The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1926-12-18
THE MERGER MILLIONS

Inc people HOW -udNS a CuduCO W 1nhS % NAoN
glimpse at what is involved in the application to
merge the two local light and power companies
under a valuation of more than ~fifty-five millions
Of dollars.
For brushing away all argument and technical
tiles, a permit to issue securities in this huge sum
means that the people must pay dividends and
interest upon this sum.
The engineers for the Public Service Com
mission say that both plants could be rebuilt today
for thirty-three millions of dollars.
Between the thirtythree and the ~fifty-five mil
lions Of dollars are those other millions which are
to be the price Of obtaining what the city should
have and must have-one system, economically
managed, with the waste and duplicate effort re-
moved.
The people, and especially the large users Of
power. should be interested in having the system
under a single management.
That would mean, if the people receive the
benefits, that they would no longer have to support
two sets of high-priced officials, not be compelled
to pay for two sets of lines; two sets Of machinery
to produce power; two armies of employees.
But it is rather appalling to think that plants
which could be rebuilt today for thirty-three millions
are to be loaded up with mortgages for twenty-five
millions Of dollars in excess of that figure.
That would suggest that the way to get power
and light at decent prices and economical manage
ment might be to build municipal plant which the
people would own.
More appalling is the fact that this estimate is
at the present cost Of reproduction, for that means
that the people are to pay for the war which they
fought and for which they sacrificed.
Very little of the materials which are in the
present plants were bought at present prices.
Most of the materials, the copper, the steel, the
machinery, were purchased when the prices were
about half the present figures.
nh hoIor tbof want info tba pOOgfructiOn WAS
cheap labor; not the high-priced labor of today; not
hired at the wage lifted by war conditions
1t is specious to argue that a public utility has
a right to profit by the rise in price of labor when
it sells its plant to new owners.
The whole theory of public regulation and
monopoly is based upon a theoretical partnership
with the consumers, whose streets and other prop
erty is used.
Just because the utility owners seek to get out
of business and turn their property over to new
owners is no reason why the people should be com
PEELED to pay them for a profit on steel and copper
which went into their plants or for the difference
between the wage of men who actually built those
plants and what it would cost to hire other men to
do that work today.
Yet these are the figures of the commission;
the figures which are twenty-five million dollars
shy of the amount of securities which the hnanciers
ask permission to sell to widows and orphans
at a profit.
If there is to be any real justice, the basis
should be the actual investment in these plants
which existed only by public permission and which
used public property as the. basis of their
operation.
IF these utility men wish to sell, there is no
reason Why the public, their theoretical partner in
the business, should be compelled to pay for changed
conditions in millions of dollars for which no service
is rendered or has been rendered.
Any merger hearing, and every hearing, must
be out in the open and before all the. people, should
consider this fact.
But there is one other phase of the matter IN
which the Public Service Commission. If it desires
public confidence should show more haste than in
the merger matter.
That is the charge made by Attorney General
GiIliom that the two light and power companies
are today violating the law by giving low rates to
powerful interests and by this means loading up the
home owners with a half million dollars a year of
excess which they should not pay.
The law makes this a crime. 1t fixes a peni
tertiary term for officials of utilities which practice
it as one of the possible p~unishments.
The law makes it a crime to receive such a
rebate and provides punishment for those who take
this form of bribery. .-,...:.,.....
the attorney general is the legal officer of the
State, whose duty it is to enforce the law.
The commission is charged with the express
duty of investigating any such offenses.
The charge by Attorney General Gillom listed
the indianapolis News as one of those institutions
to which rebates have been given.
The first and immediate act, and there should
be plenty of time before Wednesday, must be an
investigation of these charges of the attorney gen
eral and a prosecution of every one involved.
It is rather a joke to listen to pleas of two com
panies that are branded as criminals and law
violators. But the joke, says Mr.. Giliom, is costing
the people of this city, who can least afford to pay,
one-half milli9 dollars every year.
If that charge be true, and no action is taken,
then all law becomes a mockery and the next
Legislature should vote. to close the doors of jails
and penitentiaries, abolish courts and also the
office Of attorney general.