Drenching

Inability to get capital financing was one complaint that jelled last year at the Small Businessmen's Conference (TIME, Feb. 14, 1938, et seq.). Since then three bills have been introduced in Congress to improve credit lines to small business. Last week Acting SEC Chairman Jerome Frank announced that all three bills would be held in abeyance while SEC and the Junior Chamber of Commerce collaborated in a study of the problem.

Under the direction of a young SEC lawyer named Peter H. ("Handyman") Nehemkis Jr., surveys will be made in 561 towns and cities. SEC itself will concentrate on ten "representative" cities.* Already well under way, the job is to be finished by June 1. Said Jerome Frank: "We want to drench ourselves in facts." A sample question small businessmen will be asked: What per cent of your inventories have you borrowed against?

Last week SEC also did the following for and to U. S. business: > Cracked out its first accusation of political bribery in violation of the Public Utility and Securities Acts. It charged the $255,000,000 Union Electric Co. of Missouri, a subsidiary of North American Co., with making contributions to certain candidates for public office, covering up the act with various "false and misleading" items in its balance sheets. Possible penalty for Union Electric officers if the charge is substantiated at hearings next week: prison terms of five years or fines of $5,000, or both.

> Announced that any law firm retaining former SEC employes for advice on matters with which they became familiar while at SEC might lose its right to practice before SEC. SEC thereupon sued to enjoin former SEC Lawyer William J. Mahaney from "continuing to disclose" confidential information to his present employer, Banker L. M. Giannini, who is fighting an SEC attempt to delist the stock of Transamerica Corp. from the New York, San Francisco and Los Angeles exchanges.

> Extended its attack on the Giannini interests by seeking a permanent injunction to restrain Timetrust, Inc. from further sale of certificates representing ownership in various Giannini banks. About $1,600,000 in such certificates is outstanding. SEC charged that they are a means of "obtaining money ... by means of untrue statements" such as that their purchase is similar to starting a savings account. Timetrust's President Meredith Parker retorted that SEC was using "unlawful and unwarranted tactics" to embarrass the Giannini family.

*The ten: Omaha, Fall River, Birmingham, Toledo, Detroit, Houston, Seattle, Denver, Portland, Dallas.

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