Page:United States Statutes at Large Volume 49 Part 1.djvu/848

 74TH CONGRES S. SESS. I. CH. 687. AUGUST 26, 1935. 803 [CHAPTER 687 .1 AN ACT A ugust 26, 1935 . To prov ide for control and regulation of public-utility holding companies, and 	 [ S. 2796 .1 for other purposes. [Public, No.333.] Be it enacted by the Senate and House o f Representatives o f the United States o f America in Congress assembled, That this Act may 19 Public Utility Act of be cited as the " Public Utility Act of 1935 ". TITLE I-CONTROL OF PUBLIC-UTILITY HOLDING COMPANIES NECESSITY FOR CONTROL OF HOLDING COMPANIES SECTIO N 1. (a) Public-utility holding companies and their sub- sidiary companies are affected with a national public inter est in that, among other things, (1) the ir secur ities a re widel y marke ted and distributed by means of the mails and instrumentalities of inter- state commerce and are sold to a large number of investors in dif- ferent States ; (2) their service, sales, construction, and other con- tracts and arrangements are often made and performed by means of the mails a nd inst rumental ities o f inters tate co mmerce (3) their subsidiary public-utility companies often sell and transport gas and electric energy by the use of means and instrumentalities of inter- state commerce ; (4) their practices in respect of and control over subsidiary companies often materially affect the interstate commerce in wh ich thos e compa nies eng age ; (5) th eir activities extending over many States a re not suscepti ble of effectiv e contr ol by any State and make difficult, if not impossible, effective State regulation of public-utility companies. (b) Upon the basis of facts disclosed by the reports of the Federal Trade Commission made pursuant to S. Res. 83 (Seventieth Con- gress, first session), the reports of the Committee on Interstate and Foreign Commerce, House of Representatives, made pursuant to H. Res. 59 (Seventy-second Congress, first session) and H. J. Res. 572 (Seventy-second Congress, second session) and oth erw ise di s- closed and ascertained, it is hereby declared that the national public interest, the interest of investors in the securities of holding com- pa nies and their sub sidia ry c ompan ies and a ffil iates, an d the int erest of consumers of electric energy and natural and manufactured gas, are or may be adversely affected- (1) when such investors cannot obtain the information neces- sary to apprais e the fi nancial positio n or ea rning po wer of the issuers, because of the absence of uniform standard accounts ; when such securities are issued without the approval or consent of the States having jurisdiction over subsidiary public-utility com- panies ; when such securities are issued upon the basis of fictitious or unsound asset values having no fair relation to the sums invested in or the earning capacity of the properties and upon the basis of paper profits from intercompany transactions, or in anticipa- tion of excessive revenues from subsidiary public-utility com- panies ; when such securities are issued by a subsidiary public- utility company under circumstances which subject such company to the burden of supporting an overcapitalized structure and tend to prevent voluntary rate reductions ; (2) w hen sub sidiary public- utility compani es are s ubjecte d to excessive charges for services, construction work, equipment, and materials, or enter into transactions in which evils result from an absence of arm's-length bargaining or from restraint of free and independent competition ; when service, management, construction, Title I-Control of public-utility holding compa nies. Necessity. Abuses; interest ad- versely affected by. Vol.47,p.1544. E nume rati on of.