The CHAIRMAN. If there are no further questions of Mr. Parker, are there any members of the Interstate and Foreign Commerce Committee who want to be heard in opposition?

Mr. WYANT. Mr. Chairman, Mr. Wolverton will present our views in opposition.

STATEMENT OF HON. CHARLES A. WOLVERTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. WOLVERTON. Mr. Chairman, Joint Resolution 517 has the effect of continuing into the Seventy-second Congress a committee of the present House that must necessarily expire by limitation on March 4 next. At least it continues as members of such committee the members of the present committee who have been elected to the next Congress.

You will notice it is a joint resolution, although it applies only to a committee of the House. The reason for this, as I understand it, is that the House itself would not have the power to order any investigation beyond March 4, but it can do so when there is Senate concurrence by joint resolution.

I would like to explain in a few words the reason that my colleagues and myself, members of the Interstate Commerce Committee of the House, appear here in opposition to the resolution. In the first place the resolution was not introduced until February 23. No one on the Committee of Interstate and Foreign Commerce, so far as I have any knowledge of certainly not those who are here in opposition-had any notice that the resolution would come before the committee for any expression or action until it was brought up this morning.

There were only 13 members of the committee present at the time. That is a bare majority. Some members of the committee who had been present earlier in the morning had left the committee room. before this matter was brought up. No notice had been given to committee so far as I know that it would be brought before our committee. After some discussion an amendment to limit or restrict the effect of the resolution to certain class of corporations instead of having it apply to all corporations engaged in interstate commerce as provided for in the resolution was defeated by a vote of 7 to 5. The resolution was then approved in its present form by a vote of 8 to 5.

The opposition to the resolution is not based upon any desire to handicap or prevent the fullest investigation of holding companies affiliated with or related to carriers engaged in interstate transportation. This was provided for in House Resolution 114 adopted last year. Under the provisions of that resolution an investigation has been conducted under the supervision of Dr. Walter M. Splawn. He has gathered an immense amount of data of a worthwhile character and submitted the same in a printed book containing some 1,600 or 1,800 pages.

It is now urged that the present resolution is necessary to carry on the investigation previously authorized under House Resolution 114. If such is the only purpose sought by the resolution I can say that there would be no opposition upon the part of those who appear here to-day. Our opposition is directed solely and entirely to the fact that it is not necessary to use such general language, affecting all

corporations, making all subject to investigation, if the only purpose is to investigate holding companies or corporations engaged in interstate transportation. This object would be served by using language that would be similar to that contained in Resolution 114-language that would continue in effect that resolution. If such an amendment would be made to the present Resolution 517, there would be no objection upon our part.

You will notice that the language of this resolution on page 2 carries the investigation much further than did the resolution of last year. The need for widening the scope of the investigation has not been shown to the committee as yet, but, notwithstanding the fact that this resolution is sought by its proponents on the basis of carrying out the purposes of the resolution adopted last year, it changes the language of the previous resolution so that it reads: "Any corporation engaged in interstate commerce."

Briefly, the objection of those for whom I am speaking is to the general language "any corporation." It is entirely to comprehensive and all inclusive in character. Furthermore, there has been no hearing held on this resolution except the testimony given by Doctor Splawn this morning before our committee, and this was in executive session. He admitted that that language is broad enough if you wish to take advantage of it, but that it is not the purpose, however, to do so-to investigate any line of business that is engaged in interstate

commerce.

Mr. MICHENER. Without its relation to public utilities or railroads? Mr. WOLVERTON. There is no qualifying clause in this resolution that would confine it to the purposes of the original resolution. The only qualification that we have is the statement by the chairman and by Doctor Splawn, who, I assume, would conduct the investigation, that we would not investigate everything. But the language is broad enough to cover everything if they so wish.

Mr. MICHENER. Take a corporation manufacturing something in the District of Columbia and selling its products in New Jersey. Could you investigate that corporation under this resolution?

Mr. WOLVERTON. Undoubtedly. It would include chain stores, movie interests, newspapers, or any conceivable manufacturing establishment that you could think of. That is my judgment, and I think you will agree with me when you consider the language which has been used, namely, "any corporation engaged in interstate commerce." Mr. MICHENER. Are we not infringing on the prerogatives of the Senate in passing a resolution of this kind?

Mr. WOLVERTON. I think not. This is a joint resolution and can not become effective without affirmative action by the Senate. I assume that such procedure preserves the prerogatives of the Senate in the matter.

Mr. FORT. The type of investigation that the committee has thus far conducted has been an extremely dignified and helpful and unobjectionable type of investigation?

Mr. WOLVERTON. That is absolutely true, and I can say unqualifiedly for those for whom I am speaking that there is no objection whatsoever to the passage of any resolution that will make effectual the work that has already been done under the resolution adopted last year.

Now, Mr. Parker has said that it might be that the objection now being made to the resolution would be eliminated if the resolution in its terms confined to only "public utility corporations engaged in interstate commerce," rather than "any corporation" so engaged. Even the use of the term "public utilities" would widen the scope of the original resolution. It was stated by Doctor Splawn before the committee this morning that it might be necessary in pursuing the purpose of the original resolution to go into some lines of activity other than railroads. Therefore, that there might be no handicap whatsoever in conducting the investigation already entered upon there was a disposition on the part of the objectors to permit the words "public utilities" to be included, if such should be necessary to the proper conduct of the investigation already being made, although speaking for myself, I do not clearly see that such extension is necessary. If, however, the necessity should be made to appear I think there is a disposition upon the part of the committee to go along with that extension.

I now direct your attention to the closing sentence of section 1, which states.

*

* and, to the extent necessary to determine the effect of such ownership and control, to make like investigation of the corporations so engaged.

This language gives power to investigate any corporation that is engaged in interstate commerce.

Mr. O'CONNOR. You mean by that, not only the holding company, but the corporations which they hold, which might be any kind of a corporation?

Mr. WOLVERTON. It is far broader in its effect than that. It goes far beyond holding companies. If this resolution is adopted, the language that is used-namely, "any corporation engaged in interstate commerce"-would include not only holding campanies, railroad companies as originally intended but also electric light companies, trolley companies, newspapers, and in fact any and every conceivable kind and character of corporation engaged in interstate commerce. The CHAIRMAN. Up to the present time your committee has not even considered this report which they have made on railroads, is that true?

Mr. WOLVERTON. That is true.

The CHAIRMAN. It will take you some time to consider the legislation necessary as the result of that investigation, will it not? Mr. WOLVERTON. I would say that it would; yes, sir.

The CHAIRMAN. What would be the effect if you just held this over until next fall and then if it is necessary, have your committee start this investigation while you are considering the legislation that will be necessary as the result of this first investigation?

Mr. WOLVERTON. For myself and for those for whom I speak, I would think that would be perfectly proper and would certainly attain the purpose that is desired. However, I am inclined to believe that Mr. Parker, our Chairman, and Mr. Rayburn, the ranking minority member, would not agree with that, although to be frank with you, I have not heard anything presented to our committee that in a concrete way has indicated any handicap or difficulty that has been experienced in gaining all the facts and information desired or necessary under the original resolution.

For that reason we are unable to see why the scope should be broadened to include "any corporation," and give at the same time the power to investigate any such corporation. If there is one thing business needs at this time, it is to be let alone and to be given an opportunity to recover. We ought not to pass a resolution that brings every corporation engaged in interstate commerce under suspicion or under the possibility of investigation. The passage of this resolution in its present form could not help but prove disturbing to business in general, and, the mere statement that it is not intended to investigate all corporations is not sufficient so long as the terms of the resolution make suit possible.

The only thing that can be said in behalf of this resolution is that perhaps all of its powers would not be exercised.

Mr. SABATH. Your main objection, then, is to the concluding paragraph, or to the verbiage starting on line 10, which reads,

* * * and, to the extent necessary to determine the effect of such ownership and control, to make like investigation of the corporations so engaged.

Mr. WOLVERTON. That together with the same general language in line 3, reading, "any corporation engaged in interstate commerce. Mr. SABATH. They have no jurisdiction to investigate any other corporation than those which are engaged in interstate commerce. Mr. WOLVERTON. That is all.

The CHAIRMAN. Mr. Rayburn, we will be glad to hear you.

STATEMENT OF HON. SAM RAYBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. RAYBURN. Mr. Chairman and gentlemen of the committee; in the beginning, allow me to say in reply to Mr. Wolverton, with reference to the resolution that we passed last year under which Doctor Splawn under the direction of the committee conducted this holding company investigation, that a bill has been introduced and will come up in the committee to-morrow for consideration, to place holding companies as they relate to railroads under the control of the Interstate Commerce Commission.

The CHAIRMAN. Do you expect to enact that at this session?

Mr. RAYBURN. We do expect to enact that into law at this session. We have found out in this investigation that has been carried on thus far everything with reference to the railroads and their ownership. In this book is a complete set-up of 160 Class I railroads. There is their mileage, their amount of stock, the 30 largest stockholders, the amount of their holdings, the holding companies that they control, the holding companies that own stock in that. There is a complete picture of every Class I railroad in the United States.

These holding companies have been acquiring the railroads. One holding company, one set of men in one holding company in the United States absolutely controls one railroad in the United States and owns an equity of less than 1 per cent of the stock.

Of course, the answer is, or at least some people make the answer, "Why close the door after the horse is gone?' We can not do that, of course, but there are a great many horses in the railroad business and in the holding company business that have not gone yet.

Reverting back to this resolution, we do intend to act upon that bill at this session of Congress, and pass it.

Mr. WOLVERTON. It has not been reported by the committee yet. Mr. RAYBURN. I understand, but this resolution that we are considering here was not acted upon by the committee until we met this morning. What we want to do in this investigation is this, to determine the effect of such ownership and control on interstate and foreign commerce. These gentlemen want to narrow this to the question of public utilities. One of the hardest things in the world to define in specific language is exactly what a public utility is.

We do not want our investigator met, when he goes out to develop the facts with reference to the utilities in the country, with the statement, "I am not a public utility." We do not want to have to take the time to go to the courts and spend months in trying to develop in the courts the facts and what the law is with reference to what is a public utility.

We want this. When you go to investigate a public utility, you will find a very complex institution. Those who have not looked into this report, those who have not studied this question of holding companies have not the slightest conception of the ramifications of holding companies. Suppose you go to investigate a public utility. Suppose that public utility owns a holding company. You want to find out who owns the stock of the holding company. The public utility itself might not own 30 per cent of it. It might control it; and 30 per cent in railroading, concentrated, is absolute control when the other 70 per cent of the stock is scattered throughout the land. We want to investigate and find out who owns and controls, and to what purpose they are putting, the other 70 per cent of the stock of this holding company.

We want to find out what holding company owns the stock of the utility company. We believe that with the difficulty of defining what is a public utility, we have got to have the broad language of this resolution.

This committee, of course, is not going out to persecute business. No shock came to business in the sane, sound investigation that developed every fact with reference to the railroads in this country that has been developed in the last five months.

We do not want to persecute business. We do not want to unsettle business and the men in this country who are conducting this power business and this utility business are not going to be disturbed if they are conducting an honest and a fair business. If they are not conducting an honest and a fair business, and are dealing with the public in an unfair way, they should be investigated and the facts and circumstances ought to be brought to the attention of the Committee on Interstate and Foreign Commerce.

Mr. THURSTON. Mr. Rayburn, for instance the Bell Telephone & Telegraph Co. controls the General Electric and Westinghouse Electric Companies, which companies manufacture electrical appliances but which are not public utilities. They do have close relationships, however, with the Bell Telephone Co.

Mr. RAYBURN. Yes.

Mr. THURSTON. That would illustrate your point?

Mr. RAYBURN. Yes. I say we ought to investigate that. You take one holding company called the Van Ness Holding Co. owned by the Van Sweringens. It, in turn, owns another holding company. That company owns another and controls another holding company.