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Printed for the use of the Committee on Interstate Commerce

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COMMITTEE ON INTERSTATE COMMERCE

JAMES E. WATSON, Indiana, Chairman FRANK R. GOODING, Idaho.

ELLISON D. SMITH, South Carolina. JAMES COUZENS, Michigan.

KEY PITTMAN, Nevada. S. D. FESS, Ohio.

WILLIAM CABELL BRUCE, Maryland. ROBERT B. HOWELL, Nebraska.

C. C. DILL, Washington. GUY D. GOFF, West Virginia.

BURTON K. WHEELER, Montana. W. B. PINE, Oklahoma.

EARLE B. MAYFIELD, Texas. FREDERIC M. SACKETT, Kentucky.

HARRY B. HAWES, Missouri. JESSE H. METCALF, Rhode Island.

HUGO L. BLACK, Alabama. COLEMAN DU PONT, Delaware.

ROBERT F. WAGNER, New York.

JOHN F. HAYES, Clerk.
JI

HD

27173 (۱ 1927

INVESTIGATION OF PUBLIC UTILITY CORPORATIONS

TUESDAY, JANUARY 24, 1928

UNITED STATES SENATE,
COMMITTEE ON INTERSTATE COMMERCE,

Washington, D.C. The committee met, pursuant to adjournment, at 10 o'clock a. m., in room 212, Senate Office Building, Senator James E. Watson (chairman) presiding.

Present: Senators Watson (chairman), Howell, Pine, Sackett, Smith, Pittman, Hawes, Black, and Wagner.

Present also: Senator Walsh of Montana.

The CHAIRMAN. The committee will please come to order. Who is the next witness?

Senator WALSH of Montana. Mr. Chairman, at the last session a letter was read into the record offered by Senator Gooding, as you will recall, being a letter addressed to me, and at that time I suggested that if I might be permitted to do so I would put in my copy so that the entire correspondence would be here.

The CHAIRMAN. Certainly.

Senator WALSH of Montana. This letter is under date of December 22, 1927, and was sent to all public-service commissions. It reads as follows:

In anticipation of an investigation at the ensuing session of Congress on the general subject, of public utilities, and particularly of the financing through which great groups operating in that field have added to their holdings, acquiring independent properties in great number, a powerful association of publicutilities corporations and holding companies controlling the same, has opened headquarters in the city of Washington, for the purpose of making the best possible showing for the companies in respect to matters in which their interests may to a greater or lesser extent be in conflict with those of the public, and possibly for the purpose of influencing opinion.

It is not to be understood that the propriety of their action is at all ques. tioned, but it is quite justifiable to assume that the very large and well-paid force thus assembled to meet any situation that may arise will play the part of advocates for the cause they represent, while the public, through their reprentatives in Congress, have no organization for the purpose of eliciting and assembling the facts pertinent to the inquiry contemplated. Unde these circumstances, your cooperation toward making the investigation, should it be ordered, as complete and useful as possible, is earnestly solicited.

That the tendency toward centralization has been intensive during the past few years is universally recognized. It is quite generally believed that through the rivalries of the various groups in endeavoring to acquire properties in expectation of realizing large profits out of refinancing, as well as for other reasons, excessive prices have often been paid for the properties acquired and securities issued against them in amount very considerably in excess of their real value.

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