of these roads that are referred to here as holding companies, and they all come in one group? Mr. PARKER. Well they own them now. I think, as a matter of fact, that they have acquired them with the consent of the commission. There is no controversy about the New York Central lines I have spoken of. There is a controversy about the New York Central and the Virginia and two or three other lines that they want to acquire in the 4-party consolidation; but the lines that they now control, I do not think there is any controversy about them at all. Mr. GARRETT. The point I was getting at is this: Taking the illustration you just gave of the New York Central, as far as the general public is concerned, the public thinks-those who are not informed as to what your report contains-that they are 3 or 4 or 5 separate and distinct railroad companies. Mr. PARKER. Yes. Mr. GARRETT. As a matter of fact, there is but one. Mr. PARKER. Yes. Mr. GARRETT. Now when Congress authorized the grouping and consolidation of these railroads, that road did not group and consolidate anything except what was already consolidated. Mr. PARKER. The answer to that is this: The New York Central made every effort in the world to buy the other few per cent of stock and they could not do it. They have had all kinds of suits with minority stockholders-less than 5 per cent-and, as long as there is one minority stockholder, they can not amalgamate and make one corporation. It is impossible. I hold no brief for the New York Central, do not misunderstand me; I am only using that as an illustration. Mr. GARRETT. I understand. Is that generally true throughout the country, as to the others? Mr. PARKER. No. There is a tremendous amount, I won't say of abuse, but of criticism of the acquisition of railroad companies by holding companies. I do not want to mention them by name, because that is not quite fair. Mr. GARRETT. Just how do they get the name of "holding companies," and just how does that come about? Mr. PARKER. I will illustrate and perhaps you will know what I mean when I say it is not fair for me to say here. Suppose, for instance, we were a board of directors of one of the big lines and wanted to get into New England. We would form a separate company of the same people; we would go and buy control of the New York, New Haven & Hartford. Well, you have a consolidation that is outside of the law, but it is a consolidation just the same. Mr. GARRETT. And we then- Mr. PARKER. Under the bill that Mr. Rayburn introduced-the same one that I introduced last year-before they could buy that acquisition of control, they would have to go to the Interstate Commerce Commission and get their consent. Mr. GARRETT. But now they do not have to do that? Mr. PARKER. Well, it is a private concern. They are acting on the same theory that you would act-you could go out and buy anything. you liked, that you had the money to pay for. Mr. MICHENER. The same people are circumventing the law. Mr. PARKER. The same people are circumventing the law. I am not saying they are doing something they should not do, or that it is not in the public interest; but it is for the Interstate Commerce Commission to say whether it is in the public interest or not and not the directors of some railroads. That is what we are after. Now you asked about the expense of this investigation. I have the figures here. You appropriate $50,000; we spent $39,755.54 to get that thing [indicating]. Now there is not a copy of that in existence that you can buy, beg, borrow, or steal. Mr. GARRETT. Well, I will take yours, then. Mr. PARKER. You have two, I think; there were two allotted to every member of Congress. And, if you have not, it is really worth your while to go and look through there; because you will find a great deal of very valuable information which was gotten by Doctor Splawn. Now, gentlemen, I want to emphasize this: You heard nothing about this investigaton. We did not go out with any brass band; we did not bring anybody before us and question them and get into the headlines of the newspapers. What happened was that some gentlement were sent for and they met in my office. Mr. Rayburn was there; the subcommittee was there. They were told we were going to get that information. We wanted to get it quietly; we did not want to go out and make a spectacular investigation; we did not want to subpoena their books to Washington. It would be inconvenient to them and inconvenient to everybody. We told them if they would submit to our investigators going there and give them everything they wanted, it would expedite matters very materially. And let me say that the information we have gotten here was gotten without the issuance of one single subpoena. I had the power to subpoena; it was carried in the resolution, but we did not have to subpoena one thing and you will find in that volume the minutes of every single meeting that was ever held by a big company-by the larger holdings companies. Mr. GARRETT. There is no question but what your committee deserves great credit. Mr. SABATH. But there is not anything they put in the minutes, you know. Mr. PARKER. But that is all you can get, Mr. Sabath. Mr. SABATH. I realize that; but if we could get something that transpires outside of what appears in the minutes, it might be different. The inside manipulations do not appear in the minutes. I do not think there is a manipulation-that is not the correct phraseology, perhaps-I do not think there are agreements between individuals about anything that affects corporations; I do not think there is a single thing that is not in that report. Mr. GARRETT. I read every day in the newspapers criticisms against the Congress for meddling in the affairs of these larger companies, or in private business. Mr. PARKER. True. Mr. GARRETT. And they charge Congress for being responsible for the depression and the crisis, and the conditions that exist. Mr. PARKER. Yes. Mr. GARRETT. You know that is wrong; you do not believe that is so. Mr. PARKER. Absolutely, no. But I will tell you what I do believe. I do believe you can call four or five men here and put them on the stand and cross-examine them and create a very bad impression. Because you can ask them questions that are not particularly relevant, that are sensational; but I do not think you will find one item of criticism by any of the corporations that we investigated. I have never heard of any. And Mr. Rayburn, I know, intends to conduct the investigation into the holding companies in the other field in exactly the same manner that this investigation was conducted. The CHAIRMAN. We are much obliged to you, Mr. Parker. Mr. BANKHEAD. There is one question that will be asked and I think we ought to have a brief statement from the chairman about it. This resolution has no limitation on the amount that might be authorized for this investigation. I would like to hear what the chairman has in mind about it. Mr. RAYBURN. This resolution has no limitation in it upon the amount, because I consulted with the legislative drafting service when this resolution was prepared and they drew two resolutions for me. This resolution leaves out any reference to the sum, but another resolution to be introduced, that would go to the Committee on Accounts when this authorization was made, would fix the amount. As I said a moment ago, this is going to be a more extensive investigation; it is going to take more time; it is going to take more money than the other investigation. One of the reasons is this: In the railroad field, the Interstate Commerce Commission loaned to our committee a great many of its main experts, without cost to the committee or to Congress. Whether or not we are going to get them this time is a question and we may have to go out and hire these expert auditors, which will cost a great deal of money. And in the resolution I introduced, or that I intend to introduce, if you give me this resolution, I say there shall be used out of the contingent fund an amount not in excess of $100,000. And I think we can make this investigation under that figure. This investigation, of course, can go on as a House investigation throughout the Seventy-second Congress, but I would dislike very much, next September or October, when Congress is not in session, for the investigating end of the committee to run out of money and have to quit. Therefore, I do not intend to ask for more than $100,000 and to limit it and to say it shall not be in excess of $100,000. Mr. GARRETT. You calculate that would run you until the short session of Congress would convene? Mr. RAYBURN. There would be no question about our having plenty of money. Mr. PARKER. I wish to make just one more statement. In any resolution of this kind, people often think of it as a junketing committee. I want to tell you just how much was spent by the Members of Congress in this investigation. There was one meeting of the subcommittee in New York, which we had to have to approve a questionnaire that Doctor Splawn had to go to the brokers with to get the names of the people who owned the stock. In that case Mr. Rayburn was unable to come from Texas and we saved that much money. He wired me his proxy. Mr. Mapes came from Michigan; he got in in the morning and left that night. I came from Salem, which is in New York; I got in in the morning and I left at night. I made one trip from Salem to Washington and back at public expense. And that was all the money spent by the committee, personally. The CHAIRMAN. Well the amount spent shows there was no extravagance. Mr. PARKER. I simply want to emphasize the fact that the committee itself did not use this as a vehicle to travel around the country at public expense. The CHAIRMAN. Thank you very much. Mr. RAYBURN. We are very much obliged to the committee. (The committee thereupon proceeded to the consideration of other business.) |