The Washington times., 1925-09-21
BY ROBERT $. THoRNBURGH


vitality important to national de-
power through economic dis
tricts," and without regard to
state lines, Secretary of Commerce
Hoover declared today in describing
the evolution and future of Amer
ica's electric utilities.
Growing up in a few years. faced
with what Hoover describes as one
of the greatest obligations ever i'm
posed on a single industry, the
electric utilities will furnish the
energy Of industrial tomorrow to
more than ever create in the
United States the most efficient
manufactories-the most Hveable
homes in the world.
1.-THE free flow of power across
State boundaries has become
question of importance because OF
the embargoes upon the export OF
hydro-electric power imposed by
some States" Hoover said.
COnstitutiOnality Doubted
"These embargoes are Of doubtful
constitutionality, but it may well
be doubted whether such policies
will work out in the end for the
interest of the originating State it
self.
1.-THE whole development of the
industry indicates that the most
economical use of water power
must be made in combination with
large central steam plants. Thus
district pooling of production and
distribution is necessary if hydro is
to be cheaply developed and used"
Since public policy, in turn for
limiting profits and fixing rates
has given protection to stable re-
turns to the electric utilities, the
industry has a tangible obligation
of rendering a wide-visioned SER
vice, according to Hoover.
THE first obligation is service
that now requires the full equip
ment of the country. with central
generation and interconnection, !"
Hoover continued.
1.-THE installation of these gigantic
equipments for the least capital ex-
penditure in such locations and in
such fashions as will give the
maximum efficiency, not only today
but in the long view, is vital.
Industry must assume the
burden Of development of service to
territories beyond the congested
districts. Such service upon eff
cient and low rate basis will bring
returns of greatest value to the in
dustry and community"
Among the difficult questions
faced by State utilities commissions
in their rela taonship to the electric
industry is the determination OF the
basis and methods of valuation of
property for rate making.
al T.
that the rate Of earning and charge
to the consumer shall be based
upon reasonable profit on actual
value" Hoover said.
"The commissions. broadly speak
ing, have ASSOCIATED capitalization
as shown by stocks and bonds, from
the valuation on which rates are
to be based. The consumer is thus
free from the burden OF over-cap-
italization. The commissions have
cast aside ali arguments based on
watered stock. Through their con
troll of security issues they are in
position to prevent over-capitaliza-
ton"
Hoover feels that by prompt
commission action the county can
avoid the forty years of delay
and muddling I'VE have gone
through in the attempts to value
the railroads"
In conclusion, he said:
I'VE shall sooner or later have
difficult questions to solve in con-
nection with the relationship of
by-product power from federal con-
struction of dams for flood control,
reclamation and, navigation, such
as Muscle Shoals, Colorado and ST
Lawrence rivers, and we should
solve them solely on engineering
principles