Identical bill into the House of Representatives (H.R.5423), is Chair~ Jman of the House Committee on Interstate and Foreign Commerce. The Rayburn-Wheeler Bills, as they Jare called, carry therefore influential support. They endow the Administration with such sweeping, powers that they will surely meet strong opposition from the representatives of the public utility com~ panies, some of whom have already described the proposed legislation in its present form as "grossly unfair and unjust". The purport, of these Bills has already been communicated by the cables and as, obviously, the matter has special interest here where various speculations regarding them have been vouchsafed. Nor do these Bills exhaust the troubles of the public utility companies, for the Administration is also' credited with an intention to introduce legislation for depriving public utility holding companies of part of their present exemption from income tax on dividends from subsidiary corporations.
The—Rayburn-Wheeler Bills propose to subject all electric and natural gas holding companies to rigid control in order, it is said, to. simplify holding company structures, to exclude extraneous or speculative ventures from the investments of holding companies, to impose a standard form of accounting, to control future security issues and future acquisitions, to separate gas and electric properties, to eliminate all profit in the dealings of a holding company with its subsidiaries, to establish rigid control of all dealings between companies having interlocking directorates. It is clear from this brief summary that Senator Wheeler's terse description of his aims is justified. He is definitely seeking to destroy the big monopoly. Indeed, the basic principle on which the public utility company was originally commended to national favour is being assailed. The alleged sins of these companies are thus held altogether to outweigh their merits in providing the advantages of cheap service, efficient avoidance of overlapping and protable security for the small inves for. A Bill is not an Act and the drastic character of this legislation makes it reasonable to suspect that it may undergo some radical changes before it reaches the statute book. Already its critics have recalled the fact that President Roosevelt has paid a strong tribute to the benefit of "bigness" in respect of the American Tele~ phone and Telegraph Company and. the Bell System. It is pointed out that what is sauce for the telephone goose is sauce for the electrical gander. The public thoroughly understands the advo-stage of an ef~ cient telephone service protected against the "juggling" by numerous, competing and conflicting corporations. It is, therefore, argued that electrical power cannot give -its full beneficence to the country until energy "ebbs Great Britain has lately learnt from America and has followed to marked advantage, has to be re-taught to the country of its origin.
The Bills are supposed to be mainly reformative in their intent. Their critics allege that, under cover of this amiable purpose, which is perfectly within the scope of such existing organizations as the Federal Power Commission established in 1928, the Federal Trade Commission and the Securities and Exchange Commission, their political godfathers really desire to destroy "hundreds of companies: [that are utilities in the fullest sense of the word and represent the savings of millions of people". And the inspiration is alleged to be resentment against "a few bad utilities" which already are brought fully within official powers of correction. The proposals against which the public utility companies are specially directing criticism include a provision that "no public utility holding company may engage both in domestic and foreign activities." It is not clear whether the term "foreign" refers to business abroad. Some argue that it does. Others say that it means "as between states rather than business abroad." Until the Bills come under the care of the official draftsman this point may remain obscure. In the meantime, The Electric Bond and Share Company has interpreted the clause as meaning that that com-Dany would have to divest itself of its holdings in American and Foreign Power Company Inc. The Company has addressed its stockholders and urged that it is highly unfair that they should be compelled to divest themselves of their invest ment which has been so. dificult to built up and which has been an activity with great benefits to American labour, Probably the only.
market where such an investment could be disposed of would be to foreign interests and then only at a great sacrifice to American investors and loss of business to American factories.... Just as in the United States, so" also first-class modern electric service at reasonable rates been introduced and developed by.
foreign subsidiaries in thirteen countries so that citizens of those countries have also reaped a real benefit from the pioneering work which has been done.
This company's association with Shanghai makes it necessary to observe that the reference to American labour applies generally to the purchases made by its foreign subsidiaries and not specific cally to Shanghai where—the Shanghai Power Company, as is generally known, is largely equipped from British plants. Nevertheless the general argument holds good. Whether the protests of the companies will secure a modification of the Bills remains to be seen. If they do not, there is reason why Shanghai should be much incommoded for appropriate [steps could be taken to ensure the [smooth continuance of the service Jwhich it at present enjoys. The disabilities will fall on the Public Ubilities in America and, as re-[sponsible critics suggest, on the people of that country by reason of the blow struck against the free operation of a large and useful industry and public service
Text read from the printed page and cleaned; old type leaves the occasional error.