its reasonableness may be inquired into, under the decisions of the Supreme Court. Mr. Chairman, it will only take me a few minutes longer if the committee wishes me to go ahead. Mr. LEA. Yes. Mr. DEVANE. Section 8 authorizes the Commission to prescribe systems of accounting for the companies subject to its jurisdiction. That is section 8 (a). Section 8 (b) authorizes the Commission to make examination of the books of the companies. And section 8 (c) authorizes the Commission to examine into the records and books of affiliates. Section 9 (a) authorizes the Commission to prescribe depreciation rates. And in that connection it may be desirable to insert a definition of depreciation which includes depletion. At any rate, it should be made clear that depreciation does include depletion. Mr. LEA. Would it be convenient for you to submit an amendment that you think will cover that? Mr. DEVANE. I will be glad to do that, Mr. Chairman. Mr. DEVANE. Yes. Section 9 (b) provides that the Commission, before prescribing rules or requirements as to accounts or depreciation rates, shall notify the State commissions having jurisdiction with respect to natural-gas companies. Section 10 (a) authorized the Commission to require annual and other periodical reports; and section 10 (b) is simply a penalty provision against any person who attempts to obstruct the Commission in its work. Section 11 has reference to State compacts. It directs the Commission to investigate and report to Congress with reference to any State compacts submitted to the Congress for approval. It seems to me that section 11 is one of the important sections of the bill looking toward conservation; and it should enable the Congress to act promptly upon the compacts submitted. I do hope that section 11 turns out to be a valuable section looking toward conservation. Mr. COLE. You are dealing with compacts which may be entered into in the future? Mr. DEVANE. Yes. Mr. COLE. We have a compact covering gas that has been ratified by Congress. Mr. DEVANE. A compact covering gas? Mr. COLE. Yes; in which eight States have entered into compact respecting gas; not only dealing with gas, but also with oil. Mr. DEVANE. Yes. Mr. COLE. But it covers both. Mr. DEVANE. Yes. Mr. COLE. So that this section should be changed, do you not think, to give to the Commission some power to observe how that compact is functioning? Mr. DEVANE. Yes; I think there should be that authority. Mr. DEVANE. I think there should be some provision in the bill giving a little more power of investigation of the industry as a whole, including the artificial-gas industry, such a provision would take care of that situation. Mr. COLE. I judge that this section was evidently drawn without knowledge on the part of the one who prepared it of the existence of this compact, and it might be amended so that the Federal Power Commission could observe how the compact, which was ratified in a resolution which was introduced last summer; that is, the oil and gas compact. Mr. DEVANE. I think it well to extend the power of the Commission to include investigations of the administration of these compacts. Mr. LEA. It seems to me the power to make recommendations for legislation should cover this existing compact; that seems to be entirely within the purpose. Mr. DEVANE. It could very easily be taken care of in section 11, Mr. Cole. Mr. COLE. The compact in question expires in 1937, and it will give this Commission an opportunity to furnish the Congress with some information as to whether a compact is worth while, at the time the next Congress meets, when we will undoubtedly have the same subject before us again as to a renewal of the compact and approval thereof. Mr. DEVANE. Then this act would enable the Commission to make a recommendation upon the renewal by the next Congress of that compact. Mr. COLE. It may be. Mr. DEVANE. I think it would. Mr. COLE. With this existing compact before us. Mr. DEVANE. I will be glad to look into that if I may be permitted to do so. Section 12: And I may add, before I discuss the remaining sections of this bill, that they are all procedural and all follow substantially, and in many instances verbatim, the language contained in other acts covering the same subject matter. Mr. COOPER. Section 12, you say? Mr. DEVANE. Section 12; and that is true of all the remaining sections. Mr. COOPER. All of them? Mr. DEVANE. Yes. Section 12 (a) makes it unlawful for any official of a gas company to deal in securities of the company. Section 12 (b) refers to control over interlocking directors. Section 13 provides for making complaint to the Commission. Section 14 (a) authorizes the Commission to investigate any matter pertinent to the administration of the act, looking toward its enforcement or to violations. Section 14 (b) gives to the Commission power to subpena witnesses and require the production of records. Section 14 (c) gives the Commission authority to resort to the courts for the purpose of compelling the attendance of witnesses or the production of records. Section 14 (d) and (e) and (f) all deal with depositions. Section 14 (g) provides that no person shall be excused from testifying or from the production of records on the ground that the testimony or production of records might tend to incriminate him. He is exempt from prosecution, except as to matters of perjury, but he cannot be excused from giving information. Section 15 (a), and the whole of section 15, relates to procedure as to hearings before the Commission. It simply authorizes the Commission to hold hearings, and these hearings shall be governed by such practices and procedure as is adopted by the Commission. Section 16 is simply administrative; it gives the Commission power to prescribe rules and regulations and to enter orders. Section 17 relates to the appointment of officers and employees to conduct the work. Section 18 authorizes appeals from the Commission to the courts. Section 18 (a) provides for rehearing. Section 18 (b) provides for court review of the Commission's orders. Section 18 (c) provides that the application for rehearing shall not act as a stay of Commission's orders. Section 19 (a) Mr. LEA (interposing). In respect to section 18, what are some of the comparable provisions in existing law with those provisions? Mr. DEVANE. Section 18 (a), (b), and (c) are comparable with the Federal Power Act, with the Communications Act, and with the Interstate Commerce Act, and I might say in that connection, Mr. Lea, that that is true of all the sections from section 13-you might also include 12-from 12 to the end of the bill. Mr. COOPER. That is the law at the present time? Now then, section 19 (a) simply authorizes an investigation to determine if the act is being violated. Mr. COLE. In respect to section 19 (a). Mr. COLE. In line 23 and 24, it authorizes the Commission to bring an action in the United States district court, the Supreme Court of the District of Columbia, or the United States courts of any Territory. Does that mean that the Commission initiating any litigation may choose any of those courts as it pleases? What I have in mind is under that language the Commission, if it wants to do so, could have all of the litigation heard in the District of Columbia. Under the language of another provision, where a question goes to court, it is provided that the court where the property is located shall have jurisdiction. Under section 19 (a) I wonder if it is the intention, in that language, to permit the Commission in enforcing any of the regulations or orders of the Commission that may be violated, to do so in the Supreme Court of the District of Columbia as to all cases? Mr. DEVANE. NO. Mr. COLE. If the Commission so desires. Mr. DEVANE. No, no. Cases against people should be brought in the jurisdiction where the people reside. Mr. COLE. This language is not as clear as it might be. We have had some bills here before where too much litigation was given solely to the court of the District of Columbia. Mr. DEVANE. Mr. Cole, you were very careful as to the language used in this section of the Federal Power Act. It is my understand 62815-36-4 ing that the language of this section is exactly the language in the companies section of the Power Act. If it is not, it should be made to conform to the same section in the Federal Power Act. Mr. LEA. I would be glad if you would submit an amendment which you think would cover that. Mr. DEVANE. I will be glad to do that, Mr. Chairman. Section 21 is the jurisdiction section, Mr. Cole, which gives the Federal courts jurisdiction in cases arising under this act, and it is probable that this section contains the limitation to which you referred. Section 22 is the separability of provisions. This bill, on the whole, is quite similar to the Federal Power Act, except that it confers less jurisdiction upon the Commission over the natural-gas industry than is conferred over the electrical industry. Mr. Lea. Mr. DeVane, concerning the limitation of jurisdiction, referred to by Mr. Cole, that is covered in the latter part of section 21. Mr. DEVANE. I am sure it is in here, Mr. Chairman. Mr. LEA. Yes. Mr. COLE. In lines 7 to 9, on page 28. Mr. DEVANE. Yes; that restricts it to the place where the defendant resides, or where found. Mr. COOPER. May I ask a question of Mr. DeVane? Mr. LEA. Yes. Mr. COOPER. Judge, this is the same thing we have in title III in the Utility Holding Co. bill? Mr. DEVANE. Yes. Mr. COOPER. And we had quite a lot of discussion on it? Mr. COOPER. This proposed bill differs somewhat from what we had in the holding-company bill, title III of the holding-company bill, does it not? Mr. DEVANE. It differs only to the extent that it does not confer quite as much jurisdiction on the Commission over the natural-gas industry as is conferred over the electric-light industry. There is no provision in this bill for coordination; there is no provision in it for bringing of property together for national defense. Mr. COOPER. Title III had that? Mr. DEVANE. I beg your pardon? Mr. COOPER. Title III had that provision? Mr. DEVANE. Yes. Mr. COOPER. That is eliminated here? Mr. DEVANE. Yes, and in a few other respects the provisions differ; it is not quite as broad as the Federal Power Act; otherwise it is substantially a statement of that act. Mr. LEA. We thank you, Mr. DeVane. Tomorrow morning we expect to have a representative of the Federal Trade Commission. I judge that they will consume the morning. If there is any person here who is interested in this legislation and will give his name to the clerk of the committee we will be glad to try to accommodate you, so far as our time will permit. The committee will adjourn until tomorrow morning at 10 o'clock. (Thereupon, at 12:05 p. m., an adjournment was taken until 101. m. of the following day, Friday, Apr. 3, 1936.) NATURAL GAS FRIDAY, APRIL 3, 1936 HOUSE OF REPRESENTATIVES, INTERSTATE AND FOREIGN COMMERCE, The subcommittee met, pursuant to call, in the committee rooms, at 10 a. m., Hon. Clarence F. Lea presiding. Mr. LEA. Colonel Chantland, we will be glad to hear you now. STATEMENT OF COL. WILLIAM T. CHANTLAND, ATTORNEY IN CHARGE OF LEGAL WORK, FEDERAL TRADE COMMISSION UTILITIES INVESTIGATION, WASHINGTON, D. C. Colonel CHANTLAND. Mr. Chairman and gentlemen of the committee: At the request of your chairman that the Federal Trade Commission be represented at these hearings on a proposed natural gas and natural-gas pipe line act, the Commission has designated me to appear. For a portion of 1934 and throughout 1935, to the final hearings held on March 16 of this year, the Commission's attention in the utilities investigation, made at the direction of the Senate and extended through 1935 under joint resolution, has been concentrated on natural gas and natural-gas pipe lines. The economic examiners' and accountants' reports, supplemented by quite extensive hearings of representative witnesses from the several branches of the industry, from State commissions and legislatures, and from cities that have thus far sought in vain to obtain natural gas, the Commission's record presents what we believe is a fair and quite comprehensive story of the development of the natural-gas industry in the United States, and its present status. This includes natural-gas production, assembly into pipe lines, and transportation by pipe lines to its ultimate distribution for use by the public. The Commission's final report to the Senate no natural gas and natural-gas pipe lines in 13 chapters is printed as part 84-A of its reports, copies which have been supplied the members of the committee. Chapter XII contains a summary of facts and a survey of the legal situation. Chapter XIII contains the Commission's conclusions and recommendations. For convenience extra copies of these two chapters have been bound separately. That is in the small volume which has been handed to you, as we anticipated that you might want to refer to those two chapters more than to the entire report. |
