Show HITS f METHODS OF PHONE FIRM ding Company Practices I Severely Criticized by byI I I I. I C. C C. C Member J CONTROL URGED T. T T. T T. T Termed More Powerful Powerful Pow Pow- i r erful Than States I By Associated Press ASHINGTON April 6 What 6 What were ere termed abuses in the operation holding companies together with ment of large sal salaries to officials f the American Telephone and Tele Tele- raph company were reported today B the house interstate commerce o ommittee by Dr W. W M. M W. W Splawn lowing allowing a three year three year study ordered y toy to congress Splawn now a member of the In in- in commerce commission rec- rec enactment of the Rayburn ill In creating a federal ons commission Hearings on n the ill will open Tuesday Splawn vas Was by the committee to make le Sc inquiry The holding company compan the report I lid dd Id has been found as a n result of 1 its lis 8 investigation in to be as prolific of buses in the field of of- communications i 3 in other utilities already already- studied t Holds Results Typical What is disclosed by the examina- examina n fhe he Associated Telephone Util Util- company Te company is in my judgment but f Apical i al of ot what may mal occur ur under ex ex- ting laws Moreover Moreover the American Tele- Tele hone arid and T Telegraph company compan which i both a holding and an operating Is more powerful and skill skill- A ii than any state government with it has hasto to dealiA deaLA deal A iA bill regulating communications i 1 interstate commerce will fall far farl ort lort of ot being eff effective unless it first the use of the holding corn com any to what is absolutely essential ad nd necessary and second unless ic ie regulation is extended to the company in like manner as 3 the operating company company Calls for tor Investigation Dr Splawn recommended that the step in regulation be a thorough h gation Into the Bell Telephone He estimated this would a year and cost between 00 and I The first assignment he said should e into the companies companies' accounts rec rec- meth methods ds of handling ion contracts and to what extent companies contrib contrib- te to campaign expenses or other other- rise ise participate in political ics ies fuIt It must be borne in mind that the ther r t. t Continued on Page Pue Twenty REPORT SCORES PHONE COMP ANY Holding Company Practices and High Salaries of Officers Rapped Raped Continued from rue race One American Telephone and Telegraph company s system stem has assets estimated at and that the gross OSS telephone revenue of oC the sst system m In Inthe Inthe inthe the year ear 1932 was 5 the there re report rt said Assets Are Enormous This one system in the field of oC communication com corn has assets to about one one- fifth of all the railroads s the average average aver aver- age per capita contribution to its telephone service in 1932 was the report added The American people are arc entitled to know it if they are being overcharged for lor this service though they ma may be bc satisfied with the of or the serlee service ser ser- vice lee Dr Splawn said This report shows a vcr very liberal scale ale of salaries fo for or the officials of th the A A. A T. T k T. T The generosity with wilh wHich the management rewards itself it it- self elt the importance of the industry an and anH i the magnitude o of ot its operations call for actual and not nominal regulatIon regu lation n. n W W. S. S Gifford president of oC A. A T. T T. T was T.-was 35 reported to have received a salary nl ry in iii 1933 and for or other compensations including directors tors tor's fees 0 n Other Salaries Listed Vice President C. C P. P Cooper received re and C. C M. M Brace Brace- ten ien and B. B Gherardi and A. A W. W Page ami 1470 F. F B. B Jewett E. E F. F Carter ter Assistant Vice President President dent K W. W Waterson Comptroller Comptroller Comp Compo C. C A. A Heiss Vice President Pres ident E. E S. S Wilson Attorney G G. G. G E E. Folk Assistant Chief Engineer H. H P. P Charlesworth the other officers were listed as LS salaries below and above e 1932 Indebtedness Given At At December 31 1932 the thc A. A T. T 1 JT a company's outstanding indebtedness indebted indebted- ness BeSS consisted of or in fri collateral col col- Jat lateral ral trust bonds and in debentures the report said Puling During 1923 1925 and 1930 the A. A T. A T. T T. T issued in debe de- de be of or which were told sold to J. J P. P Morgan Co and associates asso c cites es and to J. J P. P Morgan Morgan Mor Mar gan Co as underwriters On th these e transactions the discount amo amounted to One of these issues namely a 35 oar 5 S per cent gold debenture due February 1 1065 was sold to J. J P. P Morgan Co at per cent of According to the Commercial Com Corn mercial and Financial Chronicle o of ot February 1930 these bonds were of of- feY d' d b by J J. J P. P Morgan Cb Co 0 and as as- is lo at and the issue was waso o oversubscribed ov by over there having baring been rece received ed ti tiis aggregating ling Year Six IV Utility Near Close WASHINGTON April G 6 The JP year fix investigation of ot the federal trade commission into the activities of public utility companies is drawing draw draw- ing to a close with recommendations introspect for lor new legislation It was said of officially today that the commission had d discovered of more more than a billion dollars in the capital stock of or companies This figure officials said will wilt be beB beS B S principal part of the report to con con- g S which the commission hopes to tomake tomake make toward the end of ot the summer No report however will be ready for tor congress s in time for legislation this tIis session Further inquiry will be made into public utility publicity activities at next week Principal disclosures of the so far include Discovery of or the extent to which capital stock has been written up for the apparent purpose of increasing increasing ing valuations on which rates arc are based and for or use in making share exchanges with affiliated companies Propaganda has not been a subject of pi study for some time but previous disclosures showed that utility companies com panics had employed college pro es ors LorE lecturers lawyers lawers and writers together with advertising in newspapers news flews papers and partial ownership ol oi newspapers in some cases Stock market manipulation Ing the use of ot hundreds of millions oi ol company funds large salaries special management fees and concentration control of utilities in the hands ol oj r r lively few companies |