or unnecessarily complicates the structure of the public-utility system of which it is a part, or is detrimental to the subsidiary companies thereof or to investor or consumers. (Under certain conditions, the Securities Exchange Commissio: may defer action for a period not extending beyond Jan. 1, 1940.) Section 10B, part 4, provides that immediately after January 1, 1940, every registered holding company must dispose of all securities or be reorganized or dissolved insofar as it may be necessary to make every such company cease to be a holding company. (Under certain circumstances, the commission may permit a registered holding company to continue after Jan. 1, 1940. However, few companies would be able to qualify under this provision.) The effect of section 10B would be to force a liquidation of the assets of almost all holding companies in the next 21⁄2 years. As a result, it would be necessary for these companies to convert their assets into cash in order to pay off at par or better all bonds, debentures, other creditors and preferred stock of the holding companies. Under these circumstances, it would seemingly be impossible to obtain a fair value for these assets, and, in all likelihood, there would be little if anything remaining for the common stockholders. In a large percentage of cases, the preferred stockholders would receive only a fraction of the par value of their investments. We believe that the bill as a whole and particularly the above sections is so drastic and so harmful to investors that, if passed, it would result in irreparable damage to the investor. The utility business is comparatively young and is still in the early stages of technological development. Moreover, the industry is in continual need of capital for expansion, and the injury done to honest investors by enactment of this bill would destroy for a long period of time the present capital market of utility companies and which over the longer term would eventually result in poorer service for consumers. In addition, the beneficiaries of our trusts and estates will suffer great losses if this bill is passed in its present form. This institution believes in and advocates fair regulation of holding companies and is in no sense protesting against any legislation which endeavors to accomplish this. However, we have been entrusted with a great many funds for supervision and safekeeping for the benefit of a large number of beneficiaries whose income and well-being are absolutely dependent thereon. It is for the protection of these beneficiaries that we are asking you not to approve this bill in its present form. We are taking the liberty of making the following suggestions believing that they may be of some aid in formulating a bill that is constructive and in the interests of investors. 1. Accounting practices of holding companies should be strictly regulated by the Federal Government so as to make them uniform and not deceptive to the public. Earnings statements should be published monthly and full publicity given to all financial transactions. General corporate information concerning the holding company and subsidiaries should be filed with the Commission. (It should be borne in mind that the better companies already comply with most of this section.) 2. Upstream loans should be prohibited. Loans from holding companies to operating companies should be allowed only if the State commission expressly approves the loans. In the absence of a State commission, the Securities Exchange Commission should have the power to approve or reject said loans. 3. The Federal Power Commission should have control of all interstate rates not j already controlled by State commissions. 4. The holding companies should have the right to acquire securities in operating companies when expressly approved by State commission, or in the absence of a State commission, the Securities Exchange Commission shall have the powe to approve such purchase. 5. It would seem unnecessary, in our opinion, to consider further regulation of, the issuance of securities by either holding companies or operating companies The Securities Exchange Commission already has power to regulate, and does regulate effectively, the issuance and sale of all securities. In order to incorporate the above points into a fair and equitable bill, suggest that the House Interstate and Foreign Commerce Committee appoint small committee representing the interested parties. This committee can meet immediately and prepare legislation in the next week or so that would be fair and just to the public, the consumer, and the investor. We ask that the House Interstate and Foreign Commerce Committee consider this proposal as a constructive attempt to foster legislation that will fairly regulate and effectively control publ utility holding companies and their subsidiaries. CONGRESS) CONGRESS THE LIBRA THE LIBRARY, OF CONGRESS OF CONGRESS THE HE LIBE LIBRARY OF CONGRES" HE LIBRARY OF CONGRES. OF CONGRES 2 CF CU RY ESS S THE OF CONGRES HE LIBRARY OF CONGRESS THE LIBRARY OF CONGRESS THE LIBRARY OF CONGRESS, THE LI THE LIBRARY OF CONGRESS THE LIBRARY OF A THE LIBRARY OF CONGRESS THE LIBRARY THE LIBRARY OF CONGRES. CONGRESS_THE LIBRAFY OF CONGRESS THE LIBRARY OF CONGRESS THE LIEKARY OF CONGRESS A HE LIBRARY OF CONGRESS IBRARY OF CONGRESS THE LIBRARY OF CONGRES. 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