Rear Row Voice

On the subject of utility holding companies nearly everyone had had his say. Franklin Roosevelt had asked for what practically amounted to their abolition. Powermen and investors had wrung their hands in loud anguish. Senator Wheeler had favorably reported the bill. Secretary Roper's Business Advisory Council had counseled moderation. Senator Norris had lectured the Senate with giant charts showing the tentacles of the power octopus. Young Legalites Corcoran and Cohen, who drafted the bill, had given their advice privily in the cloakrooms. The whole Senate had enjoyed ten days of debate. Wiseacres sensed that 67 proposed amendments would soon be acted on, that the bill would be passed--not as originally drafted giving the Securities & Exchange Commission the right to exterminate any holding company but as a fairly healthy measure of reform. Then late one afternoon last week when no Senator desired to hear any more on the subject, an unfamiliar voice piped up:

"Mr. President, I have had some experience with State regulation of utilities."

It was not a cultivated voice. It carried a New England twang. Senator Sherman Minton of Indiana, lolling in the presiding officer's chair, peered toward the rear of the Chamber. A stocky man with a large flat face and slightly twisted nose was standing at a desk. Mr. Minton, who went to the Senate only last January, had never seen the gentleman open his mouth before except 1) to take a chew of Five Brothers* and squirt tobacco juice at the spittoon beside his chair; 2) to pass the time of day with one of his strolling colleagues; 3) to vote "aye" on Administration measures. Indeed the Senate had only heard that voice once before, in March year ago, when it delivered a short homily in favor of Franklin Roosevelt's St. Lawrence Waterway proposal. Senators who had been on the point of leaving the Chamber tarried to hear that unfamiliar sound.

The speaker was Fred Herbert Brown. Twenty-eight years ago Bostonians knew him for a couple of seasons as catcher on their Braves. Then he retired to his native New Hampshire, became a small-town lawyer. He did not again emerge into public life until 1914 when he was elected Mayor of Somersworth, was later appointed U. S. District Attorney by Woodrow Wilson. In 1922 he gained a second brief lease on fame by being elected the Democratic Governor of rock-ribbed Republican New Hampshire. After his term of office, he became a member of New Hampshire's Public Service Commission. In 1932 another startling victory at the polls elevated him again to fame. By less than 2,000 votes out of some 200,000 cast, he beat critical, caustic George Higgins Moses, who had sat for 15 years in the U. S. Senate. Eager to discover this Moses-beater, newshawks rushed to Concord.

"This country's Government has been saddled with too many officeholders who want to be grandstand heroes, not members of a team," the onetime baseballer told them. "Too many politicians feel they've got to be great men, not public servants. ... A feller don't get great just by getting his name in the headlines. He'd better be giving his time and attention to the business he's sent to Washington to do for his constituents."

So said the Senator-elect. It was one of his last public utterances. Four months later he took his seat at a desk in the back row in the Senate and for two years thereafter placidly chewed tobacco. Senator Brown was ignored, if not forgotten, by the forensic champions of the Senate and, what was worse, by Postmaster General Farley in dispensing patronage. But Fred Brown did not grow restive. When the roll was called, between the names of Borah and Bulkley the voice of Brown could always be counted on to cast a vote for the Administration.

Last week when he spoke, Senators who paused out of curiosity stayed out of attentive interest. His speech was not long but at last he had a subject with which he was familiar--the utilities operating in New Hampshire. He did not flower into oratory. He stuck to facts he knew.

"New Hampshire is not a large State. It has an area of something less than 10,000 square miles ... a population of approximately 465,000. . . . Our people are intelligent, industrious and law-abiding. ... In our State there was not the slightest justification for the utilities mixing in politics or indulging in tactics which Professor Ripley in Main Street and Wall Street so aptly characterized as 'prestidigitation, double shuffling, honeyfugling, hornswoggling and skullduggery.' When I first read that description . . . I thought the learned professor was carried away by the flow of his exuberant words. ... I want to say to you, Mr. President, that if the stamp of some of the men with whom I have had to deal as representatives of the Associated Gas & Electric and Insull systems are to be permitted to continue to control large aggregations of other people's money . . . the kind of economic individualism and political democracy upon which this country was built cannot survive.

"In reply to those well-meaning gentlemen who believe that regulation" [as opposed to abolition] of holding companies is what we need, I invite attention to one H. C. Hopson, who stops sometimes at 61 Broadway, New York City. Mr. Hopson is the dominant figure and guiding spirit of the Associated Gas & Electric System. As a dominant figure he is a marvel and I think he admits it. As a guiding spirit he leaves nothing undone to accomplish his purpose and I may say that his chief purpose appears to be acquiring the coin of the realm. . . . The Associated Gas & Electric System includes 164 companies, 42 of which have securities in the hands of the public. ... In my opinion under the present setup, no body can effectively regulate such an organization. It is too big, too powwrful, its officials are too fast and its lawyers too smart. . . .

"I have seen them juggle their books, juggle their cash, juggle foreclosure sales where they were both buyer and seller, juggle their taxes, juggle their lawyers, their accountants and their engineers. . . . More than once have I seen the person in charge of an operating company claim and insist that he did not know where the company was located which was over him, did not know the name of his boss, and did not know where he lived. ... I do not think anyone can appreciate the hopeless task of trying to regulate anything of the size and power of the Associated Gas or Insull unless he has lived with the nightmare. . . ."

Then Senator Brown put into the record copies of complicated contracts between operating utilities and their affiliates by which the operating companies paid 2 1/2% of gross earnings for management, 7 1/2% of gross cost of constructing plant and equipment, 1 1/2% of the cost of all purchases, a 30% margin of profit on sales of electric appliances to their affiliates-- to illustrate ''how the profits of an operating utility can be siphoned out by a holding company." "It is," the Senator declared, "merely a scheme whereby the local utility does the same business it did originally, in the same way, with the same facilities, through the same office and working force, and the profits are diverted to another subsidiary for the benefit of the same ultimate owners."

He concluded: "Mr. President, I came to Congress with the hope that I might do what I could to put an end to holding company abuses, and I consider it my duty to cast my vote for the pending bill. . . ."

He sat down. His second speech in two years was completed. Majority Leader Robinson and two dozen other Senators made their way back to his desk, crowded around him, pumped his hand, almost upset his spittoon in their excited congratulations.

*The brand which he has chewed since he was 21. In Washington it was hard to get. He had the Senate Restaurant stock it for him. His consumption: two 20-c- plugs a day.

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