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Evening star. [volume] (Washington, D.C.) 1854-1972, August 09, 1935, Image 12

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nr inquiry
Tells Radio Audience “You
Will Pay Bill” in Increased
Utility Rates.
The war against utility lobbying
reached the air last night as Senator
Black. Democrat, of Alabama, chair
man Of the Senate committee investi
gating lobbying activities, gave an
account of the inquiry to this point
during an address over the National
Radio Forum, arranged by The Eve
ning Star and broadcast over a Na
tion-wide hook-up of the National
Broadcasting Co.
In his introductory remarks Sena
tor Black differentiated between the
rights of all citizens to make known
their wishes to their congressional
representatives and the lack of right
"on the part of any greedy or preda
tory Interest” to lobby.
Public Will Pay Bill.
Predicting the lobby against the
utility holding company bill, which
has occupied the full attention of the
committee, will be known as the
"$5,000,000 lobby,” Black assured his
listeners that "you will pay the bill”
In increases in the rates for gas and
electricity.
"Contrary to tradition, against the
public morals and hostile to good gov
ernment, the lobby has reached such
a position of power,” the Senator con
cluded, “that it threatens government
itself. Its size, its power, its capacity
for evil, its greed, its trickery, decep
tion and fraud condemn it to the
death it deserves. You. the people of
the United States, will not permit it
to destroy you. You will destroy it”
One of the high lights of the Sen
ator's spech was his reading of a tele
gram which he said was sent to an
undisclosed person by H. C. Hopson,
who is being sought by congressional
investigators as the dominant figure
in the Associated Gas & Electric Sys
tem.
The telegram follows:
July 1. 1935.
"Have just talked with vice presi
dent of Standard Gas & Electric Co
and he advises that they are in the
fight to a finish. They are much en
couraged and believe there is a possi
bility we may prevent any opportunity
to affix the threatened veto. We have
more opportunity now to defeat the
whole measure than many believed
were the chances of our defeating
merely the death sentence when it wa<
first announced to be an essential
part of the must program.
H. C. HOPSON.
l r .\i vi .luui csa.
The text of Senator Black's address
follows:
It is not only the right, but it is
the duty of every patriotic citizen
who loves his country, to give his hon
est and unselfish judgment on public
questions to his representatives. Leg
islators welcome and need such sin
cere and honestly informed opinions
Such opinions are of real value and
genuine aid in bringing about fail
and wholesome laws. The constitu
tional right of petition preserves, anc
always will preserve, this privilege
There is no constitutional right tt
lobby. There is no right on the pan
of any greedy or predatory interest tt
use money taken from the pockets o:
the citizen to mislead him and thu;
enlist his aid in enabling the same
greedy and predatory interest to take
still more money out of the pocket o:
the same unsuspecting citizen. Then
is no constitutional right on the pari
of any sordid and powerful group tc
present its views behind a mask con
cealing the identity of the group
These money-maddened men behinc
the mask have no right to send theii
hired men out into the streets, intd
the places of business, into the home!
and into the churches, to perusade 01
to frighten citizens into giving blankei
authority to have their names signed
to telegrams and letters, to be latei
manufactured by high-powered, high
priced publicity agents, and sent al
company expense to the citizens
representatives in Washington. “ ir
such way and manner as to deliber
ately deceive those representatives
There is no constitutional right foi
the same group to seek out the inti
mate social friends of Senators and
Representatives, their close politica;
associates and campaign managers
and hire them from the four comer!
of the United States, to make intimate
personal appeals and to frighten then
as to the political consequences should
they vote contrary to the wishes and
the financial aggrandizement of the
men behind the mask.
Other Activities to Be Probed.
While the Special Senate Lobby
Investigating Committee, consisting
of myself, and Senators Minton
Schwellenbach, Frazier and Gibson,
will go into other lobby activities, the
committee during the last three weeks
has gathered evidence in connection
with the Wheeler-Rayburn holding
company bill. I shall discuss some ol
that evidence with you tonight.
On July 12th, Mr. Philip Gadsden,
representing a large group of utility
holding companies throughout the
Nation, testified before the committee,
His group had spacious offices in the
Mayflower Hotel in Washington foi
many months. It was headquarters
for this group, and to these head
quarters, there flocked power company
agents from over the Nation. The
expenses reported by this committee
were a little more than $300,000 oi
which $150,000 went to two firms ol
the hundreds of lawyers whose services
were used by companies in connectior
With this bill. This $300,000 was bul
a small part of the money expended
against this bill. Most of the expenses
have come from the individual com
panies themselves, and have beer
charged up to operating expenses ol
the various local power company
units. You who listen to me can resl
assured that a part of the expense!
of the campaign against this bill hat
most likely been charged to operating
expenses of the company supplying
the electricity for the light in you
room at this very moment. In othe:
words, you will pay the bill.
Spending $800,000 Admitted.
One holding company system, serv
ing electricity to the people In 2<
States, has admitted spending $800,001
up to date. Some of you, of course
will pay for that. All the companies
Income is derived from you who buy
its product. Evidence now availabli
. to the committee, which evidence 1
wholly inadequate to give a completi
picture of expenses, shows expenditure
to defeat the bill of approximately
$1,500,000. If we succeed in getting
anything like the true facts of al
expenses, I predict that the powei
lobby inJthis matter will be known m
the "Five-vMlllion Dollar Lobby."
How has the money been spent'
X will discuss some of the methods.
A flood of telegrams and a delugi
of letters poured into the City ol
Washington sinoa February of thU
I Tells of “$5,000,000 Lobby”
Chairman Black of the Senate Lobby Committee as he told Radio
Forum listeners last night that consumers would have to bear the cost of
a ••$5,000,000 lobby” against the utilities bill. —Star Staff Photo.
I
I year against the Wheeler-Rayburn
! bill. Immediately before the vote in
each house they poured in relays, 50,
100, 200, 500, even 1,000 in a relay
j group. This movement was so
planned, so timed and so arranged as
| id leave the impression on many that
a perfect storm of public sentiment
J and indignation had spontaneously
' burst forth in vexed resentment
against the Wheeler-Rayburn bill. If
these letters and telegrams had not
come in such flocks, drove? and
clouds, that it was impossible even to
I open them, Washington might have
been left under the melancholy im
pression that a pestilence had spread
abroad leaving millions of widows and
orphans, all of whom were large stock
holders in power holding companies.
! The fact that millions of our people
were apparently honestly, genuinely
and spontaneously so aroused, that
they would spend hundreds of
thousands of dollars to send such
messages about a bill, naturally and
rightfully gave concern to their repre
sentatives.
Following these protests came long
distance telephone calls from friends
back home, and finally there dropped
into Washington the party chairman
back home, a legislator's campaign
manager or close personal friend— •
alweys the closest that could be found
—willing to eonje to Washington.
If these protest telegrams, letters.
long-distance telephone calls and per
sonal visits to Washington had been
the result of carefully formed opinions,
after a study of the bill, and had
resulted from personal convictions
strong enough to Justify the citizen
making the necessary effort to make a
trip to Washington at his own ex
pense; to write and send a telegram
at his own expense; or even to write
a letter at his own expense; such
activities would have been worthy of
that serious and important considera
tion given them by many Senators and
Congressmen.
These letters and telegrams did not
appear on their face to have been
written, prepared, or paid for by any
one but the persons whose names were
signed. While they did not affirma
tively assert in words that the per
sons whose names were signed, actu
ally wrote and paid for them, cer
tainly it was intended to leave that
impression upon the Washington
Senators and Congressmen and the
President of the United States. If,
therefore, some on else actually wrote
the telegrams and letters of protest
and some one else actually paid for
them, this was just as much a cam
paign of deceit and fraud as though
the messages had actually carried the
•false statement that the message had
been written, signed, and paid for by
the person whose name was signed
to it.
Now, what were the actual facts?
Evidence before the Lobby Commit
tee shows that one holding company
system expended more than $134,000
for telegrams and telephone mes
sages. At an average of 60 cents
per message, this would mean more
than 235,000 messages were sent by
this one company on this one bill.
In the main, these telegraphic mes
sages were sent to Senators and
Congressmen to try to persuade
them or coerce them to vote against
the Wheeler-Raybum bill. Not only
did this one company pay out this
money for such telegrams, but various
other companies did the same thing.
Reports from 11 telegraph offices
throughout the country made to the
Senate Committee show that 14,782
telegrams were sent to Senators and
Congressmen against the bin, and
m,779 of the messages were paid for
by public utilities, while only three
people had sufficient interest to pay
for any such message. Probably more
than 250,000 telegrams in all were sent
in this way and paid for by the
utilities. Sometimes the person pre
senting telegrams supposed to be
signed by various citizens was a com
plete stranger in the community. For
instance, the committee today re
ceived a sworn answer to questionnaire
from the telegraph agent at Spartan
burg. S. C . 212 telegrams against the
holding company bill were sent to Sen
ators and Representatives at a cost
of $127.29. The agent testifies as fol
lows: '
“To the best of my knowledge and
belief, none of the 76 telegrams were
filed by the signers, but were filed by
one party in connection with another.
We do not know his business connec
tions. He was a transient and pre
viously unknown in this office.”
With reference to the remaining 136
telegrams, this agent testiQes:
“They were filed and paid for by the
same party that paid for the tele
grams sent on June 27. As previously
stated, we do not know the name of
the party filing and paying for them."
Not one telegram from Spartan
burg was sent against this bill through
this telegraph company except those
presented and paid for by a “tran
sient!” This is public expression! Bear
in mind, too, that while these expenses
were always charged to your local
company that sells you electricity, the
plans were conceived, drawn and or
dered by the manipulations of a hold
ing company perhaps a thousand miles
away.
5,000,000 Letters Sent.
Not only were more than 250,000
telegrams sent under this plan of the
holding company, and paid for out of
I the local companies' funds paid in by
j your local citizens, but perhaps 5,000,
, 000 letters were sent under the same
' plan.
Witnesses under oath have already
i disclosed some of the methods used to
send these telegrams. Some people
wpre hired to get signatures and paid
for each message obtained. Others
were hired by the day or week. Em
ployes of the local companies were sent
out for some of the messages. Com
pany managers of stores and places
nf business obtained general authority
from their clerks. Janitors and other
employes.
The telegraJTh and letter factory
usually worked in the office of the
local power company. Regular or
special stenographers turned them out
of their typewriters by the thousands,
and later a signature was added either
by some person who had never seen
It before, or by the agent of the com
pany, who claimed, and In most In
stances had, general authority to sign
the name.
Tracks Well Covered Up.
No one single message contained
any information to the Congressman
or Senator that the message was con
ceived by a holding company bene
ficiary, actually written by a subordi
nate of this beneficiary, and actually
paid for by a local power company.
Sie tracks were even covered up so
at It was only after this committee
had its hearings that the plan was
revealed. Lately, publicity has been
given by some companies to these
payment* by them, but In each in
! stance, Including one In my own State
of Alabama, it was after our com
mittee had asked the company for this
particular information.
These letter and telegram factories
were supplied with prepared forms
from the highly, paid publicity men of
the holding companies. Evidence in
possession of the committee shows
that holding company publicity men
have been drawing as much as $100
per day, which, of course, goes back
to the local company and into your
electric light bill.
It is impossible for me to give you
many of the forms, but let me read
you a few form telegrams. Remember,
also that these were sent from every
section of the Nation to Senators and
Congressmen. Here they are:
“Please oppose Rayburn-Wheeler
legislation: which is vicious and un
American.”
“Show the boys who is boss, de
{ feat Rayburn-Wheeler bill.”
“Vote against Rayburn - Wheeler
bill to protect my Interests. Will watch
j result of ballot.”
“I shall expect you to use your
prerogative against the Wheeler-Ray
j burn bill. As you vote now, so shall
| I vote for you at the next election.’
“Defeat the Rayburn-Wheeler bill
; and you will get my support at the
next election.”
These very holding companies have
advertised far and wide their tender
and loyal solicitude for the Constitu
tion and the Supreme Court. Let this
court now characterize their conduct.
I read from the case of Marshall vs.
Baltimore & Ohio Railroad Co., as
follows:
“Any attempts to deceive persons In
connection with the high functions of
legislation, by secret compensations, or
to create or bring into operation un
due influence of any kind, have all
the injurious effects of a fraud upon
the public * • •
“Legislators should act with a single
eye to the true interests of the whole
people and courts of justce can
give no countenance to the use of
means which may subject them to be
* misled by the pertinacious importun
ity and indirect influence of inter
; ested and unscrupulous agents or so
licitors * • *. Secrecy, as to the
character under which the agent or
solicitor acts, tends to deception and
, is immoral and fraudulent"
These words of the Supreme Court
! of the United States denounced a
: $50,000 lobby. Can we doubt what
« '
that court would say today of the
high powered, deceptive, telegram fix
ing, letter framing, Washington vis
iting, *5,000,000 lobby?
Holding Firm Held Wires.
Let us now examine another phase
of this mighty lobby mechanism, and
see Just how the hidden holding com
pany heads reached into the far away
cities, towns and villages of this
country tributary to their parasitical
system, and pulled the wires manipu
lating their paid and underpaid pup
pets.
Listen to the words of Mr. Gadsden,
spoken under oath, as chairman of
the Committee of Holding Company
Public Utility Executives. Here is the
evidence:
The chairman—As the chairman
of this board you insisted, did you not,
that they bring everybody they could
bring here who was close to a Con
gressman or Senator, from their
State?
Mr. Gadsden—I certainly did.
The chairman—And you insisted
Mr. Gadsden (interrupting)—I do
not say I insisted, but I was in favor
of it.
The chairman—And you did not
bring these people here because they
knew more about the bill than you
did, did you?
Mr. Gadsden—No, they could not
know more about it than I did.
The chairman—You brought them'
here and insisted that they be brought
here because you thought they would
personally have an influence in per
suading the Congressman or Senators
how to vote?
Sentiment Against Bill.
Mr. Gadsden—I thought they would
be able to impress the Congressman
that the sentiment back home was
against this bill and a great many of
'them did It, too.
The chairman—They did?
Mr. Gadsden—Yes. They were able
to come here and say to a Con
gressman, “John”—or “Jim”
The chairman—Who are those that
did it? We would like to have the
names. •
Mr. Gadsden—Will you allow me
to get the names? There are quite a
number of them.
The chairman—We would be glad
to have you supply the names.
The chairman—You consider that
it Is for the best interests of the
Nation with reference to legislation,
to try to find people back in the dis
tricts that may, by reason of personal
relationship, a personal friendship, be
able to influence Congressmen to vote
your way?
Mr. Gadsden—Isn't that a constitu
tional right?
The chairman—Is that your con
ception of it?
Mr. Gadsden—My conception Is
that a Congressman wants to know
, what the sentiment of his constituents
is, and if a prominent business man
can come here and say, “John” or
"Jim, you had better watch out. the
sentiment has changed in your dis
trict, and your constituents are op
posed to this bill,” he is very apt to
, listen to him.
Stormed Hotels Here.
This plan, outlined by Mr. Gadsden
was carried out "hook, line and
sinker.” Senators and Congressmen
[ received a visit from party officials
back home, from lirelong friends, and
even from their campaign managers.
If possible, It seemed that their man
agers were even more solicitous than
of old for their political welfare. These
visitors stormed Washington. Hotels
buzzed as though another national
convention were in town. Business
boomed in the Capital City. From the
number of lawyers in Washington and
elsewhere, supposed to be writing con
stitutional opinions, some have sug
gested that there were enough of these
lawyers to uphold the Constitution on
their dfcn shoulders, even if it had
been weightier than the pyramids. The
masters of the holding companies were
here too, but they waited in their
hotel rooms for reports from those
whom their orders had brought to
Washington to visit “Jim and John.”
The plan wa^ at work, but the masters
back in their hotel rooms did not pay
for anything,—even the hotel rooms.
They did not pay the expenses of
your friends who came to Washington
to visit your Representatives. The
books of your local company will show
these expenses as a part of the cost
of delivering electricity to you. The
money must come from you, and oth
ers like you, as the price of turning
your electric switch and lighting your
room, operating this radio, washing
your clothes and cooking your food.
Perhaps you should not complain,
however, but Just contemplate what a
good time people are having on your
money, In Washington, and elsewhere.
Let us now return for a few min
utes to the Supreme Court of the
United States. As we ponder its words
of wisdom, let us remember that this
same power group that put over this
lobby plan, has constantly advertised
its fervent loyalty and undeviating
devotion to that great court.
1874 Lobbying Case.
In 1874 the Supreme Court of the
United States in the case of Trist vs.
Child. 88 U. S.. 441, spoke again on the
question of lobbying. In a case before
the court a suit was brought on a
contract for lobby services. The con
tract provided that a man earned
Child should endeavor to secure the
passage of a bill. Child's method was
outlined in a headnote to the opinion
which is as follows:
“A contract to take charge of a
claim before Congress and prosecute
it as an agent and attorney for the
claimant (the same amounting to a
contract to procure by ‘lobby services’
—that is to say. by personal solicita
tion in any way with members of Con
gress—the passage of a bill providing
for the payment of a claim), is void."
His letter explained the procedure
as follows:
“Please write to your friends to
write to any member of Congress.
Every vote tells, and a simple request
may secure a vote, he not caring
anything about it. Set every man you
know at work, even if he knows a
page, for a page often gets a vote.”
The Supreme Court, in declaring
itself on this lobby practice, said, in
part, as follows:
“In our jurisprudence a contract
may be illegal and fraudulent because
it is contrary to a constitution or
statute or inconsistent with sound
policy and good morals. • * • The
question now before us has been de
cided in four American cases. They
were all ably considered, and in all
of them the contract was held to be
against public policy and void.”
Activities Distinguished.
The court then distinguishes be
tween purely professional services such
as drafting petitions, taking testimony,
etc., and personal solicitation with
reference to such activities, and fur
ther said:
"They rest on the same principle*
ethically as professional services ren
dered In a court of justice and are no
more exceptional. But such services
are separated by a broad line of de
marcation from personal solicitation
and other means and appliances which
his correspondence shows were resort
ed to in this case. * • •
"The foundation of a republic is the
virtue of Its citizens. They are at
once sovereigns and subjects. As the
foundation is undermined, the struc
ture is weakened. When it is de
stroyed, the fabric must fall. Such
is the voice of universal history. • • •
There is a correlative duty resting
upon the citizen.. In his intercourse
with those in authority • * • he is
bound to exhibit truth, frankness and
integrity. • * • If any of the great cor
! porations of the country were to hire
adventurers who make market of
i themselves in this way, to procure the
passage of a general law with a view
to the promotion of their private in
terests. the moral sense of every right
minded man would instinctively de
j nounce the employer and the em
ployed as steeped in corruption and
the employment as infamous.
Consequences Evident.
“It the instances were numerous,
open and tolerated, they would be re
garded as measuring the decay cf
public morals and the degeneracy of
; the time. No prophetic spirit would
j be needed to foretell the consequences
near at hand.
"We are aware of no case in Eng
lish or American jurisprudence like
the one here under consideration
where the agreement has not been
judged to be illegal and void.”
Consistently with the principles an
nounced by our Supreme Court, An
drew Jackson, as President, denounced
the national bank lobby. So also
Woodrow Wilson, as President, de
nounced the tariff lobby. True to
these traditions, of honesty and good
government. Franklin D. Roosevelt, as
; President, has denounced the insidi
ous and indefensible power lobby.
Contrary to tradition, against the
i public morals, and hostile to good
government, the lobby has reached
such a position of power that it
threatens government Itself. Its size,
its power, its capacity for evil; its
I greed, trickery, deception and fraud
! condemn it to the death it deserves.
| You, the people of the United States,
will not permit it to destroy you.
You will destroy it.
CODY SALE CROWDED
LOS ANGELES, August 9 <JP).—A
gold filling from a tooth of the late
Mabel Normand was among the tokeas
of her husband, the late Lew Cody,
which were placed on the auction
block yesterday.
A large crowd gathered for the sale
of some of the jewelry, including two
diamond-encircled wedding rings.
The valuables were found in a
safety deposit box.
Today’s constant starting, shifting and
accelerating waste your money if your
gasoline hasn’t these 3 Kinds of Power
SURVEYS show that driving
“around town” uses 20% to
40% more gasoline than driving
the same number of miles on long
runs.
This is easy to understand when
you consider that each “cold”
start can use up a whole “mile” of
gasoline... and that rapid accel
erating can use up 33% more gas
oline than steady running!
To cut down the waste of today’s
stop-and-go driving, you need a
gasoline with three different
kinds of power... power for quick
starting • • . power for hard
PULLING ... and power for eco
nomical RUNNING!
And you need a gasoline that
doesn’t “skimp” on any of these
kinds of power. In other words,
you need one that is perfectly
balanced! .
Super-Shell Is the FIRST truly
balanced gasoline. And so It saves
you money in 3 ways:
STARTING—Super-Shell
can save up to a cupful of
gasoline on every “cold”
start. Even on sizzling sum
mer days, your engine is relatively “cold”
when not running, because normal tem
perature under the hood is over 150°.
PULLING—Super-Shell can save up to a
cupful of gasoline in 10 minutes of rapid
accelerating, or hill climbing.
RUNNING—Super-Shell can save up to
a cupful, many motorists report, in an
hour on the long stretch—thus saving on
long runs as well as on short trips.
Remember, when you save 16 cupfuls,
you save a whole gallon.
To cut down the 20% waste In
your daily driving, start using
Super-Shell regularly! Fill your
tank today at one of the 30,000
neighborly Shell stations spread
from Coast to Coast.

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