The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-05-19
HOLDING FIRM
MEASURE SOON
TO FACE TEST
June IS Set for Argument
on Much Disputed
Utility Law.
BY RUTH FINNEY
Times Special Writer

WASHINGTON, May 19.-On
June IS, a little less than year
after its stormy passage through
Congress, the holding company act
will start its journey through the
Federal Courts.
Arguments begin on that day in
the test case brought by the govern
ment against the Electric Bond g.
Share Co., which refused to regis
ter in compliance with the act.
The case will be heard by Judge
Mack OF the United States Circuit
Court of Appeals in New York.
Simpson, Thatcher 81 Bartlett rep
resent the holding company:
Thomas Day Thatcher, United
States Solicitor General in the
Hoover Administration, will appear
for them. The government will be
represented by Judge j. j. Burns,
of the Securities and Exchange
commission, and Robert H. jackson.
assistant attorney general.
Headed for High Court
For six months preliminary legal
sparring has been in progress. The
holding company filed a cross bill,
and the government an answer. At
torneys have been working on
stipulations. Seven other holding
companies in the Electric Bond e.
Share group have been allowed to
intervene.
This is the case which will 60
eventually to the Supreme Court for
ruling on the acts constitutional
ity. A score or more of other cases
brought by companies, are quiescent.
The Supreme Court refused to give
q ruling on the basis of the Edison
Electric Institutes case, in which it's
attorney, John w. Davis, appeared
as counsel for creditor of bank
rupt Baltimore holding company
The government was not party to
this case.
Indefinite Stay Granted
Suits against the government were
started by companies in half dozen
cities, but the courts sustained the
government in it's refusal to let itself
be sued outside the District of Co.
lumbia.
Seven or eight companies sued in
the district, but the government
asked an indefinite stay pending de-
termination of the Electric Bond and
Share case, and the stay was
granted. An appeal from this de-
cision of the judge is pending in the
Court of Appeals here. This is the
only other action which might reach
the Supreme Court ahead of the
Bond and Share case. But ruling
on the stay would not cover consti-
nationality of the act.
Meanwhile the Securities and Elk
change Commission IS proceeding
with administration of the act as if
all holding companies had regis
tered instead of only a dozen or so.
Companies that did register, of
which the largest is Middle West
OIlllGleS, 1pIIllcIly VI GllC AAlouAA
group, have taken what the SEC
describes as a ''rlost helpful atti-
tude," advising with commissioners
on preparation of regulations.
Other Requirements of Rules
Regulations have been formulated
governing the establishment of serv-
ice companies to serve utilities, is
suance of new securities and mer-
gers. The regulations permit estab-
lishment of mutual, non-profit
service company, or of profit max
ing companies under certain con-
ditions.
Regulations covering issuance of
securities call for only few addi-
tional requirements in addition to
those specified for registration of
securities of any company.
The SEC has also promulgated
rules covering appearance of hold
ing company officials before it and
before Congress, and the Federal
Power Commission, as required by
the act. Officials are required to
state the names of their employers,
the character of their employment
and the amount Of their compensa-
ton.