Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-09-22
UTILITY COMPANIES
FAVOR REGULATION
BY COMMISSIONS
Nearly Every State Now
Has Such Bodies and
Their Decisions, Generally
Speaking, Inspire Conf
dence.

oOLlNCs
Commission regulation of public utilities
has grown so extensively in the last year
or two that IL is now one of the most
important problems with which the pub
lice service corporations of the country
have to DEAL Virtually every State in
the Union has a regulatory commission
of some sort.
These commissions and their relation
to investors and public utility companies
are discussed in an article in the Maga-
zine of Wall Street by Arthur st. George
Joyce, financial editor of the EVENING
LEDGER, In which these facts are en-
phasized.
Commission regulation OF public
utilities has been discussed from many
angles, and in the final analysis the judg-
ment Of those who know has almost
universally been that where this regula-
tion is eauitably enforced and the reg
ulatory acts are of a kind which in
spire confidence, both from the general
public and the utilities, such commits
sions are of material benefit to all con-
cerned.
There has been a great deal of regua-
ton within the last few years. Figures
show that an average of one State a
month enacted laws last year creating
these commissions. Supervision by State
and municipal governments seems to be
the order of the day. Government
ownership is talked of in many sections,
and ri
the business of operating street railway,
electric light and power plants
The utility corporations do not object
to regulation by State or municipality
On the other hand. they welcome it.
Experience has shown that in most of
the states wherein this supervision is in
force there has been desire on the part
OF the commissioners to look at condi-
tions In common sense light, and give
recognition to the fact that the corpora
tons as well as the general public have
rights which ought to be respected.
ACTS CONSIDERED FAIR.
"on the whole, therefore, the reg
ulatory acts now In force are considered
fair and reasonable to both the public
and the public service corporations.
Where regulation is just and wisely ad-
ministered, there develops a better feel
Ing all around and there Is added pro-
lection given the companies the State
or municipality, as the case may be,
and the general public. In most of the
States which have commissions, the one
big advantage to the investing public
which stands out prominently is the
power of supervision which these COM
missions have over the issuance of
securities by the public service COM
panies-a dangerous power. incidentally.
when in the hands of an unskilled or
partisan commission
1T Is mandatory, In these States. for
companies wishing to put on the market
a security issue of any sort to submit
their accounts to investigation by the
commissioners. The latter go carefully
into the financial condition of the COM
pany to learn IL the issue is warranted
and, If so. to see that there is sufficient
security behind the issue to guarantee
protection to investors who put their
money into the new bonds or notes or
whatever form of security may be de-
cided upon by the companies In this
way the State virtually indorses the
securities so issued. The commission If
the securities and when they are taken
into the open market and traded in, they
carry not only the Endorsement of a
reputable utilities company but also the
approval of the Commonwealth in which
the corporation is chartered II can be
seen at a glance what a benefit is the
operation of such laws, to the public and |
TO the companies.
ISSUANCE OF SECURITIES.
Bonds having behind them the indorse- |
ment of reputable commission inspire |
public confidence to marked degree and |
are more easily disposed of because of |
this increased security Such super- |
vision by State commissioners prccludrs |
also the possibility of corporation not |
financially sound putting into the omen |
market an issue Of securities which |
might result in financial loss to in /
vestOrs.
Most of the commissions have given /
ample evidence that they realize public
utilities are natural monopoly: that |
competition, with its resultant rate wars |
and in the end inevitable combination |
usually resulting in decentralization, is
far less satisfactory from every stand
point than the proper regulation of one
company protected during its growth
For this reason it has been the policy
in virtually every case where commits
sions have jurisdiction, to discourage the
granting of franchises to competing com
panies, The final result is the protection
same time the guarantee of fair rates
nod . ia