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.

| oCllNCs
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 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 equitably 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 regula-
tion 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 mnDicipalitIac ha, tpt
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
tions 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 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.
at 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 II the issue is warranted
and, II so, to see that there Is sufficient
security behind the issue to guarantee
protection to investors who nut 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
conditions warrant, puts its approval on
the securities and when they are taken
into the open market and traded in. they
carry not only the Endorsement of n
reputable utilities company, but also the
approval of the Commonwealth in which
the corporation is chartered. 1t can be
seen a 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 a marked degree and
are more easily disposed of because of
this increased security Such SUPER
vision by state commissioners procIudcs 4,
also the possibility of a corporation NOT
financially sound putting into tho open
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, thar |
competition with its resultant rate wars |
usually resulting in decentralization, is /
far less satisfactory from every stand I
point than the proper regulation Of one
company protected during its growth /
For this reason II has been the policy
siOns have jurisdiction. to discourage the
granting of franchises 10 competing com
panies The hnal result Is tho protection
of public utility securities. and at tho
same time tho guarantee Of fair rates
a q iEl ft lNE 10