Introduction | Essay | Script | Lessons | Resources
ACT I, SCENE SEVEN (Holding Company)
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CHARACTERS
- LOUDSPEAKER
MARTIN INSULL
MAN WHO KNOWS
EIGHT STAGEHANDS
GEORGE W. NORRIS, Senator from Nebraska
SHERMAN MINTON, Senator from Indiana
BURTON R. WHEELER, Senator from Montana
THE MESSRS. CARMICHAEL, Director of a Holding Company
ANGUS K. BUTTONKOOPER, a consumer
LOUDSPEAKER: What is a holding company? Martin Insull speaking. (Lights come up on INSULL, downstage right.)
INSULL: To the holding companies is very largely due the credit for the great development of the electric light and power business during the last ten or fifteen years. [Federal Trade Commission, Vol. 71-A, p. 310.]
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LOUDSPEAKER: What is a holding company? (General lighting comes up on entire stage. MAN stands, center.)
MAN WHO KNOWS: I'll show you. (To someone off stage left) Hey, Charlie, bring on that pile of boxes.
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(Three STAGEHANDS enter, each carries a large wooden box, and sets it down. Two of the boxes — blue — are square, and the other — yellow — is rectangular and a little larger. The STAGEHANDS set down the blue boxes, side by side.)
LOUDSPEAKER: What are those?
MAN WHO KNOWS (to assistants): Stick around, I'll need you. (to LOUDSPEAKER) Now, imagine this box and this box (pointing to the blue boxes) are operating companies.
LOUDSPEAKER: Go ahead!
MAN WHO KNOWS: These two companies generate electricity and transport it by means of poles and wires, and so forth, to consumers in different sections of the country. They have no connection with each other. Both of them need expansion.
LOUDSPEAKER: But I asked about holding companies.
MAN WHO KNOWS: Hold your horses. I am coming to that. This is where the holding company comes in. (To an assistant) Hand me that box.... Thank you. (He places the third box — yellow, rectangular — on the first two boxes, linking them to make a pyramid) Now, this holding company (pointing to the yellow box) buys up the common stock of the two operating companies (pointing to the blue boxes) and extends to them the finances they need. [Federal Trade Commission, Vol. 72-A, pp. 118-l9.]
LOUDSPEAKER: I see. It puts up the money.
MAN WHO KNOWS: Well, not always.
LOUDSPEAKER: What else does a holding company do?
MAN WHO KNOWS: It is supposed to cut down the cost of overhead. Sometimes it provides a joint generating plant. Usually it pools the engineering and construction services. [Ibid., p. 195.]
LOUDSPEAKER: So that's a holding company. Thank you very much, and now we'll...
MAN WHO KNOWS: Wait a minute. You haven't seen anything yet.
LOUDSPEAKER: What's that?
MAN WHO KNOWS: I say, there's more to this holding company business. (To someone off stage, right) Hey, Joe, bring over that other set of boxes, will you?
(Three STAGEHANDS enter, each carries a large wooden box, and sets it down. Two of the boxes — blue — are square, and the other — yellow — is rectangular, and a little larger. The STAGEHANDS set down the blue boxes, left, next to the first set of blue boxes. Two STAGEHANDS follow with a long box — orange. This box is approximately three times as long as the first boxes are. The MAN pyramids the second yellow box on the second set of blue.)
MAN WHO KNOWS: Now here's another group of operating companies with holding company.... See. (He points to second set of boxes) Operating company, operating company, holding company. (Points to first set of boxes) Operating company, operating company, holding company. (To last two STAGEHANDS) Now hand me that long box! (STAGEHANDS help him place the long orange box on top of the two pyramids, linking them together.)
MAN WHO KNOWS (continuing): Now here is the top holding company.
LOUDSPEAKER: What does it do?
MAN WHO KNOWS: Well, it bears the same relation to these sub-holding companies that they bear to...
LOUDSPEAKER (interrupting): Oh, so now they've become sub-holding companies.
MAN WHO KNOWS: Oh, that isn't anything. When I get through piling up these boxes, those things (indicating) will be just sub-sub-sub-holding companies.
LOUDSPEAKER: I think we get the idea, if it's all the same to you.
MAN WHO KNOWS: If I can't show you, you had better listen to Senator Norris over here.
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(Lights come up on SENATOR NORRIS, left.)
SENATOR NORRIS: Scientific ingenuity has demonstrated that, in the electric world, to get the most economical results, we must have monopoly. But when electricity becomes common in every house, and as necessary as water to drink, if we are subjected to the will of a great monopoly that reaches from the Canadian boundary to the Gulf of Mexico, and from ocean to ocean, we will become in reality, slaves.... [ Congressional Record, February 29, March 5 and 9, 1928.] I desire to show the Senate today.... (Scrim comes down in front of NORRIS. On it, near top center, is projected a spread-eagle) ...by a few charts and illustrations, the absurdities into which the holding company leads, not only as it concerns the consumers of electricity, but also the honest investors in securities. [Congressional Record, June 3, 1935, p. 34.]
LOUDSPEAKER: Senator Sherman Minton of Indiana. (Lights come up on MINTON, right.)
SENATOR MINTON: Isn't it true, Senator, that, from the standpoint of those who have organized and control the holding companies, the higher they pyramid them, the less money it takes at the top, to control the entire structure? [Ibid., p. 34.]
SENATOR NORRIS: It is. This is the universal rule, running all through these corporations, from one end of the United States to another. They are interlocked, intermingled, intertwined, interwoven, mixed up, scrambled and all put together so that they are practically like one man, levying upon everybody who uses electric light or electric power in this country. (Lights go out, right. MINTON exits) Now I want to devote just a little time to the officers and directors of these corporations. Take the case of Mr. C. E. Groesbeck, for instance. [Ibid.] He is Chairman of the Board and director of the Electric Bond and Share Company. (The eagle fades and an animated chart showing an octopus progresses on the scrim) He is Chairman of the Board and director of American Investors, Incorporated, and the American Gas and Electric Company. He is Chairman of the Board and director of the American and Foreign Power Company, and the American Power and Light Company. He is a director of the Carolina Power and Light Company, the Cuban Electric Company, and the Mississippi River Fuel Corporation. He is Chairman of the Board and director of the Lehigh Power Securities Corporation. He is Chairman of the Board and director of the Electric Power and Light Corporation. He is Chairman of the Board and director of the United Gas Corporation. He is a director of the Pennsylvania Power and Light Corporation. He is a director of the Tri-Continental Corporation, the Havana Electric and Utilities Company, the Utah Power and Light Company, and the Phoenix Utilities Corporation. In addition, he is a director or other officer in thirty-two corporations scattered all over the world!
(The octopus movie holds and is static.)
LOUDSPEAKER: Senator Burton K. Wheeler of Montana. (WHEELER enters, left.)
WHEELER: In other words, when the Electric Bond and Share Company makes a contract with, say, the Florida Power and Light Company, the same officer who represents the Electric Bond and Share Company also represents the operating company, and when contracts are made, the same man signs the contracts for both parties? [Congressional Record, May 31 to June 14, 193 (one volume).]
SENATOR NORRIS: What you say, Senator, is absolutely true.
WHEELER: Then this puts a director in the almost impossible position of sitting across the table from himself and signing the contracts for the holding company and for all the different operating companies?
SENATOR NORRIS: That is correct.
LOUDSPEAKER: An almost impossible position.
(Lights go out on WHEELER and NORRIS. Scrim goes up. Lights come up on CARMICHAEL seated at cut-out desk, right. Left of desk is an empty chair. During the following, flesh-pink light is on CARMICHAEL when he sits at desk, which changes to steel-blue when he moves to chair, desk left. There is projected behind him a cartoon of a triple mirror.)
CARMICHAEL: [This character is fictional.] Mr. Carmichael, I've got a couple of propositions for you, good propositions, that can only result in great benefit to your company, your stockholders and your consumers.... Now one of our subsidiaries is the Great Southwestern Engineering Company. I want them to look over your plant and give you some advice on how to economize on your transmission system. This service will cost you fifty thousand a year. (He rises from desk, and changes to chair left, lights on him changing) Fifty thousand! That's a lot of money for a small plant like ours, Mr. Carmichael. But if you say so, I guess it's worth it.... Where do I sign? (Takes pen from desk and signs contract lying on desk.)
LOUDSPEAKER: Now this service may be worth fifty thousand a year or fifty cents. Nobody knows but Mr. Carmichael, and he won't tell.
CARMICHAEL (changing to chair at desk): Now, Mr. Carmichael, I've got something that's really going to interest you, something extra special. You know that piece of real estate in your town that I own? (Changes to chair, left) You mean that one down by the river you paid a hundred thousand for and got stuck? (He laughs. Changes to chair at desk) Yes, that's the one. You'll need it for that new plant you're going to build. I'll tell you about that later. My price is a hundred and fifty thousand, Mr. Carmichael. (Emphatically) And you can't afford to turn it down. (Changes to chair, left) A hundred and fifty thousand! Well, maybe you're right, Mr. Carmichael. Where do I sign? (He signs and changes to chair at desk.)
LOUDSPEAKER: Maybe he is right, but nobody will ever know but Mr. Carmichael.
CARMICHAEL: And now I'm going to let you into a little secret. Mr. Carmichael, I've decided to merge your company with National Electric! (Changes to chair, left. From here on action speeds up) National Electric! Why, they've been losing money for years! (Changes) I know it. That's why I'm doing it. (Changes) But that'll pull my profit sheet all the way down! (Changes) Those are my orders, Mr. Carmichael. (Changes) But, Mr. Carmichael...? (Changes — and coldly) Yes, Mr. Carmichael? (Changes) Oh, never mind.... Where do I sign? (Signs and then starts mopping his brow, exhausted from his exertion. As he does this, spotlight picks up CONSUMER entering, left. CARMICHAEL changes back to desk, and flesh-pink light stays on him throughout remainder of scene. CONSUMER walks across stage timidly, looking around to see if he's in the right place. He crosses to desk.)
CONSUMER (removing hat): Mr. Carmichael?
CARMICHAEL: Yes?
CONSUMER (very timidly): Can — I — just — talk to you for a minute?
CARMICHAEL: Who're you?
CONSUMER: My name is Angus K. Buttonkooper. [Fictional character.] I'm a consumer.
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CARMICHAEL (His manner changes; he becomes jovial): Certainly, Mr. Buttonkooper. Sit right down. Have a cigar! (Hands cigar to CONSUMER) Now what can I do for you?
CONSUMER: I think my rates are too high!
CARMICHAEL: That's the proper spirit, Mr. Buttonkooper. I admire a man who'll stand up and fight when he thinks he's been stepped on. (CONSUMER grins) Did you know we just entered into a contract with the Great Southwestern Engineering Corporation? They're going to teach us how to economize.
CONSUMER (grinning): That's nice.
CARMICHAEL: It'll cost us fifty thousand a year. (CONSUMER'S grin dies) And we've finally succeeded in closing the deal for a piece of property we've been needing a long time. It took a great deal of persuasion, Mr. Buttonkooper, a great deal of persuasion, but we finally landed it. That's a hundred and fifty thousand more. (CONSUMER'S face grows longer) Incidentally, did you read that the company is in such a bad shape that we had to float a million-dollar bond issue? (Nodding vigorously, as CONSUMER just stares at him) It's all in the papers, Mr. Buttonkooper, it's all in the papers.... Now there's been a movement among some of our officers to — to... (He stops and regards CONSUMER, who awaits the news fearfully) ...but I don't think you have to worry, Mr. Buttonkooper....
CONSUMER (with a sigh of relief): You mean you won't raise my rates to pay for all this?
CARMICHAEL: Not one red cent. Our company realizes its obligation to its consumers.
CONSUMER: Thank you. Thank you.
CARMICHAEL: Good day, Mr. Buttondropper, Mr. Buttondripper, Mr....
(CONSUMER starts to exit, but comes back and returns cigar to CARMICHAEL.)
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LOUDSPEAKER: Senator George W. Norris of Nebraska. (Lights come up on NORRIS, left.)
NORRIS: Everything that is produced by electric power has contributed to it. Every common little home must make its contribution and every big factory! In the end it all comes out of the consumers, the common people of the United States! In my opinion the holding company constitutes the greatest evil of the civilized age! [Congressional Record, May 31 to June 14, 1935 (one volume).]
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Introduction | Essay | Script | Lessons | Resources