Evening star., 1936-08-16
Utility Companies, Prospering,
Wage Battle on Holding La,o
Opponents Say Firms Are Flourishing
Because Act Is Almost Imperative
Because of Court Action.

The public utility act Of 1885
with its much-debated death sen.
-tence" provision-has been on the
statute books for a year this month
and so far not a single utility COM
pany has been forced out of business
Utilities, in fact, are flouriShing
More electricity is being produced and
consumed now than in 1929 Stocks
of both operating and holding COM
panies are higher than they were
when the legislation was enacted.
Capital issues have been successfully
marketed. Rates are lower. Custom
ers are more numerous.
The enemies of the act, and they
are legion, say this is because it has
been made virtually imperative by
court action for the present, and will
be knocked out like N. r. A. and
A. A. A. when the United States Su-
preme Court passes final judgment on
its constitutionality. New Dealers say
It Is because of greater confidence now
that Federal regulation is a reality;
because it is realized the Government
does not intend to wreck the in
dustry; and because many abuses have
been corrected.
Wheeler Explains Purpose.
Senator Burton K. Wheeler of Mon
tana, sponsor of the act in the upper
chamber, said it was intended to
&hittle down and eventually eliminate
holding companies. This has not been
accomplished, although there have
been some changes in corporate struc-
lures, directorships, and inter-com-
pany relationships. Utility represen-
tatives said passage of the act would
destroy the industry and cause the
loss Of hundreds Of millions to in
vestors. Their dire predictions have
not come true.
When the act was passed, holding
companies. which are defined as COM
panies controlling as much as 10 per
cent of other companies, were required
to register with the Securities and
Exchange Commission by December
i, 1895, as the first step in coming
under Federal control. The utilities
baked, and after conferring with the
g. e. c. announced fatty they would
not comply with the law The Gov
ernment accepted the challenge, and
in the last days of November filed a
suit to compel the Electric Bond &
Share Co. to register. This company
was selected because it was regarded
as a typical holding company within
the meaning of the law, with proper
ties scattered from one end of the
country to the other. S. E. c. an
nounced that pending the outcome OF
the litigation it would not prosecute
other companies for failing to register
Agreed on Stipulations.
The company and the Government
IN subsequent conferences agreed on Q
set of stipulations-points at issue
and these went to Judge Julian Mack
OF the Southern District of New York
in July. Soon thereafter Judge Mack
left for Europe with a trunkload o1
documents pertaining to the case
which he was expected to study dur.
Ing his absence. When the Judge re.
turns, probably this Fall, there may
be oral arguments, with the Govern.
ment and the organized utilities put.
ting their best legal talent into the
battle. Thereafter, whatever the de.
cision may be, it is expected there will
be an appeal to the Circuit Court anc
from there to the Supreme Court.
At best, a decision will not come
within year, and it is possible sew.
eral years will elapse before the fat,
OF the law is definitely pronounced.
Utilities, meantime, have obtained