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.


has grown SO extensively in the last year
or two that 1t 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-
ton 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-
tlon 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 some municipalities have gone into
the business of operating street railway,
electric light and power plants.
The utility corporations do not object
to regulation by State or municipalit.
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 a desire on the part
Of the commissioners to look at cond-
uons 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 he respected.
ACTS CONSIDERED FAIR.
"On the whole, therefore. the req
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 adj
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 NAV be.
and the general public In most Of the
States which have commissions, the one
Dig 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
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 If 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 NAV be de-
clded upon by the companies. In this
way the State virtually indorscs the
securities so issued. The commission II
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 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 a marked degree and
are more easily disposed of because of
this increased security Such super
vision by State commissioners prccludes
also the possibility of n 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 a natural monopoly; thnI
competition, with its resultant rate wars,
and In the end inevitable combination
usually resulting in yeT-capitalizati0n, is
far less satisfactory from every stand
point than the proper regulation of one
company protected during its growth
For this reason II has been the policy
in virtually every case, where commits
sons have jurisdiction, TO discourage the
granting of franchises to competing com
pauies. The final result is the protection
of public utility securities, and at the
same time the guarantee of fair rates
and good service to the Dublic "