Washington, D. C, February 15, 1929.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress; first session (approved February 15, 1928), regarding the investigation of certain electric power and gas utilities companies, that this commission ” report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation ” upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this eleventh interim report is respectfully submitted.

During January, field work was begun on the relations between utility groups and service organizations at the offices of three additional important groups —two in New York City and one in Boston.

This part of the investigation covers the extent to which holding companies or their stockholders control, or are financially interested in financial, engineering, construction, and management corporations, and the relations between these service organizations and holding companies and public utility corporations; and also the services furnished to public utility corporations by holding companies or their associated, affiliated, and subsidiary companies. Substantial progress has been made by the field accountants on the growth of capital assets and capital liabilities and of securities issues of important electric power and gas holding company groups mentioned in the previous interim report.

Several of the holding company groups have filled out and sent in a large proportion of the commission’s comprehensive financial and statistical report forms for their active operating public utility subsidiaries, and numerous individual operating public utilities have already made similar returns.

Work in the office was continued on records with respect to various aspects of the inquiry.

The hearing on the application made by the commission to obtain a court order to compel certain officers and employees of the Electric Bond & Share Co. to testify and to produce certain books and papers, is now fixed for February 15 in the District Court for the Southern District of New York.

The work, and engagements incident to this case, has interfered somewhat with hearings on the propaganda and publicity phase.

However, public hearings have been held and witnesses examined as follows:

Witnesses :

• William Henry Onken. jr., of Brooklyn, N. Y., editor. Electrical World.
• Henry C. Spurr, of Rochester, N. Y., editor, Public Utilities Reports (Inc.).
• Arthur Stedman Hills, Washington, D. C., manager and treasurer, Public Utilities Reports (Inc.).

JANUARY 18th, 1929

Witnesses :

• Paul S. Clapp, New York City, managing director National Electric Light Association.
• George F. Oxley, New York City, director, department of information, National Electric Light Association.
• M. G. Glaeser, Madison, Wis., professor of economics, University of Wisconsin.

HEARING. JANUARY 25. 1929
Witnesses :

• Judge Stephen Davis, New York City, joint committee of National Utility Associations.
• Horace M. Davis, Lincoln, Nebr., former director, Nebraska Information Bureau.

Herewith are transmitted three volumes of transcript of the above hearings (pages 6261 to 6529, inclusive). descriptive list of exhibits introduced since the last report is transmitted herewith which includes Nos. 15 1/2 and 4115 to 4166, inclusive (except numbers not offered as indicated in the list).

By direction of the commission. E. A. McCulloch, Chairman.

Washington, D. C., March 15, 1929.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress, first session (approved February 15, 1928), regarding:the investigation of certain electric power and gas utilities that this commission “report to the Senate within each30 days after the passage of the resolution and finally on the completion of the investigation upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this twelfth interim report is respectfully submitted.

During the period covered by this report the examination of the books of account of two holding-company groups was completed and work was begun on the operating companies of one of the groups. The field work on the relations between utility groups and service organization was begun at the offices of two other holding-company groups, one in New York City and one in Chicago.

On February 15 the commission’s application for a court order to compel certain officers and employees of the Electric Bond & Share Co. to testify and produce certain books and papers was argued in the United States District Court for the Southern District of New York. With the court’s permission, the commission made written offers of proof, and on March 9 filed a brief.

Hearings were held on March 13 and 14. Victor W. Hartley, secretary California Electrical Bureau, testified. Selections from material heretofore identified and of other material at hand were put into the record.

Further hearings set and witnesses subpoenaed are as follows:

March 20 :

• W. L. Frost, Los Angeles, Calif., president Pacific Coast Electrical Association. Herbert L. Cornish, Los Angeles, Calif.

March 21 :

• A. F. Hockenbeamer, San Francisco, Calif., president Pacific Gas & Electric Co., and member Public Policy Committee, National Electric Light Association.
• R. H. Ballard, Los Angeles, Calif., chairman Public Policy Committee, National Electric Light Association.

March 27:

• Norwood W. Brockett, Seattle, Wash., former secretary Washington State Committee on Public Utility Information and chairman Public Relations Section, Northwest Electric Light and Power Association, National Electric Light Association.

March 28:

• A. E. Wishon, San Francisco, Calif., secretary Light and Power Association.

Transcript of hearings of March 13 and 14 (pp. 6530 to 6627, inclusive) transmitted here with. Time has not permitted this to be read for corrections, but corrected copy will be furnished for printing.

Descriptive list of exhibits introduced (Nos. 4167 to 4195, inclusive) will follow as soon as completed.

By direction of the commission. E. A. McCulloch, Chairman.

Washington, April 15, 1929.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress, first session (approved February 15, 1928), regarding the investigation of certain electric power and gas utilities companies, that this commission ” report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation ” upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this thirteenth interim report is respectfully submitted.

During the period covered by this report the examination of the books of account of certain holding companies was continued and work was begun on one additional holding company in Chicago.

Field work was continued on relations between utility groups and service organizations at the offices of important groups in New York City, Boston, and Chicago.

Hearings were held as follows :

March 20, 1929: At this hearing no witness was examined, but a large volume of California data was introduced, including certified copy of transcript of the hearings before the California Senate special committee as to activities and expenditures of power companies against the so-called water and power act of 1922 (No. 19 on the ballot) , and certified copies of expenditures in 1924 and 1926 by power companies against such an act.

March 22, 1929:

• Walter L. Frost, Los Angeles, Calif., former president of Pacific Coast Electrical Association.

March 28, 1929 :

• Norwood W. Brockett, Seattle, Wash., vice president Northwest Electric Light and Power Association (geographic branch of National Electric Light Association), and former secretary of the Washington Public Utility Information Bureau.

Some postponements have been granted on urgent applications on what seemed sufficient reasons. It is hoped to complete the inquiry in chief as to association activities on the propaganda phase of the hearings by the end of the month. Soon thereafter witnesses called or designated by the utility associations will be heard. In the matter of the application pending in the United States District Court, Southern District of New York, to compel certain officers and employees of the Electric Bond & Share Co. to testify and produce certain books and papers, respondents’ brief has been filed and the commission has filed a reply brief and the case is now awaiting the decision of the court.

Transcripts of the above hearings are transmitted herewith (pp. 6628-8788, inclusive), together with list of exhibits. (Exhibits 4195A to 4251, inclusive.)

By direction of the commission. Edgar A. McCulloch, Chairman.

Washington, D. C, May 15, 1929.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83,Seventieth Congress, first session, approved February 15, 1928, regarding the investigation of certain electric power and gas utilities companies, that this commission ” report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation ” upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this fourteenth interim report is respectfully submitted.

Since the last interim report accountants began an examination of the accounts of operating companies in two important holding company groups, and accountants were sent to another holding company. Summaries were being prepared on the growth of capital assets and capital liabilities, the issuance of securities and the service fees of three holding companies, in preparation for public hearing.

Field work on the relations between utility companies and service organizations was completed at the offices of one of the more important management groups.

Preparation of information now available on inter-corporate relationships in general is rapidly nearing completion.

Since the last report various witnesses have been examined. Certain of these were inquired of as to the investments in newspapers made by the International Paper & Power Co. or its subsidiaries.

Hearings were held as follows:

April 16. 1929: At this hearing selections from exhibits previously identified were offered.

April 17, 1929:

• State Senator Herbert C. Jones, San Jose, Calif.

April 25, 1929:

• William T. Crawford, Westwood, Mass., secretary Sierra-Pacific Power Co.

April 30, 1929:

• Robert Lincoln O’Brien, Dedham, Mass., formerly editor Boston Herald and Traveler ;
• James Garfield, clerk, Boston Publishing Co. ;
• A. R. Graustein, New York City, president International Paper & Power Co. and of various subsidiaries ;
• John R. Macomber, Boston, Mass., member executive committee New England Power Association, and of International Paper Co.

May 2, 1929 :

• A. Emory Wishon, San Francisco. Calif., former secretary Light & Power Association of California ;
• James P. Pollard, San Francisco, Calif., secretary Light & Power Association of California.

May 10, 1929:

• William La Yarre, Hall, New York City and Augusta, Ga. Harold Augusta. Ga.

May 11, 1929:

• S. S. Wyer, Columbus, Ohio, consulting engineer on public utilities.

Additional hearings have been set and witnesses subpoenaed, as follows :

May 15, 1929:

• Frank E. Gannett, Rochester, N. Y., newspaper owner;
• S. A. Thomason, Chicago, 111., newspaper owner.

May 16, 1929:

• Frank D. Comerford, Boston, Mass., vice president International Paper & Power C. ;
• H. E. Head, New York City, vice president and assistant to the president. International Paper & Power Co. ;
• Channing Cox, Boston, Mass.. attorney;
• Richard Grozier. Boston, Mass., publisher Boston Post;
• William O. Taylor. Boston, Mass., publisher Boston Globe.

May 16, 1929:

• R. B. Chandler. Mobile, Ala., publisher Press:
• T. M. Stevens, Mobile, Ala., attorney ;
• D. P. Bestor, jr., Mobile, Ala., president First National Bank.

Transcript of the above hearings is transmitted herewith (pp. 6789 to 7314), together with list of exhibits offered and introduced (Nos. 4249 to 4322) and of exhibits 2333 to 2338, inclusive, 2363, 2383, 2497, 2500, 2525, 3665, 4127, 4134, 4138, 4139, 4143, A, B, C, D. 4154, 4213 to 4217, inclusive, 4230 to 4235, inclusive, 4186, previously identified.

By direction of the commission: Edgar A. McCulloch, Chairman.

Washington, June 15, 1929.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress, first session, approved February 15, 1928, regarding the investigation of certain electric power and gas utility companies, that this commission ” report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation ” upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this fifteenth interim report is respectfully submitted.

Since the last interim report field-accounting work was begun on two large operating subsidiaries of two important holding companies, and the accounting work was continued on three holding companies and one important operating company. Summaries were nearly completed on the growth of the capital assets and capital liabilities, on the issuance and purchase of securities, and on service fees for six holding and service companies in preparation for public hearings. Field work was begun on the relations between utility companies and service organizations in the offices of four manage ment groups. The preparation of all information available on inter-corporate relationships in general is nearing completion.

The following hearings have been held since last report :

May 15, 1929:

• Samuel E. Thomason, president Bryan-Thomason Newspapers (Inc.), Chicago;
• Frank E. Gannett, newspaper owner, Rochester, N. Y.;
• Edwin B. Jeffress, editor Greensboro Daily News, Greensboro, N. C.

May 16, 1929 :

• Richard Grozier, owner and publisher Boston Post, Cambridge, Mass.;
• F. D. Comerford, president New England Power Association and director International Paper Co., Boston, Mass.;
• Charming H. Cox, ex-governor and attorney, Boston, Mass.;
• Neil C. Head, vice president and assistant to president of International Paper Co. and International Paper & Power Co., New York, N. Y.

May 17, 1929:

• Charles J. O’Malley, advertising agent, Boston, Mass.;
• R. B. Chandler, publisher Mobile Press, Mobile, Ala.;
• Daniel P. Bestor, jr., president First National Bank, Mobile, Ala.;
• E. D. DeWitt, newspaper broker, New York, N. Y.

May 23, 1929:

• Thomas M. Stevens, attorney, Mobile, Ala.

June 12, 1929 : Introduction of exhibits.

June 13, 1929 :

• Col. Ira C. Copley, newspaper owner, San Diego, Calif.;
• W. J. Sylvester, managing director Industrial Conservation Board (Inc.), Chicago, I11.

June 14, 1929:

• J. T. Newcomb (recalled).

A hearing is set for June 19, at which the following will appear:

• F. W. Collins, president Richmond Development Co., New York City.
• Joseph F. McGowin, director Mobile Press, Mobile, Ala.
• Ernest F. Ladd, president Merchants’ National Bank, Mobile, Ala.
• R. B. Chandler, publisher Mobile Press, Mobile, Ala.
• Victor H. Hanson, proprietor and publisher Birmingham News, Birmingham, Ala.
• Thomas W. Martin, president Alabama Power Co., Birmingham, Ala.
• Logan Martin, general counsel Alabama Power Co., Birmingham. Ala.

Transcript of the above hearings is transmitted herewith (pp. 7315 to 7902, inclusive), together with list of exhibits offered and introduced since the last report, as follows:

Nos. 4323 to 4444, inclusive, and also exhibits Nos. 3664. 3666, 4163, 4175, 4301, 3663, 4319, 4320.

By direction of the commission. Edgar A. McCulloch, Chairman.

Washington, July 15, 1929.
to the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress, first session ‘ (approved February 15. 1928), regarding the investigation of certain electric power and gas utilities companies, that this commission ” report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation ” upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this sixteenth interim report is respectfully submitted.

Since the last interim report examiners of the commission have begun an examination of the accounts of six operating companies in three important holding company groups. Summaries were being prepared on the growth of capital assets and capital liabilities, the issuance of securities and the service fees of three holding companies, in preparation for public hearing. Field work on the relations be tween utility companies and service organizations was completed at the offices of two of the more important management groups, and work was begun on two new groups and on one new subgroup.

Since the last report various witnesses have been examined. Certain of these were inquired of as to investments in newspapers.

The hearings held were as follows :

June 19. 1929

• A. B. Aldridge, president Southeastern Fuel Co., Birmingham, Ala.
• William Logan Martin, attorney. Alabama Power Co., Birmingham, Ala.
• Joseph F. McGowin, Mobile, Ala., publisher Mobile Press.
• Victor H. Hanson, publisher Birmingham News and Birmingham Age-Herald, Birmingham, Ala.
• R. B. Chandler, president Mobile Press Publishing Co., Mobile, Ala.
• Thomas W. Martin, president Alabama Power Co. and of the Southeastern Power & Light Co., Birmingham, Ala.
• Ernest F. Ladd, president Merchants National Bank, Mobile. Ala.

June 27, 1929

No witnesses. Miscellaneous data were introduced.

At the close of the hearing of Thursday, June 27, it was announced that public hearing will be resumed on or immediately after September 10, 1929. Rebuttal testimony will be introduced by representatives of the utilities with respect to matters heretofore considered. The utilities companies’ rebuttal hearings were postponed at their own request. Further hearings will also be held for the introduction of testimony by the commission’s chief counsel.

Transcript of the hearings covered by this interim report is transmitted herewith (pp. 7903 to 8118, inclusive), together with list of exhibits offered and introduced (Nos. 4445 to 4489, inclusive), and of Exhibits Nos. 4367, 4368. 4369, 4424, 4425, and 4426, previously identified.

By direction of the commission: Edgar A. McCulloch, Chairman.

Washington, October 15, 1929.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83. Seventieth Congress, first session (approved February 15, 1928). Regarding the investigation of certain electric power and gas utilities companies, that this commission “report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation “upon the matters specified in the resolution, and that it transmit there with the stenographic report of the evidence taken, this seventeenth interim report is respectfully submitted.

Since the last interim report (July 15), the commission’s accountants have been working in the offices of 12 electric and gas companies in various parts of the country developing the facts with respect to the growth of capital assets and capital liabilities and the costs of the charges of service companies. The amount of time spent on field work has been greatly increased in proportion to the progress made owing to the delay of some of the large holding company groups in returning the commission’s comprehensive “report of utility corporations.” and also the failure of certain holding companies to submit such reports in many important instances, although actually prepared by their subsidiaries. Even more serious has been the withholding from the commission’s examiners by some companies of pertinent records relating to important mergers and other financial transactions. The numerous complicated mergers and consolidations effected through the use of intermediaries and syndicates, together with the lack of uniformity and the complexity of holding company accounting methods and the employment of numerous subsidiary companies, have made the work of tracing the growth of assets laborious at best, even for experienced public utility accountants.

A thorough study is being made of the method of issuing securities, the price or value received therefor and the fees, bonuses and commissions paid for services. A number of the holding groups have organized banking departments which buy and securities for their sub-holding and operating companies. Security
issues, purchases, and sales have to be traced through these banking departments before the pertinent facts can be determined.

In connection with the assembly of facts respecting the value or detriment to the public of holding and service companies a survey is being made of some of the properties of different groups and other careful study undertaken of operating costs, engineering and other Services rendered, of interconnection economies effected, of rate policies, etc.

The data secured on the organization of electric power and gas utilities and on the relations between them and their holding companies and service organizations comprise the names of officers, directors, and stockholders of all companies reporting; securities of reporting companies held by other companies, including advances to and from such companies; securities of other companies held by reporting companies, giving extent of stock control of such companies and all advances to and from such companies; service relations during 1927, showing servicing companies, companies serviced and kind of service, together with form of contract under which service is given: recapitulation of records of each individual holding position as officer, director, or stockholder in two or more companies, showing such positions; property of reporting company leased and operated by respondent; sales of electrical energy by reporting company under interchange of other agreement, showing names of vendees; purchases of electrical energy by reporting company under interchange or other agreement, showing names of vendors; and sales and purchases of gas by reporting company, showing names of vendees or vendors and nature of agreements.

The investigation is being pressed with as much expedition as the capacity of present staff of employees will admit of and the appropriation of funds now available does not permit employment of additional accountants. The need of the services of more accountants is now manifest if the investigation is to be pursued with desired expedition. One hearing has been held (October 3, 1929), at which certain exhibits were introduced and the following witnesses testified:

• Paul A. Schoellkopf, Niagara Falls, N.
• Paul S. Clapp, New York, N. Y.
• M. O. Leighton, Washington, D. C.

Due to the illness of the chief counsel the reception of rebuttal testimony by representatives of the utilities has been postponed, but will be taken up as soon as possible upon the chief counsel’s recovery.

On October 7 there were transmitted to the Senate, pursuant to Senate Resolution 112, Seventy-first Congress, first session, duplicates or true copies of Exhibits 1 to 126, inclusive (with exceptions noted), together with suggestions for printing as directed in the resolution, these being the exhibits to accompany Part I of the Senate print.

Transmitted herewith is a copy of the transcript of the hearing of October 3, 1929 (pp. 8119–8168, inclusive) and descriptive list of exhibits introduced on that date (Exhibits 4490 to 4507, inclusive, and Exhibits 3429, 3574.A to 3591, inclusive, except Exhibits 3578 and 3589, and Exhibits 4325, 4455, and 4456).

By direction of the commission. E. A. McCulloch, Chairman.

JANUARY 20, 1930.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress, first session (approved February 15, 1928), regarding the investigation of certain electric power and gas utilities companies, that this commission “report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation” upon the matters specified in the resolution, and that it transmit there with the stenographic report of the evidence taken, this nineteenth interim report is respectfully submitted.

Hearings were in progress January 15, and this report is transmitted on January 20 in order to send with it all the testimony offered by counsel for the utility associations in relation to the propaganda or publicity phase of the investigation as to said associations.

Since the last interim report (December 16, 1929) the commission’s accountants have begun work on the accounts of two important operating groups of one of the large holding companies, and have continued work in the offices of five holding companies and on the books of six other electric and gas operating companies, developing the facts respecting the growth of their capital assets and capital liabilities, the methods, costs, etc., of issuing securities, and the costs, charges, and profits of service companies, Summaries are being prepared on holding-company groups and their principal companies, in preparation for public hearings which it is expected. be begun on an important holding company group at an early date.

Work has been continued during the month in the field and office on inter-corporate relations as shown by security holdings, common stock holders, officers and directors, and management contracts, with Special attention to the methods and extent of management under contracts between holding companies and their associated, affiliated and subsidiary management, engineering, construction, financing, and operating companies. The information available on these matters is being summarized as rapidly as the personnel on this work permits.

Public hearings were held on January 8, 9, 10, 14, 15, 16, and 18. These hearings were devoted to the presentation by counsel for the joint committee of National Utility Associations and the National Electric Light Association of matter pertinent to the propaganda or publicity phase of the investigation as to said associations and the State utility information bureaus.

The matter was presented in the form of statements by counsel and exhibits, and by the testimony of one witness, Mr. Preston Arkwright, president of the Georgia Power Co., Atlanta, Ga., and president of the National Electric Light Association from July 1, 1928, to July 1, 1929. Transcript of the said hearings is transmitted herewith (pp. 8169 to 8628, inclusive), together with a list of exhibits offered and introduced, designated as association’s Exhibits Nos. 1 to 30, inclusive; and commission’s Exhibits Nos. 4508 to 4514, inclusive.

By direction of the commission. GARLAND S. FERGUSON, Chairman

Washington, March 15, 1930.
To the Senate of the United States:

Pursuant to the direction of the Senate in Senate Resolution 83, Seventieth Congress, first session (approved February 15, 1928), regarding the investigation of certain electric power and gas utilities companies, that this commission “report to the Senate within each 30 days after the passage of the resolution and finally on the completion of the investigation” upon the matters specified in the resolution, and that it transmit therewith the stenographic report of the evidence taken, this twenty-first interim report is respectfully submitted.

During the month following the last interim report work of the commission’s examiners has continued at the offices of six holding companies and six operating companies, chiefly in connection with the financial aspects of their business, but covering also questions of inter-company relations and control, etc.

Since the date of the last interim report public hearings as to the American Gas & Electric Co. and its subsidiary and associated companies were begun and completed. The American Gas & Electric Co. is a management as well as holding company and its system embraces 10 subsidiary operating utility companies operating in nine States. The operation of eight of these utility companies is connected by a main transmission line running northwest from the southern line of Virginia to points in southern Michigan, with branch lines into Tennessee and Kentucky, and with two detached operations in Pennsylvania and New Jersey.

The hearings covered chiefly the financial and management aspects of the American Gas & Electric group, including,

(1) growth of capital assets and capital liabilities,
(2) the issues of securities and the proceeds and expenses of such issues,
(3) the extent of interest of the holding company in subsidiary public utilities and other companies and their relations with each other,
(4) the services furnished to the public utility companies by the holding company or associated companies, and the earnings and expenses connected therewith,
(5) the advantages or disadvantages of holding companies,
(6) their activities with respect to municipal ownership, and other matters specified in the Senate Resolution 83.

The hearings occupied 12 days, the first being on February 24, 1930, the final hearing being concluded late yesterday afternoon, March 14, 1930. Six examiners of the Federal Trade Commission were called as witnesses, including public utility experts and account ants, 11 officials of the American Gas & Electric group of companies, and 2 other persons formerly connected with their affairs.

The transcript of the record and the exhibits relevant thereto will be transmitted as soon as the necessary verification of the transcript of the record and the preparation of the exhibits can be taken care of.

Public hearings will be resumed, it is planned, in a short time, and will involve the examination of another of the important holding and management groups. The commission expects to allow the pertinent accounting statements prepared by its examiners to be reviewed by the companies’ representatives in order to hear objections as to any matters of fact and thus to obviate unnecessary disputes in the hearings as to the results shown on the books and records. This procedure is economical of time in the long run, but involves an intermission between the hearings for different groups of companies.

By direction of the commission. GARLAND S. FERGUSON, Jr., Chairman.