The CHAIRMAN. Senator Lenroot?

Mr. LENROOT. Mr. Chairman, we have no witnesses to present this morning, and so far as we can now see we will have no further witnesses. I am informed, however, that there are others, not representing the utilities, who desire to address the committee this morning, and I, therefore, give way to them.

The CHAIRMAN. I understand that Mr. Emery is present.
Mr. EMERY. Yes, Mr. Chairman.

The CHAIRMAN. Just come around here to the table.

STATEMENT OF JAMES A. EMERY, ESQ., GENERAL COUNSEL OF THE NATIONAL ASSOCIATION OF MANUFACTURERS

Mr. EMERY. Mr. Chairman and gentlemen of the committee, I appear on behalf of the National Association of Manufacturers, which has a double interest in the proposal pending before your committee.

Senator HAWES. Who are the Association of Manufacturers, Mr. Emery?

Mr. EMERY. Individuals, firms, and corporations engaged in the manufacturing industry throughout the United States.

Senator HAWES. All right.

Mr. EMERY. I say it has a double interest in the proposal, Mr. Chairman and gentlemen of the committee, both because it includes in its membership a very considerable number of public-utility corporations engaged in the manufacture and distribution of electrical energy and gas, natural and artificial, some 45 of whom are members of the association, a list of which I here supply, and that are operating in 19 States of the Union:

PUBLIC-UTILITY COMPANIES ENGAGED IN PRODUCTION OF GAS AND ELECTRIC ENERGY WHICH ARE MEMBERS OF THE NATIONAL ASSOCIATION OF MANUFACTURERS

Alabama Power Co., Birmingham, Ala.

Southern California Edison Co., Los Angeles, Calif.

Southern California Gas Co., Los Angeles, Calif.

Great Western Power Co. of California, San Francisco, Calif.

San Joaquin Light & Power Co., San Francisco, Calif.

Public Service Co. of Colorado, Denver, Colo.

Bridgeport Gas Light Co., Bridgeport, Conn.
Hartford Electric Light Co., Hartford, Conn.
Stamford Gas & Electric Co., Stamford, Conn.
Georgia Railway & Power Co., Atlanta, Ga.
Central Georgia Power Co., Macon, Ga.
Commonwealth Edison Co., Chicago, Ill.
Peoples Gas Light & Coke Co., Chicago, Ill.

Public Service Co. of Northern Illinois, Chicago, Ill.

Indianapolis Light & Heat Co., Indianapolis, Ind.

Peoples Light Co., Davenport, Iowa.

Consolidated Gas, Electric Light & Power Co., Baltimore, Md.

General Gas Light Co., Kalamazoo, Mich.

Kansas Power & Light Co., Kansas City, Mo.

Nebraska Power Co., Omaha, Nebr.

Public Service Electric Co., Newark, N. J.

Union Electric Light & Power Co., St. Louis, Mo.

Union Electric Light & Power Co. of Illinois, St. Louis, Mo.

Brooklyn Edison Co., Brooklyn, N. Y.

Brooklyn Union Gas Co., Brooklyn, N. Y.

Commonwealth Power Railway & Light Co., New York, N. Y.

Consolidated Gas Co. of New York, New York, N. Y.

New Amsterdam Gas Co. (Inc.), New York, N. Y.
New York Edison Co., New York, N. Y.

Standard Gas Light Co., New York, N. Y.

Niagara Falls Power Co., Niagara Falls, N. Y.

Rochester Gas & Electric Corporation, Rochester, N. Y.

Union Gas & Electric Co., Cincinnati, Ohio.

Cleveland Electric Illuminating Co., Cleveland, Ohio.
United Gas Improvement Co., Philadelphia, Pa.

American Natural Gas Co., Pittsburgh, Pa.

Tennessee Power Co., Chattanooga, Tenn.

Utah Power & Light Co., Salt Lake City, Utah.
Milwaukee Coke & Gas Co., Milwaukee, Wis.

Milwaukee Electric Railway & Light Co., Milwaukee, Wis.

Milwaukee Gaslight Co., Milwaukee, Wis.
Wisconsin Gas & Electric Co., Racine, Wis.
Standard Gas & Electric Co., Chicago, Ill.

Columbia Gas & Electric Co., New York, N. Y.

In the second place, Mr. Chairman and gentlemen of the committee, the association, as an organization of men widely engaged in the industries of the United States, is sincerely and intimately concerned in the nature of the power which the Senate of the United States is likely to grant to a committee of that body for the purpose of inquiring into the private affairs of individuals and corporations. And, finally, they are not less earnestly concerned with any inquiry which is conducted by a committee of the Congress of the United States, and of either branch thereof, that due regard shall be given by the nature of the power conferred to the inconvenience and public expense, and the expense which is thrust not only upon the Government of the United States, but upon individuals and corporations in the subject matter of the inquiry.

The resolution as presented to this committee is for its favorable report with or without modification, or for an unfavorable report. It is important, Mr. Chairman and gentlemen, that the nature and extent of the power which it is proposed to confer upon a committee of the Senate of the United States in this resolution, should be examined in the light both of legal and legislative precedent.

I therefore beg to call to the attention of the committee the nature and extent of the power which it is proposed to confer. Senate resolution 83 proposes the appointment by the President of the Senate of a committee of five members empowered to sit at such times and places as it may deem necessary and proper; to require the attendance of witnesses by subpoena or otherwise; to require the production of books, papers, and documents, and to employ counsel, experts, assistants, and stenographers. Each member of the committee may administer oaths to witnesses or sign subpœnaes, and every person summoned before the committee or any subcommittee, refusing or failing to obey the process, or appearing and refusing to answer questions pertinent to the investigation is subject to the penalties of the law.

The proposed committee is empowered and directed to inquire into and report upon :

First. The growth of the capital assets and capital liabilities of public-utility corporations supplying either electric energy in the form of power or light or both, however produced, or gas, natural or artificial, and the distribution of same.

Second. Of corporations holding stocks of such public-utility corporations, and of nonpublic-utility corporations owned or controlled by or affiliated with such holding companies.

Third. Into the methods of issuing, the price realized or value received for all securities issued by such corporations; and the commissions or bonuses paid or received therefor.

Fourth. The extent of the control exerted by holding companies, or stockholders thereof, or the extent to which the latter companies are financially interested in financial, engineering, construction, or management of corporations, and the relations of these four classes of corporations to holding companies or public-utility corporations. Fifth. The services furnished to public-utility corporations by holding companies or companies subsidiary to or affiliated or associated with them, and the fees, commissions, bonuses, or any form of charge made for such corporations, and the earnings and expenses of such holding companies and such affiliated, associated, or subsidiary companies.

Sixth. The value or detriment to the public or holding companies owning the stock or otherwise controlling such public-utility corporations immediately or remotely, with the extent of such ownership or control, and particularly what legislation, if any, should be enacted by Congress to correct any abuses that may exist in the organization or operation of such holding companies.

And, finally, to inquire into the extent to which such corporations, meaning all corporations hitherto alluded to in the course of the resolution, their officers, or anyone in their behalf, or in behalf of any organization of which they may be a member, either through the expenditure of money or the control of the avenues of publicity, have made, if any, and if so what effort to influence or control public opinion on account of municipal or public ownership of the means by which power is developed and electrical energy generated and distributed, or to influence, or control elections.

Mr. Chairman, the proposed committee is unlimited in its life, its territorial jurisdiction or extent, and the issue before your committee is whether or not the resolution in its present form should be favorably reported to the Senate, and we respectfully submit that it should not be approved by you, and for the following reasons:

First. Because it authorizes a general inquiry into the private affairs of citizens and corporations in respect to matters upon which the Congress is not competent to legislate, which are not inseparably related to the subject matter upon which Congress may legislate, but are easily distinguishable from it.

Second. That the resolution in its present form confers authority in violation of the limitations of the first and fourth amendments to the Constitution, and that by legislative precedent either house of Congress has rarely, if ever, tried to require persons to appear and present books, records, and papers, and only, we submit, as to subjects upon which either house or the Congress was plainly competent

to act.

Third. And that this committee is not empowered and ought not to recommend a general inquiry into the private books and records of individuals and corporations if doubtful whether within the competency of Congress to authorize, or beyond its power to legislate in the matter of the subject to which the inquiry is addressed.

Senator WALSH of Montana. Mr. Emery, I just want to know what you mean by private affairs, looking into private affairs.

Mr. EMERY. I will develop that, if you will permit me, in the course of my argument.

Senator WALSH of Montana. All right. I supposed that these were all public affairs.

Mr. EMERY. I will develop that, I think, quite fully.
Senator WALSH of Montana. All right.

Mr. EMERY. Fourth. It is finally submitted that the committee should give due regard in authorizing the inquiry, not only to the character and extent of the power recommended, but the public and private expense and inconvenience which may be reasonably anticipated.

First of all, there are one or two questions with respect to the form of the resolution, Mr. Chairman, which will extend or limit the nature of the power conferred, and to which I beg to call the committee's attention, because I am uncertain just what the phrase means. For instance, what I have referred to as the second proposition, that is, that the committee is to inquire into the growth and capitalization of public utility corporations included in the developing and distribution of electrical power and energy, or gas, natural or artificial; and then into the corporations holding the stocks of such corporations. That may mean, again, what is technically known as a holding company, and a holding company as, for example, described under the revenue act of 1926 is a corporation which is formed for the exclusive purpose of holding title to property and receiving the income thereof. That would be technically a holding company. But the language employed here is:

Corporations holding stocks of such corporations.

If that means any corporation which holds stocks in corporations engaged in the production of electric light and power, and gas, natural or artificial, it, of course, enormously increases the range of the inquiry proposed. And I am uncertain from the terms of the resolution whether both are included or whether it has included only the technical holding company.

And, secondly, as to the nature of the authorization to the individual members of the committee: It is said in the resolution that

The chairman of the committee, or any member thereof, may administer oaths to witnesses and sign subpoenas for witnesses.

Of course, your body will determine as a matter of legislative work whether that includes the right to issue subpoenas on the individual responsibility of the members of the committee or not. But their powers are stated here in this language:

That the committee shall have the power to require the attendance of witnesses, by subpoena or otherwise.

That word "otherwise" might mean merely an invitation to appear before the committee, but since the language employed is to require attendance I assume it speaks in the language of compulsion, and I am unable to determine by what means a committee can require the attendance of witnesses, assuming its authority to be unquestionable, except by subpoena. I do know that commands or directions

are sometimes issued by telegraph or telephone, directing individuals to appear before the committee, and I do not know whether the word "otherwise" is intended to include authority other than that which is to be expressed through a subpoena, but I call the attention of the committee to it, because it represents an important issue as to increased power in a committee of the Congress over the citizens.

Mr. Chairman, neither I nor anyone whom I represent as a citizen of the United States questions the power of the Congress of the United States to enter upon an inquiry for the purpose of obtaining adequate knowledge to frame legislation within the powers expressly conferred upon the Congress of the United States; its power to protect the integrity of its own proceedings, to inquire into the conduct of its Members, to proceed with its organization, to conduct any necessary inquiry into the qualifications of Members, or any attempt to disturb its proceedings or otherwise improperly influence them, is unquestioned. This is the absolute legislative power of self-defense possessed by the British Parliament and possessed for the sake of inherent and unquestioned reasons by either House of Congress within its otherwise established jurisdiction. It was a power recognized at the time of the creation of the American Government, and its necessity is so apparent that it needs only to be stated to be recognized.

But, sirs, the power of the Congress of the United States to inquire into the private affairs of the citizens, individual or corporate, is not the same power as that possessed by the British Parliament, nor is it the same power possessed by the legislative bodies of the States of the Union. The British Parliament, as our courts have frequently pointed out, possesses the unreserved sovereign power of the British people. It may, in the language of Blackstone, do anything except turn a man into a woman or a woman into a man. The States possess with respect to the power of legislation all powers not expressly denied to them, but the Congress of the United States is granted some 79 express powers, accompanied by 110 limitations and reservations upon the exercise of that authority.

Our Constitution speaks in terms of limitation, and the investigative authority of Congress, while fully complete in respect to the subject matter of which it has jurisdiction, can be exercised only with respect to the subject matter upon which it is competent to legislate. And the test of whether or not the Congress has the power to compel, and I use the word "compel" because the distinguished Senator from Montana [Mr. Walsh] in the course of an inquiry which I happened to hear the other day, made that distinction very clear. He asked a witness appearing before this committee if he realized the difference between responding to inquiries or volunteering information, and appearing as a witness under the compulsion of legal authority. And the words proposed here, of course, imply the grant of legal power to compel the disclosure of the contents of books, records, documents, correspondence, and every form of information in the possession of the corporations who are subjected to the proposed inquiry, and to require any witness who may appear before the committee in response to the exercise of its jurisdiction, to answer under penalty all pertinent inquiries which may be directed to the subject matter of the investigation.