A-65065, SEPTEMBER 4, 1935, 15 COMP. GEN. 167

A-65065: Sep 4, 1935

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IS AVAILABLE FOR NECESSARY USE IN THE PERFORMANCE OF THE ADDITIONAL DUTIES IMPOSED ON SAID COMMISSION BY THE ACT OF AUGUST 26. THE ENFORCEMENT THEREOF IS PLACED UNDER THE JURISDICTION OF THE SECURITIES EXCHANGE COMMISSION. CERTAIN PROVISIONS OF THIS ACT ARE SUCH THAT THE RECRUITING OF A STAFF IS MADE IMMEDIATELY NECESSARY. THE ACT FURTHER PROVIDES THAT WITHIN A YEAR FROM THE DATE A NOTIFICATION OF REGISTRATION IS FILED BY EACH COMPANY. TRANSACTIONS RELATING TO THESE MATTERS NATURALLY ARE TAKING PLACE DAILY. THE COMMISSION WILL VERY SHORTLY BE FLOODED WITH INQUIRIES AND REQUESTS FOR INTERPRETATIONS AND OPINIONS UNDER THE ACT AS WELL AS INFORMAL INFORMATION REGARDING THE REQUIREMENTS WHICH THE HOLDING COMPANIES AND THEIR SUBSIDIARIES MUST MEET IN COMPLIANCE WITH THE PROVISIONS OF THE ACT.

A-65065, SEPTEMBER 4, 1935, 15 COMP. GEN. 167

SECURITIES AND EXCHANGE COMMISSION - AVAILABILITY OF APPROPRIATION - ENFORCEMENT OF PUBLIC UTILITY ACT OF 1935 THE APPROPRIATION MADE FOR THE SECURITIES AND EXCHANGE COMMISSION IN THE ACT OF FEBRUARY 2, 1935, 49 STAT. 6, IS AVAILABLE FOR NECESSARY USE IN THE PERFORMANCE OF THE ADDITIONAL DUTIES IMPOSED ON SAID COMMISSION BY THE ACT OF AUGUST 26, 1935, 49 STAT. 803, SUBJECT TO THE RESTRICTIONS AND LIMITATIONS APPLICABLE TO THE USE OF SAID APPROPRIATION IN THE PERFORMANCE OF ITS OTHER DUTIES.

COMPTROLLER GENERAL MCCARL TO THE CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION, SEPTEMBER 4, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 27, 1935, AS FOLLOWS:

PUBLIC, NO. 2, 74TH CONGRESS, AN ACT MAKING APPROPRIATIONS FOR THE EXECUTIVE OFFICE AND SUNDRY INDEPENDENT EXECUTIVE BUREAUS, BOARDS, COMMISSIONS, AND OFFICES FOR THE FISCAL YEAR ENDING JUNE 30, 1936, PROVIDES:

"SECURITIES AND EXCHANGE COMMISSION

"FOR FIVE COMMISSIONERS, AND FOR ALL OTHER AUTHORIZED EXPENDITURES OF THE SECURITIES AND EXCHANGE COMMISSION IN PERFORMING THE DUTIES IMPOSED BY LAW OR IN PURSUANCE OF LAW AND FOR OTHER PERSONAL SERVICES, INCLUDING EMPLOYMENT OF EXPERTS WHEN NECESSARY; CONTRACT STENOGRAPHIC REPORTING SERVICES; SUPPLIES AND EQUIPMENT; PURCHASE AND EXCHANGE OF LAW BOOKS, BOOKS OF REFERENCE, DIRECTORIES, PERIODICALS, NEWSPAPER AND PRESS CLIPPINGS; TRAVEL EXPENSES, INCLUDING THE EXPENSES OF ATTENDANTS, WHEN SPECIFICALLY AUTHORIZED BY THE COMMISSION, AT MEETINGS CONCERNED WITH THE WORK OF THE SECURITIES AND EXCHANGE COMMISSION; GARAGE RENTAL; FOREIGN POSTAGE; MILEAGE AND WITNESS FEES; RENT OF QUARTERS OUTSIDE THE DISTRICT OF COLUMBIA; RENTAL OF EQUIPMENT; AND OTHER NECESSARY EXPENSES; $2,234,494: PROVIDED, THAT SECTION 3709 OF THE REVISED STATUTES (U.S.C., TITLE 41, SEC. 5) SHALL NOT BE CONSTRUED TO APPLY TO ANY PURCHASE OR SERVICE RENDERED FOR THE SECURITIES AND EXCHANGE COMMISSION WHEN THE AGGREGATE COST INVOLVED DOES NOT EXCEED THE SUM OF $50.

"FOR ALL PRINTING AND BINDING FOR THE SECURITIES AND EXCHANGE COMMISSION, $30,000.

"TOTAL, SECURITIES AND EXCHANGE COMMISSION, $2,264,494.'

ON AUGUST 26, 1935, THE PRESIDENT SIGNED THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935. THIS ACT PROVIDES AMONG OTHER THINGS FOR THE REGULATION AND SIMPLIFICATION OF PUBLIC UTILITY HOLDING COMPANIES AND THEIR SUBSIDIARY COMPANIES OPERATING OR MARKETING SECURITIES IN INTERSTATE AND FOREIGN COMMERCE AND THROUGH THE MAILS, AND THE ENFORCEMENT THEREOF IS PLACED UNDER THE JURISDICTION OF THE SECURITIES EXCHANGE COMMISSION. CERTAIN PROVISIONS OF THIS ACT ARE SUCH THAT THE RECRUITING OF A STAFF IS MADE IMMEDIATELY NECESSARY; FOR EXAMPLE, IT PROVIDES THAT ALL OF THE PUBLIC UTILITY HOLDING COMPANIES MUST BE REGISTERED WITH THE COMMISSION BY DECEMBER 1, 1935, BY THE FILING OF A NOTIFICATION OF REGISTRATION. THE ACT FURTHER PROVIDES THAT WITHIN A YEAR FROM THE DATE A NOTIFICATION OF REGISTRATION IS FILED BY EACH COMPANY, A REGISTRATION STATEMENT CONTAINING INFORMATION IN GREAT DETAIL MUST ALSO BE FILED. THIS MEANS THAT FORMS AND RULES AND REGULATIONS MUST BE DEVISED, DRAFTED, AND PROMULGATED, AND THE REGISTRATION FORMS UPON THEIR RECEIPT RECORDED, DOCKETED, AND EXAMINED FOR COMPLIANCE WITH THE ACT, AND RULES AND REGULATIONS AND ORDERS ISSUED INDICATING THE ACTION OF THE COMMISSION THEREON.

THE ACT ALSO PROVIDES FOR THE REGULATION OF SECURITY TRANSACTIONS BY REGISTERED HOLDING AND SUBSIDIARY COMPANIES, THE RESTRICTION ON BUSINESS OF HOLDING COMPANIES, THE APPROVAL OF ACQUISITION OF SECURITIES AND UTILITY ASSETS AND OTHER INTERESTS, THE REGULATION OF INTERCOMPANY LOANS, DIVIDENDS, SECURITY TRANSACTIONS, SALE OF UTILITY ASSETS, PROXIES, AND OTHER TRANSACTIONS. TRANSACTIONS RELATING TO THESE MATTERS NATURALLY ARE TAKING PLACE DAILY, AND THE COMMISSION WILL VERY SHORTLY BE FLOODED WITH INQUIRIES AND REQUESTS FOR INTERPRETATIONS AND OPINIONS UNDER THE ACT AS WELL AS INFORMAL INFORMATION REGARDING THE REQUIREMENTS WHICH THE HOLDING COMPANIES AND THEIR SUBSIDIARIES MUST MEET IN COMPLIANCE WITH THE PROVISIONS OF THE ACT.

THE REGULATION OF SERVICE, SALES, AND CONSTRUCTION CONTRACTS, AND RELATED MATTERS ARE ALSO MADE THE SUBJECT OF REGULATION BY THE COMMISSION. THE PROVISIONS OF THE ACT REQUIRE THAT RULES AND REGULATIONS COVERING THESE MATTERS MUST BE PREPARED AND PROMULGATED PRIOR TO APRIL 1, 1936, AFTER WHICH TIME THE PRESENT SYSTEMS OF PERFORMING SERVICE, SALES, AND CONSTRUCTION CONTRACTS NOW IN FORCE WITH MANY OF THE PUBLIC UTILITY HOLDING COMPANIES WILL BE UNLAWFUL.

ACCORDINGLY, IT IS NECESSARY THAT FUNDS BE MADE IMMEDIATELY AVAILABLE FOR AT LEAST CERTAIN FUNCTIONS REQUIRED UNDER THE ACT.

A SUPPLEMENTAL ESTIMATE FOR THE SECURITIES AND EXCHANGE COMMISSION WAS RECENTLY CONSIDERED BY THE BUREAU OF THE BUDGET AND TRANSMITTED TO THE CONGRESS AND MADE A PART OF THE THIRD DEFICIENCY APPROPRIATION BILL. YOU KNOW, THIS BILL FAILED OF ENACTMENT.

IN VIEW OF THE ABOVE, YOUR ADVICE IS REQUESTED AS TO WHETHER THE SECURITIES AND EXCHANGE COMMISSION IS AUTHORIZED TO USE FUNDS APPROPRIATED UNDER THE INDEPENDENT OFFICES APPROPRIATION ACT FOR 1936 FOR THE PAYMENT OF SALARIES AND OTHER OBLIGATIONS IN CONNECTION WITH THE ENFORCEMENT OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

THE APPROPRIATION QUOTED IN YOUR LETTER, AS MADE IN THE ACT OF FEBRUARY 2, 1935, 49 STAT. 14, PROVIDES FOR ALL AUTHORIZED EXPENDITURES OF THE SECURITIES AND EXCHANGE COMMISSION IN PERFORMING THE DUTIES IMPOSED BY LAW OR IN PERFORMANCE OF LAW, INCLUDING THE EMPLOYMENT OF PERSONAL SERVICES, FOR THE FISCAL YEAR 1936. SECTIONS 21 AND 31 OF ACT APPROVED AUGUST 26, 1935, 49 STAT. 834, 837, KNOWN AS THE PUBLIC UTILITY ACT OF 1935, PROVIDE AS FOLLOWS:

SEC. 21. NOTHING IN THIS TITLE SHALL AFFECT (1) THE JURISDICTION OF THE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, OVER ANY PERSON, SECURITY, OR CONTRACT, OR (2) THE RIGHTS, OBLIGATIONS, DUTIES, OR LIABILITIES OF ANY PERSON UNDER SUCH ACTS; NOR SHALL ANYTHING IN THIS TITLE AFFECT THE JURISDICTION OF ANY OTHER COMMISSION, BOARD, AGENCY, OR OFFICER OF THE UNITED STATES OR OF ANY STATE OR POLITICAL SUBDIVISION OF ANY STATE, OVERANY PERSON, SECURITY, OR CONTRACT, INSOFAR AS SUCH JURISDICTION DOES NOT CONFLICT WITH ANY PROVISION OF THIS TITLE OR ANY RULE, REGULATION, OR ORDER THEREUNDER.

SEC. 31. FOR THE PURPOSES OF THIS TITLE, THE COMMISSION MAY SELECT, EMPLOY, AND FIX THE COMPENSATION OF SUCH ATTORNEYS, EXAMINERS, AND OTHER EXPERTS AS SHALL BE NECESSARY FOR THE TRANSACTION OF THE BUSINESS OF THE COMMISSION IN RESPECT TO THIS TITLE WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT AND COMPENSATION OF OFFICERS OR EMPLOYEES OF THE UNITED STATES; AND THE COMMISSION MAY, SUBJECT TO THE CIVIL-SERVICE LAWS, APPOINT SUCH OTHER OFFICERS AND EMPLOYEES AS ARE NECESSARY IN THE EXECUTION OF THE FUNCTIONS OF THE COMMISSION AND FIX THEIR SALARIES IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923, AS AMENDED.

WHILE NO APPROPRIATION HAS BEEN MADE FOR THE SPECIFIC PURPOSE OF CARRYING OUT THE PROVISIONS OF THE ACT OF AUGUST 26, 1935, SUPRA, SAID ACT DOES IMPOSE CERTAIN ADDITIONAL DUTIES ON YOUR COMMISSION, AND, IN THE EXPENDITURE OF THE APPROPRIATION MADE FOR SAID COMMISSION IN THE ACT OF FEBRUARY 2, 1935, SUCH ADDITIONAL DUTIES ARE TO BE REGARDED AS "DUTIES IMPOSED BY LAW OR IN PURSUANCE OF LAW.'

ACCORDINGLY, SUBJECT TO THE RESTRICTIONS AND LIMITATIONS APPLICABLE TO THE USE OF SAID APPROPRIATION IN THE PERFORMANCE OF ITS OTHER DUTIES, IT IS AVAILABLE FOR NECESSARY USE IN THE PERFORMANCE OF THE ADDITIONAL DUTIES IMPOSED ON THE COMMISSION BY THE ACT OF AUGUST 26, 1935.