lines try to make a deal with the carbon people who have considerable acreage, to go into the pipe-line venture, to make a better-priced market for the gas, and after that is secured, they generally move on into some other district. That is the reason that the Columbia Carbon Co. was in this particular line, and the reason it was in the Chicago line. It had quite a lot of properties in the Texas Panhandle. The next situation, if you are interested in it, is the Colorado Interstate, a similar line which takes gas from the Texas Panhandle to Denver.

I realize that it is getting near to closing time, and I do not want to take up too much of your time, but I would like to reiterate the point I made a few moments ago, that we are not fighting regulation, as far as our company is concerned. We realize that Congress has a perfect right to regulate interstate lines, and if they find upon investigation that it ought to be done, we will join-of course, we will have to joinbut I mean that we are not fighting that sort of a bill.

This bill, under the present conditions, would force our company to sell, as I see it-I will not say "sell"-but to distribute stock to the stockholders of the Standard Oil Co. of New Jersey prior to October 1, 1935, for the reason that it brings the oil company business in under the holding company situation if it has any interest in utility companies; and under this bill I do not believe an oil company would function, because it would have to get permission from the Securities Commission to do all the things which they now do relative to making contracts between outside people, intercompany contracts. I doubt whether you could make a contract to sell gasoline to an outsider, that is, an actual contract, without having it approved, under this bill. Of course it was never the intention to do that. I think there is not any question, if you have time to give consideration to the history of this business, that the oil companies are necessary in this business if you are going to develop any more markets for the gas. You would get a few holding companies in of other types; but, after all, the oil companies are the ones that are producing the gas, and in order to get any money out of it and to get some money back for the money they spent in trying to find fields, I think it is to the public interest that they be not precluded from doing this kind of business, because if you are going to have any long lines or any more lines out of the Texas Panhandle, from my own point of view I do not see who else is going to do it, Mr. Chairman.

Thank you, very much.

(The brief referred to and submitted by the witness is here printed in full, at the end of the proceedings.)

The CHAIRMAN. Mr. J. R. Munce, vice president, Arkansas Natural Gas Corporation Shreveport, La., has asked permission to have his brief made a part of the record, and that may be done.

(The brief submitted by J. R. Munce, vice president, Arkansas Natural Gas Corporation, Shreveport, La., is here printed in full at the end of the proceedings.)

The CHAIRMAN. I understand, Mr. Chandler, that you are going to conclude your statement in 15 minutes?

Mr. CHANDLER. I will try to.

130254-85 44

STATEMENT OF GEORGE B. CHANDLER, EXECUTIVE SECRETARY, OHIO CHAMBER OF COMMERCE, COLUMBUS, OHIO

Mr. CHANDLER. My name is George B. Chandler. I am the executive secretary and I speak by the authority of the Ohio Chamber of Commerce, which is the largest business organization in Ohio and the oldest State chamber of commerce in the United States. It consists of 78 local chambers of commerce, including the great chambers of Cleveland, Cincinnati, Toledo, Columbus, Akron, and Dayton, and 4,269 individual corporate and representative members. We represent several billion dollars of active capital-which we trust will not be held against us.

I am told that I am speaking on the time allotted to the public utilities and was advised to apply to them for a place on the opposition program. I do not represent utilities, although I would by no means be ashamed to do so. Be their mistakes what they may have been, they have far exceeded in efficiency and integrity of purpose the Government that is pursuing them

The CHAIRMAN. Do you mean to say there is no integrity in your Government?

Mr. CHANDLER. I mean to say that the objective of this bill, in my opinion, is not wholly the regulation of utilities.

The CHAIRMAN. I do not catch your statement.

Mr. CHANDLER. I say, the objectives of this bill, in our opinion, are not wholly the regulation of holding companies and public utilities. We have a strong feeling that it is a spearhead of a broader movement, to be followed by public ownership of railroads, and a great deal of expansion. We may be wrong, but that is our view. The CHAIRMAN. I can say to you that you are wrong, as usual. Mr. CHANDLER. As usual? Well, that is uncalled for. I think I will let the statement stand.

The CHAIRMAN. I am perfectly willing to let it stand.

Mr. CHANDLER. And if and when the nationalization of utilities aimed at under this bill is effected, the abuses of the past have not been a marker to what they will be in the years to come.

The CHAIRMAN. Why do you say the "nationalization" of them in this bill?

Mr. CHANDLER. We believe it is inevitable under the terms of this bill, in the course of a few years; and that is the general opinion.

The CHAIRMAN. That may be the general opinion because of the propaganda that has been put out by some of the utility people, which is just as false as a lot of other propaganda that has been put out and which has been circulated by some of the chambers of commerce which, I am sorry to say, are to some extent controlled by some of the utilities.

Mr. CHANDLER. Do I understand that you claim that the Ohio Chamber of Commerce is so controlled?

The CHAIRMAN. I do not know anything about that. I am assuming that it is a good deal the same as a lot of other chambers of commerce that have been dominated to a large extent by some of these utilities. But proceed with your statement.

Mr. CHANDLER. I will be glad to. But I represent all classes of business. It is ostrich policy for Washington to assume that nobody is against this bill but the utilities. True there are only about 5,000,

000 holders of utility securities in the country, but there are approximately 30,000,000 holders of listed securities in the Nation affecting over 15,000,000 families; about 63,000,000 bank accounts, about 64,000,000 insurance policies. Congress and the administration cannot open a general assault on business without a kick-back, and to brand those citizens who attend hearings, write letters and send telegrams to Washington "propagandists", using the term in an opprobrious sense, is an insult to the American people, and an assault upon the right of petition guaranteed by the Constitution of the United States.

The CHAIRMAN. Nobody objects to sending it here, but we do know that practically all of the letters that have come to the various Members of the Senate and of the committee have been as the result of requests of the utility people themselves to send the letters here, and likewise by their going out and having their employees make a houseto-house canvass, in some instances, to get letters written here. If you had seen the letters that have come in here you would know that they were propaganda letters, because most of them have been in the identical language.

Mr. CHANDLER. They had a right to do that.

The CHAIRMAN. Of course they had.

Mr. CHANDLER. And at least they are paying for the propaganda themselves and not having it paid for out of public funds voted by the taxpayers.

The CHAIRMAN. I disagree with you there. It is being charged up to the people of the country who use gas and electricity, and it will be written into the expenses of the utility companies.

Mr. CHANDLER. That is not tenable. Rates are not based on that at all.

The CHAIRMAN. Oh, yes; they are. If you know anything about rates you will know they are based upon the expenses of the company. Mr. CHANDLER. That is not tenable. They are based upon an engineering estimate of the cost of the property. We go into it in great thoroughness in Ohio.

The CHAIRMAN. Not just the cost of the property, by any manner of means. Rates are supposedly based upon cost of the property, but they are likewise based upon the expenses of the company.

Mr. CHANDLER. They are certainly not paid for out of public funds. We come to you representing the first State to be carved out of the great Northwest Territory and to be admitted to the American Union. It has furnished several Presidents to this Republic. Among the States it stands fourth in population and wealth, fourth in value of manufactured products, third in wages paid in manufacture, and fifth in annual retail sales. It has built up a great civilization between Lake Erie and the Ohio River, with its more than 40 colleges and its long line of distinguished men. It has always been loyal to this Union, loyal to the Federal Government.

Ohio protests against the invasion of its rights contained in the Wheeler-Rayburn holding company bill and considers the language in section 217

The CHAIRMAN. Do you think you speak for the State of Ohio? Mr. CHANDLER. For the great business interests of the State of Ohio.

The CHAIRMAN. Do you think you speak for the people of Ohio? Mr. CHANDLER. I think I do.

The CHAIRMAN. All right. You are taking in a good deal of territory.

Mr. CHANDLER. I am taking in the fourth State of the American Union. It is a very large and fine State. We consider the language in section 217 that "nothing in this title shall be construed to impair or diminish the powers of any State commission" an affront to the intelligence of its people. This bill would take away from the regulatory authorities of Ohio 91 percent of all regulation of electric utilities and make them subject to the Federal Power Commission. The CHAIRMAN. Have you read this bill?

Mr. CHANDLER. Yes, sir; I have also read the figures prepared by the Edison Institute.

The CHAIRMAN. That is an institute controlled by the utilities? Mr. CHANDLER. It is made up of educated and scientific men, and they are

The CHAIRMAN. Owned and controlled

Mr. CHANDLER. The figures are published and are subject to criticism if they are inaccurate.

The CHAIRMAN. I contend that they are inaccurate. Now, let me ask you this: Where do you find a provision in this bill that tells you that 90 percent of the business of the utilities will be regulated under this bill by the Government at Washington? What section of the bill is that?

Mr. CHANDLER. I have the sections named here on this paper. But you are taking my time, and I have only 15 minutes. The sections are 201, 202, 207, 208, 209, 203 (a), 203 (b), 204, 205, 206, 210, 301, 302, and 303. Those are all analyzed. I heard them analyzed before the House committee by very competent speakers.

The CHAIRMAN. You did not analyze them yourself?

Mr. CHANDLER. I do not claim to be competent to make a legal analysis of this highly complicated problem; and listening to these matters this morning ought to convince you that no layman is able to do that. I am only taking those authorities. I believe them to be sound.

But let us suppose it is not 90 percent; let us suppose it is 81 percent. It would take away 81 percent of our regulation of financial operations and make them subject to the Securities Exchange Commission.

The CHAIRMAN. Do you feel that the Government should not regulate those holding companies?

Mr. CHANDLER. I shall come to that in a moment.

The CHAIRMAN. I am asking you now.

Mr. CHANDLER. Absolutely. There is no shadow of doubt about it. The CHAIRMAN. You think the holding companies are a good thing and that they should go on?

Mr. CHANDLER. I think they should go on. I think it would be a shameful thing to destroy them.

The CHAIRMAN. I wanted to get your viewpoint.

Mr. CHANDLER. That is our viewpoint, and the viewpoint of Ohio business unanimously.

The CHAIRMAN. Unanimously?

Mr. CHANDLER. Practically unanimously. We are very sound thinkers in Ohio.

The CHAIRMAN. I have a lot of letters from Ohio that do not agree

The CHAIRMAN. From business men, who do not agree with your viewpoint.

Mr. CHANDLER. I would be interested to know who they are. Ninety-nine percent of the regulation now exercised by Ohio authorities would be subject to one or the other of these two Federal agencies. The Federal Government would reach its long arm over into Ohio and deprive us of the right to prescribe the kind of services to be rendered by utilities to our manufcturers and to our homes. It would make common carriers of our lines, and might tap them to our detriment. It would exercise either direct or indirect control over the rates to be charged. It would even take over the practical management of our Ohio utilities and result ultimately, as we firmly believe, but that you evidently disagree with, in the nationalization of our Ohio utilities. It would send an army of Federal employees within our borders to pry into our affairs, waste the time of our business men, and even go into the basements of our homes to inspect our meters.

That is what Washington proposes to do.

With a part of this we do not quarrel. A certain amount of supervision of interstate financial operations may justly be exercised by the Securities Exchange Commission

The CHAIRMAN. Did your chamber of commerce in Ohio send a protest against the passage of the Securities and Exchange Act?

Mr. CHANDLER. We protested against it in its original form and amendments were made as result of protests which we made in our propaganda, from all over the United States, and that is why we have a workable bill. We think it is now a workable act.

The CHAIRMAN. When did you come to that conclusion?
Mr. CHANDLER. It seems to be working.

The CHAIRMAN. When did you come to the conclusion, however? Mr. CHANDLER. That it is a workable act as it now operates? The CHAIRMAN. Yes. When did you come to that conclusion? Mr. CHANDLER. I cannot give you the date, but the exchanges seem to be operating, and the amendments which we forced by telegrams and other means have hammered it into apparently good shape. That is the way propaganda works.

But, in lieu of the other invasions of our prerogatives and the offensive system of regional districts hereinafter referred to, we suggest that the unregulated gap in interstate utilities be filled by a simple amendment to the bill, namely "to delegate to the Federal Power Commission the power to fix the price for any interstate transaction whenever the interested State commissions shall be in disagreement as to the proper price for such transaction." All other details, aside from financial transactions of an interstate character, should be left to the commissions of the several States. Now, I come to the regional idea.

The State of Ohio is proud of its history and jealous of its prerogatives. It looks with suspicion upon the "regional districts" set up in section 203 (a) as follows:

The Commission is empowered and directed to establish regional districts for the control of the production and transmission of electric energy, including inter