Integration of Utility Systems

March 8, 1940

Report Outline
Initiations of S.E.C. Utility Proceedings
Growth of Public Utility Holding Companies
Congress and Utility Holding Company Act
Holding Company Integration and the S. E. C.

Initiations of S.E.C. Utility Proceedings

A major New Deal reform moved a step nearer realization at the end of February, when the Securities and Exchange Commission instituted a series of proceedings designed ultimately to bring about corporate simplification and geographical integration of public-utility systems having aggregate assets of around $14,000,000,000. By ordering, February 28, the Electric Bond and Share Company and the Engineers Public Service Company—respectively the largest and the smallest of nine holding-company systems selected for initial attention under the integration program—to show cause why they should not be reorganized, the S. E. C. took the first major initiative toward carrying out the difficult mandate imposed on it by Section 11 of the Public Utility Holding Company Act of 1935.

By the terms of that section—the so-called death-sentence provision—the Commission was directed, “as soon as practicable after January 1, 1938,” to require each holding company registered under the act, and each subsidiary company thereof, to take such action as was found necessary to limit operations of the holding company, other than in certain specified cases, to “a single integrated public-utility system.” While some companies have voluntarily taken steps to comply with Section 11 or have become subject to reorganization through bankruptcy proceedings, the majority have waited for the S. E. C. to launch its own program for effecting the integration required by law.

Magnitude of Impending Task of Utility Integration

The recently issued show-cause orders directed the companies to reply at various dates during the month of April as to what action, if any, they believe should be taken to comply with the act. Public hearings in the different cases have been set tentatively to open late in April and early in May. Jerome N. Frank, chairman of the S. E. C, explained in an address in New York, January 25, 1940, that execution of the integration program would be “a slow, tedious process which will take years,” for there will have to be “long days of hearings and many days of” conferences” and “time for careful deliberation on the part of the Commission before any holding-company system can be properly directed as to how it should integrate.” After integration orders have been entered, moreover, the companies affected will be allowed a year or, if necessary, two years in which to comply, and further delays may ensue if they exercise the right of appealing such orders to the courts.

ISSUE TRACKER for Related Reports
New Deal, Great Depression, and Economic Recovery
Feb. 20, 2009  Public-Works Projects
Jul. 25, 1986  New Deal for the Family
Apr. 04, 1973  Future of Social Programs
Nov. 18, 1944  Postwar Public Works
Apr. 12, 1941  Public Works in the Post-Emergency Period
Mar. 08, 1940  Integration of Utility Systems
Feb. 26, 1938  The Permanent Problem of Relief
Jun. 08, 1937  Experiments in Price Control
Jan. 05, 1937  Credit Policy and Control of Recovery
Nov. 27, 1936  New Deal Aims and the Constitution
Oct. 16, 1936  Father Coughlin vs. the Federal Reserve System
Sep. 25, 1936  Roosevelt Policies in Practice
Feb. 11, 1936  Conditional Grants to the States
Dec. 11, 1935  Capital Goods Industries and Recovery
Sep. 25, 1935  Unemployment Relief Under Roosevelt
Jul. 17, 1935  The R.F.C. Under Hoover and Roosevelt
Jul. 03, 1935  Six Months of the Second New Deal Congress
Jun. 04, 1935  The Supreme Court and the New Deal
Mar. 05, 1935  Public Works and Work Relief
Feb. 16, 1935  Organized Labor and the New Deal
Dec. 04, 1934  Rural Electrification and Power Rates
Oct. 26, 1934  Federal Relief Programs and Policies
Jul. 25, 1934  Distribution of Federal Emergency Expenditures
Jul. 17, 1934  Debt, Credit, and Recovery
May 25, 1934  The New Deal in the Courts
Mar. 27, 1934  Construction and Economic Recovery
Mar. 19, 1934  Price Controls Under N.R.A.
Feb. 15, 1934  Federal Promotion of State Unemployment Insurance
Jan. 10, 1934  Government and Business After the Depression
Jan. 02, 1934  The Adjustment of Municipal Debts
Dec. 12, 1933  The Machine and the Recovery Program
Dec. 05, 1933  Winter Relief, 1933–1934
Nov. 11, 1933  Power Policies of the Roosevelt Administration
Oct. 28, 1933  Buying Power under the Recovery Program
Oct. 19, 1933  Land Settlement for the Unemployed
Sep. 20, 1933  The Capital Market and the Securities Act
Jul. 18, 1933  Public Works and National Recovery
Jul. 01, 1933  The Plan for National Industrial Control
May 03, 1933  Economic Readjustments Essential to Prosperity
Apr. 26, 1933  Government Subsidies to Private Industry
Mar. 25, 1933  Rehabilitation of the Unemployed
Feb. 17, 1933  Federal Cooperation in Unemployment Relief
Nov. 16, 1932  Systems of Unemployment Compensation
Nov. 09, 1932  Policies of the New Administration
Aug. 18, 1932  Emergency Relief Construction and Self-Liquidating Projects
Dec. 28, 1931  Relief of Unemployment
Aug. 01, 1931  National Economic Planning
Jul. 20, 1931  Dividends and Wages in Periods of Depression
Feb. 19, 1931  Insurance Against Unemployment
Jan. 19, 1931  Business Failures and Bankruptcy Administration
Jan. 01, 1931  Federal Subsidies to the States
Dec. 08, 1930  Federal Relief of Economic Distress
Sep. 25, 1930  The Extent of Unemployment
May 16, 1930  Politics and Depressions
Dec. 20, 1929  The Federal Public Works Program
Jun. 08, 1929  The Federal Reserve System and Stock Speculation
Apr. 14, 1928  The Federal Reserve System and Price Stabilization
Feb. 25, 1928  The Federal Reserve System and Brokers' Loans
Commercial Law
Regulation and Deregulation