all
And 1t 80 happens that there are sew
eral other protective" committees up
Grating ut the moment in behalf. al
legedIy. of the b0ndholders OF this par
ticular enterprise.
THE trouble about anything per
manent being dune,"the senator re
tiIAthIAt Ia AiiAt tnSiC dAE Wv Hfaii.
lawyers In congress. happen 10 h,
one myself, but the fact Is-and II ynl
quote me by name | will deny | evel
had such a thonght-the boys do sticl
together And the Judges who npppn
receivers and who pass on the fees o
attorneys for protective committees
are all lawyers. do nor know JUS
what ought 10 be done about 1t. hn
certainly II has approached the Stag
OF scandal And beyond the shade,
OF doubt the property OF investor
who are unfortunate enough to hav
put their money In enterprises whic
get into receiverahirs. Is actual
looted by the present system.
hope that what the securities commits
sion starts will bear fruit"
New Dealers Fused
New Dealers are torn between prid
and alarm over the action OF New ior
state electric companies In pruposir
substantial reduction In rales The
are proud that President K.nspvelt
policy of doing everything possible
%iessen the cost OF electricity 70 co
sumers ID meeting with such success
They are little alarmed MS to VIII,
these particular cuts In This partcnli
territory may do To the fight appruac
Ing In the senate over ratification
the st. Lawrence senway treaty.
Not that the vutes OF the New Yol
senator's are involved Both Ut the
are strongly against the trenty. III
are expected In stand nrmly again
II regardless OF the power questio
Their cpncern Is with the port Of Ne
York. and the railroads eadIl
through New York state to IT, and wi
the Erie canal The question
cheaper power ID very mild In Il
portnnce Indeed to them In Contra
with the threat To Tile prosperity
their big pnri and the communicate
lines lending 10 H.
lsIH this elit IN power rates In M
York Nate, presuHn,sina further "a
Inter m. hits very serimss blow
the rr,tteci as whole, 81 To Spp,
II makes far more difficult the prnhl.