violation of the antitrust laws and the extent to which such consolidations were susceptible to regulations under the present laws. Information was also asked concerning the control of commodities by chain stores; the existence, if any, of unfair competitive methods, agreements, conspiracies, or combinations in restraint of trade; and other features of chain-store merchandising. The investigation is being conducted by the economic division. Complete reports may be seen in the following pages of the chief counsel's division, the chief examiner's division, economic division, trade-practice conference division, trial examiner's division, exporttrade section, court cases, administrative division, and the publicutilities investigation. ANNUAL REPORT OF THE FEDERAL TRADE COMMISSION PUBLIC UTILITIES INVESTIGATION Senate Resolution 83, adopted February 15, directed the commission to investigate the financial structure of public utilities doing an interstate, and in some cases an international, business, as well as their methods of obtaining publicity. Evidence put into the record up to the close of the fiscal year deals with that part of the Senate resolution relating to publicity methods. This phase of the investigation is not yet completed. A complete stenographic transcript of testimony taken to date is now in the hands of the Senate and monthly reports of progress have been made to the Senate since the investigation began in March. The inquiry into the financial phase was promptly started and accountants and examiners began the examination of the records and books of account of certain important holding and service companies in Boston, New York, Philadelphia, and Chicago, and a preliminary questionnaire was sent to operating gas and electric companies. By the end of June more than 5,000 replies had been received. This questionnaire called for information concerning production, purchases, sales, interstate business, intercompany relationships, earnings, investment, plant capacity, etc., which will give bases for measuring the importance of interstate and power-group business in the electric-power and gas industries. On June 20 the commission sent its comprehensive report form entitled "General Report of Electric and Gas Utilities, Holding and Service Companies for Such Utilities and Affiliated Companies" to the Government Printing Office. The data called for in this report form include the facts in so far as they can be secured through schedule upon the following: (1) The growth of capital assets and capital liabilities of holding companies and management groups, including their public-utility and nonpublic-utility subsidiaries, and of independent operating companies doing an interstate business; (2) the methods of issuing, the price realized, and the commissions, bonuses, and fees received or paid by such companies with respect to the various issues of securities made by them; (3) the intercompany relationships among holding companies, managing or serv ice companies, and financial, engineering, construction and electric, and gas operating companies; (4) the services furnished to electric and gas public-utility companies by holding, management, and service companies, the expenses and earnings of such companies, together with the fees, commissions, or bonuses charged by them or their subsidiary or affiliated companies; and (5) political campaign contributions and the expenditure of funds to be used to influence or control public opinion with respect to municipal or public ownership of electric-power enterprises. The financial matters referred to under this resolution comprise, in brief, the following general subjects: (1) The growth of the capital assets and capital liabilities of public utility corporations doing an interstate or international business supplying either electrical energy in the form of power or light or both, however produced, or gas, natural or artificial, of corporations holding the stocks of two or more public utility corporations operating in different States, and of nonpublic utility corporations owned or controlled by such holding companies; (2) the method of issuing, the price realized, or value received, the commissions or bonuses paid or received, and other pertinent facts with respect to the various security issues of all classes of corporations herein named, including the bonds and other evidences of indebtedness thereof, as well as the stocks of the same; (3) the extent to which such holding companies or their stockholders control or are financially interested in financial, engineering, construction, and/or management corporations, and the relation, one to the other, of the classes of corporations last named, the holding companies, and the public utility corporations; (4) the services furnished to such public utility corporations by such holding companies and/or their associated, affiliated, and/or subsidiary companies, the fees, commissions, bonuses, or other charges made therefor, and the earnings and expenses of such holding companies and their associated, affiliated, and/or subsidiary companies; and (5) the value or detriment to the public of such holding companies owning the stock or otherwise controlling such public utility corporations immediately or remotely, with the extent of such ownership or control, and particularly what legislation, if any, should be enacted by Congress to correct any abuse that may exist in the organization or operation of such holding companies. Congress made available to the commission for the fiscal year 1928-29 a special appropriation of $85,000 to be used in prosecution of the investigation of public utilities. It was necessary to employ a number of accountants and clerical workers to carry on the investigation. A large item of expense was traveling allowances for witnesses. Senate Resolution 83 is as follows: Resolved, That the Federal Trade Commission is hereby directed to inquire into and report to the Senate, by filing with the Secretary thereof, within each thirty days after the passage of this resolution and finally on the completion of the investigation (any such inquiry before the commission to be open to the public and due notice of the time and place of all hearings to be given by the commission, and the stenographic report of the evidence taken by the commission to accompany the partial and final reports) upon (1) the growth of the capital assets and capital liabilities of public-utility corporations doing an interstate or international business, supplying either electrical energy in the form of power or light, or both, however produced, or gas, natural or artificial, of corporations holding the stock of two or more public-utility corporations operating in different States, and of nonpublic utility corporations owned or controlled by such holding companies; (2) the method of issuing, the price realized or value received, the commissions or bonuses paid or received, and other pertinent facts with respect to the various security issues of all classes of corporations herein named, including the bonds and other evidences of indebtedness thereof, as well as the stocks of the same; (3) the extent to which such holding companies or their stockholders control or are financially interested in financial engineering, construction, and/or management corporations, and the relation, one to the other, of the classes of corporations last named, the holding companies, and the public-utility corporations; (4) the services furnished to such public-utility corporations by such holding companies and/or their associated, affiliated, and/or subsidiary companies. the fees, commissions, bonuses, or other charges made therefor, and the earnings and expenses of such holding companies and their associated, affiliated, and/or subsidiary companies; and (5) the value or detriment to the public of such holding companies owning the stock or otherwise controlling such public-utility corporations immediately or remotely, with the extent of such ownership or control, and particularly what legislation, if any, should be enacted by Congress to correct any abuses that may exist in the organization or operation of such holding companies. The commission is further empowered to inquire and report whether, and to what extent, such corporations or any of the officers thereof, or anyone in their behalf or in behalf of any organization of which any such corporation may be a member, through the expenditure of money or through the control of the avenues of publicity, have made any and what effort to influence or control public opinion on account of municipal or public ownership of the means by which power is developed and electrical energy is generated and distributed, or since 1923 to influence or control elections: Provided, That the elections herein referred to shall be limited to the elections of President, Vice President, and Members of the United States Senate. The commission is hereby further directed to report particularly whether any of the practices heretofore in this resolution stated tend to create a monopoly or constitute violation of the Federal antitrust laws. The resolution of the commission accepting the tasks assigned to it under Senate Resolution 83, is as follows: Whereas the Senate of the United States has by a resolution agreed to on February 15, 1928 (S. R. 83, 70th Cong., 1st sess.), directed the Federal Trade Commission to make an inquiry into certain practices and conditions relating to specified classes of public utility corporations and corporations connected therewith: Now, therefore, be it |