1928 Walsh Investigation of U.S. Electric Industry – Part 3

Following the February 15th, 1928 passage of Senator Thomas Walsh’s Resolution 83 that ordered the U.S. Federal Trade Commission (FTC) to carry out an investigation of the country’s electric industry, the agency worked until the end of 1935 on the probe. Once a month, the FTC produced a summary of the investigation along with all public testimony and exhibits put into the record.

Here is volume 22-30 of the FTC’s monthly summaries.

FTC Investigation: Volume 22 April 17th, 1930 Summary

April 17, 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-second interim report is respectfully submitted.

Hearings relative to the Electric Bond & Share Co. were begun April 16.

Since the last interim report the commission’s examiners began an examination of two new operating companies and continued the accounting examination at the office of five holding 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. The examination of the accounts of two holding companies previously completed through the year 1927 was being brought down to date, preparatory to early hearings, and the field accounting examination of another holding company was completed.

There are transmitted herewith transcript of the testimony and exhibits constituting the record in the hearings relative to the American Gas & Electric Co.

by direction of the commission. Garland S. Ferguson, Jr., Chairman,

FTC Investigation: Volume 23-24 May 15th, 1930 Summary

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

Hearings relative to the Electric Bond & Share Co. and the holding companies within the Electric Bond & Share Co. group began on April 16 and continued (with intermissions) until May 9, during which time 12 days were occupied in the actual taking of testimony.

The organization, structure, assets, liabilities, supervision agreements, and other matters relating to the Electric Bond & Share Co., the American Power & Light Co., and the Electric Power & Light Corporation were examined. Consideration of the group was not completed.

Owing to the dependency in the United States District Court for the Southern District of New York of the proceeding by which the commission is seeking to compel officials of the Electric Bond & Share Co. to answer certain questions and produce certain documents pertinent and necessary to the investigation, no officers or employees of holding companies within the Electric Bond & Share Co. group were called as witnesses during the hearings herein described. Employees of the Federal Trade Commission testified to such facts and produced such documentary evidence as they have been able to obtain from the records of the several companies involved or elsewhere.

Further hearings will be necessary after the conclusion of the suit if the commission is successful therein. A more detailed explanation of the origin and purpose of the suit appears in the commission’s eighteenth interim report, Senate Document 92, part 18, Seventieth Congress, first session.

The transcript of the record and the exhibits will be transmitted as soon as a careful verification of the transcript, which is made necessary by the numerous figures involved, and the preparation of the exhibits can be completed.

The public hearings will be resumed on or about May 27, at which time another holding company group (the North American Co.) will be examined.

Since the last interim report the commission’s accountants began an examination of 1 large holding company, completed the field examination of 1 holding company and 3 operating companies and continued the accounting examination at the offices of 4 holding companies and 8 operating companies, chiefly in connection with the financial aspects of their business, but covering also questions of inter-company relations and control, etc. The examination of the accounts of one holding company previously completed through the year 1927, was brought down to date, preparatory to early hearings.

A field engineering inspection of the generating stations, transmission lines and distribution systems, and a critical study of the operations of one of the large holding company groups was begun.

By direction of the commission. Garland S. Ferguson, Chairman.

FTC Investigation: Volume 25 July 15th, 1930 Summary

Washington, July 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 there with the stenographic report of the evidence taken, this twenty-fifth interim report is respectfully submitted.

The examination of the W. B. Foshay Co. group, which had occupied two days (June 12 and 13) of the period covered by the last interim report, was continued during June 16 and 17. Hearings on the National Power & Light Co. group were held on June 23, 24, and 25, on which last date certain evidence as to control and publicity relating generally to the Electric Bond & Share Co. group (of which National Power & Light Co. is a part) was also put into the record.

The transcript of the record of the hearings on the W. B. Foshay Co. for the four days above mentioned and the exhibits relating thereto are transmitted herewith. As soon as the verification and correction of the transcript and the preparation of the exhibits relating to the hearings on the National Power & Light Co. can be completed they will also be forwarded.

Since the last interim report the commission’s accountants began the examination of an important group of operating companies of a certain large holding company and also of two other important operating companies, and have continued the accounting examinations of four holding companies and six operating companies, chiefly in connection with the financial aspects of their business, but covering also inter-company relations, control, etc. Examination was also being made of the company interrelations and servicing methods of several other groups. A field, engineering inspection of the generating stations, transmission lines, and distribution systems, and a critical study of the operations of four holding-company groups were continued.

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

FTC Investigation: Volume 26 October 17th, 1930 Summary

October 17, 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 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 twenty-sixth interim report covering the period from July 15, 1930, to date, is respectfully submitted.

The fire which, on August 30, 1930. wrecked the building then occupied by the Federal Trade Commission, destroyed the reports which commission examiners had prepared for public hearings relating to eight companies, as to which hearings had not been held up to that date, destroyed some or all of the field analysis sheets, together with many prepared exhibits pertaining to four other companies, and also the exhibits prepared by commission accountants to accompany the report on a thirteenth company. Much time and expense have already been required and more will yet be needed in replacing these.

There was additional loss of the time of most of that portion of the personnel employed in Washington at the time of the fire, because of interruption of their work and of diversion of their time and” efforts to salvaging equipment and reconditioning water-damaged work papers. Nevertheless, the prosecution of the investigation, as ordered by the Senate, has proceeded without substantial interruption.

September 29 and 30, and October 1 and 2, 1930, public hearings were held on all phases of the inquiry relative to Carolina Power & Light Co. and the Minnesota Power & Light Co., operating companies in the Electric Bond & Share group.

Since the last interim report a field engineering inspection and study of the generating stations, transmission lines, and distribution systems of the large gas and electric operating companies in the Pacific Northwest and Pacific Coast States has been completed. A similar study was also made of the Minnesota Power & Light Co. This work covers a careful inspection of the operating properties, and a critical study of the operating statistics and operating costs of electric and gas companies.

The field accounting examination of the books of account of five holding companies and six operating companies was continued and the commission’s accountants completed the accounting examination of one holding company and of eight important operating companies. Examination was also made of the extent and method of inter-company control and management of a number of holding companies and of their subsidiary and affiliated operating, management, servicing, and investment companies.

Further public hearings on all phases of the investigation covering one of the large holding companies, it is expected, will be held early in November.

The transcript of testimony taken September 29 to October 2, 1930, inclusive, relative to the Carolina Power & Light Co. and Minnesota Power & Light Co. bearing the page numbers 11581 to 11857 inclusive, is transmitted herewith. Accompanying this report are also exhibits introduced at said hearings numbered 4704 to 4714 inclusive.

The transcript of all hearings on the publicity or propaganda phase of the inquiry has now been printed as parts 1 to 20, inclusive, of the Senate print. Selections from the exhibits produced at said hearings numbered from 1 to 4514 inclusive, as well as the association exhibits introduced by counsel for the utilities, numbered from 1 to 30 inclusive, have also been printed in volumes bearing numbers which correspond to numbers given the printed transcript of testimony wherein said exhibits are referred to. Further testimony and exhibits as to this phase of the resolution have been or will be offered in the hearings relating to individual groups or companies.

The transcript of the testimony and accompanying exhibits relating to American Gas & Electric Co. have been printed as part 22 of the Senate print. Transcript of the hearings and the accompanying exhibits as to the Electric Bond & Share Co. and allied holding companies, American Power & Light Co. and Electric Power & Light Corporation are being printed as part 23. The transcript and exhibits relating to the W. B. Foshay Co. group and the National Power & Light Co. (the latter being a holding company of the Electric Bond & Share group) are in page proof and will appear as parts 24 and 25 of the Senate print. .

By direction of the commission. Garland S. Ferguson, Jr., Chairman.

FTC Investigation: Volume 27 November 18th, 1930 Summary

Federal Trade Commission,
Washington, November 18, 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 classes of operating electric power and gas utility companies and of holding companies, and associated engineering, finance, and construction 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-seventh interim report covering the period from October 15 to November 15, 1930, is respectively submitted.

November 12, 13, 14, and 15, 1930, public hearings were held on all phases of the inquiry as to the Southeastern Power & Light Co. and Southeastern Securities Co., which very recently have been merged into the Commonwealth & Southern Corporation. The next hearing is set for December 2, to take up Georgia Power Co.

The field accounting and inspection work of other groups and companies are being continued as rapidly as the available force permits.

Since the last interim report a field engineering inspection of the principal generating stations, transmission lines, distribution systems, and study of operating statistics of the six electric public utilities of the former Southeastern Power & Light Co. group, operating in Florida, Mississippi, Alabama, Georgia, and South Carolina, was completed. Field accounting examinations of the books of account of six other holding and sub-holding companies and of five electric and gas operating companies were continued. Accounting reports

are being prepared on the financial aspects of holding and operating companies and reports on the extent and methods of inter-company ownership and control and of management and service relations on five important groups.

Transmitted herewith is transcript of the testimony taken during the period covered by this report and duplicates of the exhibits introduced, together with suggestions as to printing as directed by Senate Resolution 112, dated September 9, 1929. The transcript pages are 11858 to 12206, inclusive, and the exhibit numbers are 4715 to 4736, inclusive, except Nos. 4728, 4729, and 4730, which were not offered.

By direction of the commission. Garland S. Ferguson, Jr., Chairman

FTC Investigation: Volume 28 December 15th, 1930 Summary

Federal Trade Commission,
Washington, December 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 classes of operating electric power and gas utility companies and of holding companies, and associated engineering, finance, and construction 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 eighth interim report covering the period from November 15 to December 15, 1930, is respectfully submitted.

December 2, 3, and 4, 1930, public hearings were held on all phases of the inquiry as to the Georgia Power Co. and its predecessor and constituent companies. The witnesses were Carl H. Depue, accountant, and Judson C. Dickerman, engineer, both of the commission’s economic staff; L. K. Starr, former director of publicity of the Georgia Power Co.; E. II. Griffin, former member of the Legislature of Georgia; P. S. Arkwright, president of the Georgia Power Co.; and F. E. Shumate, a vice president of the Georgia Power Co. The Georgia Power Co. has now become a part of the Commonwealth and Southern Corporation group.

Since the last interim report the commission’s accountants have completed the examination of a large holding company and of its principal subsidiary operating companies. The field examination of five important holding companies was continued. Reports are being prepared on the management, service relations, and corporate interrelations of holding companies, service organizations, and operating companies, and on their financial and engineering aspects in several utility groups, preparatory for public hearings.

Transmitted herewith is transcript of the testimony taken during the period covered by this report, and duplicates of the exhibits introduced, together with suggestions as to printing as directed by Senate Resolution 112 dated September 9, 1929. The transcript pages are 12207 to 12484, inclusive, and the exhibit numbers are 4511, 4512, and 4737 to 4777, inclusive, except Nos. 4749, 4750,4761, and 4767, which were not offered.

The next hearings will be held shortly after the holidays.

By direction of the commission. Garland S. Ferguson, Jr., Chairman.

FTC Investigation: Volume 29 January 15th, 1931 Summary

Washington, January 15, 1931 .
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 twenty-ninth interim report covering the period from December 15, 1930, to date, is respectfully submitted. Public hearings are scheduled as follows :

Washington Water Power Co., of Spokane, Wash., beginning January 15, 1931.
Alabama Power Co., of Birmingham, Ala., beginning January 27, 1931.

Field examinations of three important holding companies and a number of their sub-holding and operating companies have been completed and reports are being written preparatory to public hearings on them. Field examinations of two other holding companies have been begun during the month.

By direction of the commission. C. W. Hunt, Chairman.

FTC Investigation: Volume 30 February 17th, 1931 Summary

Federal Trade Commission,
Washington, February 17, 1931.
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 classes of operating electric power and gas utility companies and of holding companies, and associated engineering, finance, and construction 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 thirtieth interim report covering the period from January 15 to February 15, 1931, is respectfully submitted.

Public hearings were held on January 15 and 16, 1931, touching the Washington Water Power Co. The witnesses were:

Col. William H. England,
Judson C. Dickerman,
W. B. Horne,
Edwin T. Harris,
Harry H. Carter,

all of the commission’s economic division staff. Company officials will appear later. During these hearings the following important reports were put into the record:

Report on Examination of Accounts and Records of the Washington Water Power Co., which includes the organization history, the capital stock growth, earnings, expenses, etc., by Edwin T. Harris (Exhibit 4782). Report on Organization, Properties, and Operations of the Washington Water Power Co., by Judson C. Dickerman (Exhibit 4780).

Interstate Transmission of Electric Energy of the Washington Water Power Co., by Col. William H. England (Exhibit 4778). Inter-corporate Relations of the Washington Water Power Co., by William B. Horne (Exhibit 4781).

The transcript of the testimony (pages 12485 to 12616, inclusive) and the accompanying exhibits (numbers 4778 to 4789, inclusive) , relating to the above, have been transmitted to the Senate by supplemental report dated February 2, 1931, for printing in connection with the twenty-ninth interim report.

Public hearings were held relating to the Alabama Power Co. on January 27, 28, 29, 30, and on February 5 and 6, 1931. The members of the commission’s economic staff who testified relating to the Alabama Power Co. are:

Judson C. Dickerman,
W. B. Horne,
R. J. Ryder. Company

witnesses who were called and testified are:

Thomas W. Martin, president;
W. J. Baldwin, former director of publicity ; and
C. A. Beasley, attorney.

During these hearings the following important reports were put into the record :

Report on Examination of Accounts and Records of the Alabama Power Co, which includes the organization history, the capital-stock growth, earnings, expenses, etc., by Robert J. Ryder (Exhibit 4793).
Report on Organization, Properties, and Operations of the Alabama Power Co., by J. C. Dickerman (Exhibit 4790).
Inter-corporate Relations of the Alabama Power Co., by William B. Home (Exhibit 4801).

Transcript of the testimony as to the Alabama Power Co. (pp. 12617 to 13079, inclusive) and accompanying exhibits (4790 to 4823 inclusive, except 4809, withdrawn), are transmitted herewith for printing.

Since the last interim report field examinations of the accounts of a large sub-holding and operating company and its subsidiaries were completed. Examinations of four large holding companies, two of which are near completion, were continued; also of an important sub-holding company. Field work was commenced on an operating subsidiary of one of the holding companies referred to above.

Accountants’ reports were completed on one large sub-holding company and one large operating company. Satisfactory progress has been made in the preparation of reports on a number of other holding and operating companies on which the field work had been completed prior to the date of the last interim report. A number of reports were completed on the management, service relations, and corporate interrelations of holding companies, service organizations and operating companies for public hearings, and such work was started on other companies. An engineering field inspection of the physical properties and operations of one of the groups was begun.

Public hearings will begin Wednesday, February 25, on the New England Power Association group.

By direction of the commission. C. W. Hunt, Chairman.