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

Commission regulation of public utilities
has grown so extensively in the last year
or two that it 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 Maya
zine of Wall Street by Arthur St George
Joyce, financial editor of the EVENING
LEDGER, in which these facts are em-
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 kind which in
spire confidence, both from the general
public and the utilities such commits
Rions 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 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 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 a 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
tions as we'll as the general public have
rights which ought to be respected These
commissioners have shown a decided
tendency to deal fairly with the corpora-
tons and while there have been handed
down some decisions which the utilities
operators and managers have regarded as
unfair and extremely radical there
nave been others-and they have been
in the maJority-wherein the commission
ers have dealt with delicate situations in
very commendable manner.
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 adj
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
big advantage to the investing public
which stands out prominently is the
power of supervision which these COM
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
wishing to put on the market
a security issue of any sort. to submit
their accounts to investigation by the
commissioners. The latter 80 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
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
warrant, puts its approval on
he securities and when they are taken
nto the open market and traded in, they
larry not only the Endorsement of n
equitable utilities company, but also the
approval of the Commonwealth i'm which
he corporation is chartered. 1t can be
seen at glance what benefit Is the
operation of such laws, to the public and
o the companies.
ISSUANCE OF SECURITIES.
Bonds having behind them tho indorse-
nent of a reputable commission inspire
public confidence to a marked degree and
ire more easily disposed of because of
his increased security. Such SUPER
'isiOn by State commissioners prccludes |
-lsO the possibility of n corporation not |
sound putting into the open |
market an issue of securities which |
night result in financial loss to in |
'estors.
Most OF the commissions have given |
mple evidence that they realize public |
Utilities are a natural monopoly; that |
with its resultant rate wars |
nd in the end inevitable combination |
sually resulting in over er-capitalzation is |
ar less satisfactory from every stand |
oint than the proper regulation of one |
protected during its growth. |
'or this reason IL has been the policy |
\ virtually every case where commits |
ions have jurisdiction, 10 discourage the |
rantlng of franchises to Competing conf |
anies The final result is the protection
+ public utility securities, and al the
anne time the guarantee of fair rates
nd good service to the public