PUBLIC UTILITY HOLDING COMPANY ACT 49 Stat. 803 (1935)

This measure was an important part of the legislative program of President FRANKLIN D. ROOSEVELT. Two leading supporters of the bill were Senators GEORGE NORRIS and HUGO L. BLACK. The act's objective was to disperse ownership and control of the nation's gas and electric utilities, then highly concentrated in pyramids of corporations with holding companies at the top. The act required holding companies to register with the Securities and Exchange Commission and authorized the SEC to limit a company's operations to a single region. A "death sentence" provision authorized dissolution of a company that did not show, within five years, that it was serving an efficient local function.

The great holding companies sought to challenge the constitutionality of the entire act in an early TEST CASE, but government lawyers managed to persuade the Supreme Court to defer the omnibus attack and consider the act's registration requirement separately. The Court upheld that requirement in Electric Bond & Share Co. v. SEC (1938). The other provisions of the law came before the Court after Roosevelt had appointed seven Justices. Those provisions were sustained, with broad readings of Congress's power under the COMMERCE CLAUSE, in North American Co. v. SEC (1946) and American Power & Light Co. v. SEC (1946). By 1952, more than 750 holding companies had been dissolved.