Regulation of Holding Companies

September 20, 1932

Report Outline
Current Proposals for Federal Regulation of Holding Companies
Development of the Holding Company
The Holding Company in Banking
Regulation Railroad Holding Companies
Public-Utility Holding Companies

Current Proposals for Federal Regulation of Holding Companies

Positions of Candidates on Holding Company Regulation

When Congress reconvenes in December, it will face, more seriously than it has yet faced, the issue of federal regulation of holding companies.

In the railroad field, an investigation completed by the House Committee on Interstate and Foreign Commerce as long ago as February, 1931, substantiated charges previously made by the Interstate Commerce Commission that holding companies were being used to defy and forestall execution of the policy enacted by Congress in 1920 to control the consolidation of railroads. Governor Roosevelt in his address on railroads at Salt Lake City, September 17, 1932, advocated regulation of holding companies by the Interstate Commerce Commission. “We cannot let our fundamental policies be blocked by screens of corporate complexities.” Earlier in this address he had said:

We have had an epidemic of railroad holding companies whose financial operations were, to say the least, not generally beneficial to the orderly development of transportation. They were financial comets, free to rove through the system, spending other people's money in financial gambles and in acquiring side enterprises outside of the direct sphere of railroading. A great deal of money has been lost, and a good deal of damage done, by these companies.

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Regulation and Deregulation