Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-05-10
UTILITIES MOVE
TO ASSIST s. f. c.
WITH PROBLEMS
Committee of Five Named
by ID Holding Firms
to Cooperate.
SOUND, CONSTRUCTIVE
SOLUTIONS ARE SOUGHT
Proper Protection of Capital Now
Invested and Required Later
to Be Urged, However.
BY tie Associated Press.

w Nv SA6OO3 AAoWCfCA'
BY tie Associated Press
NEW YORK, May l0.-Executives
OF IA of the countrys largest public
utility holding companies today an
nounced they had created a commit
tee of five to cooperate with the Sc.
curities and Exchange Commission ito
bring about sound and constructive
solutions Of the problems confronting
these companies
The action, taken in response to a
suggestion from the s. E. c., was made
public today in the form of letter
addressed to w. o. Douglas, chair
man OF the S. E. c., dated May S.
The committee, according to the
letter, will present to the S. E. c. the
views of the utility executives in an
"efdort to ascertain what constructive
progress can be made to conform with
the integration policy of the Public
Utility Holding Company Act
Under section II of the act of 1895.
containing the so-called death sem
tence" clause. which was widely con.
tested before its passage, the S. E. C.
has broad authority to require changes
IN holding company structures.
Scope Restricted.
Subsection B" of this clause pro-
vides that holding company's scope
must be restricted to a single inte-
grated system and to such other op-
eratlons only as are allied with the
major business
subsection e" authorizes a holding
company, beginning last January /,
to submit voluntarily to the S. E. c,
plan of compliance.
The constructive" purpose of the
present committee is to work out such
plan with the S. E. c., under condi-
tions of mutual cooperation.
Protection in Capital
Inc committee, however, despite an
attitude of compromise. will urge
proper protection for capital now
invested in and hereafter required !"
BY the holding companies and their
subsidiaries.
The committee in so doing will nut
forward the belief Of executives of the
IL companies that 1.-THE fundamental
principle Of diversity of investment
which is represented here by both
geographic location of operating
properties and character of business
served by them, is q very important
factor in the raising of additional CAP
ttal," the letter said.
The letter to Douglas was signed
oy G. E. Groesbeck. chairman. Elec-
trio Bond e. Share Co., and j F.
Fogarty, president. the North Amer
lean Co. The other three members
OF the committee are: Wendell l..
Wlllkie, president, the Common
wealth e. Southern Corp. p. L. Smith,
president, Middle West Corp. and
john E. Zimmerman. president, the
United Gas improvement Co.
Preliminary Farley Held.
The letter indicated the committee
was formed after a preliminary con-
ference. and upon the suggestion of
Commissioner Robert Healy of the
3. T. c., as to the companies which
should participate.
Executives of the following COM
panies (besides the five named aboye)
met here and selected the committee
American Gas & Electric Co.. Amer
lean Water Works e. Electric Co.. As
ISOLATED Gas g. Electric Co., Cities
Service Power & Light Co., Columbia
Gas q Electric Corp. Engineers Pub
lie Service Co., New England Power
Association, Standard Gas & Electric
Co. and the United Light & Power Co.
A 18th company, Utilities Power &
Light Co., was not represented at the
meeting by reason of the absence of
Charles True Adams, in Washington
today comforting with the S. &c.
Letter Quoted.
The letter said:
We (Mr. Groesbeck and Mr.. Fo-
garty) repeated to the executives of
these companies the desire of the
commission to work with the holding
companies in an effort to ascertain
what constructive progress can be
made to conform with the integration
policy OF the Public Utility Holding
Company Act.
These executives expressed their
readiness to review the situation in
cooperation with the commission to
ascertain to what extent further geo.
graphic integration may be effected
with advantages to the public"
The letter went on to hold that the
Fundamental principle of diversity
Of investment" should be preserved
in the public interest"
The letter concluded:
I'VE have been requested to assure
You (Mr. Douglass of the desire of
those present at this meeting to CO.
operate with the commission in en-
deavoring to bring about sound and
constructive solutions of the prob
lens confronting these companies"