Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1929-04-11
CONTROL OF POWER
PLANTS BY STATE is
ROOSEVELT'S PLAN
Would Wholesale to Private Campo.
MES Who Contract to Maintain
Low Rates.
(From Labor)


New York, has sent special message
to the legislature of that state urging
public ownership and operation of a
great hydro-electric plant on the St.
Lawrence, with, IF possible" distri-
button of the current by private cap
ital, under contract that will insure
low rates to the consumer.
THE governors contract plan is
the best yet discovered for making
utility companies behave-if any
thing will make them behave" says
Senator George w. Norris of Nebraska,
who has devoted more thought to the
power problem than any man in pub
lie life in this country.
In a brilliant message, Governor
Roosevelt says that the attempt to
regulate public utilities by commits
sions has failed, chiefly because the
Federal courts have stepped in and
hamstrung the commissions.
In the beginning. he says, it was
intended that public utility corpora
tions should secure fair return on
their actual investment.
What Governor Proposes.
But the Federal courts have boosted
valuations in one way or another, and
lacked up" rates to pay returns on
fake valuations until. Governor Roose-
welt declares, it is legally possible for
public utility companies to get so or
100 per cent per year of profit on their
real investment.
Governor Roosevelt, therefore, re-
fuses to consider leasing the power
sites to private companies. Instead,
he proposes:
1. That the state, through five
trustees, shall build, own and
operate the generating plants
2. That the current shall be
sold wholesale to private COM
panies, if they will take it under
the conditions prescribed.
3. That the companies must
sign contracts to sell to consum-
ers at rates which will pay oper-
ating expenses, depreciation, in
terest on bonded Indebtedness
and not to exceed per cent on
the remainder of the capital
actually invested. For example:
Companies Must Be Decent.
If companys stockholders invested
So, 100000 of their own money and
borrowed $5,OOO,OOO more on bond
issue at, say, 5 per cent, it could earn
5 per cent on the stockholders money,
but only per cent on the bond issue,
or an average of 615 per cent on the
total amount invested.
1t will be seen, too, that Governor
Roosevelt proposes to hold the dis
tributing companies to decent prices
through contracts and not by "regu-
lation," which he holds, has ceased
to regulate. He issues this significant
challenge to private enterprise"
Are the business men of this state
willing to transmit and distribute this
latent water power on fair return on
their investment? If so, here is their
opportunity. If not, then the state
may have to go into the transmission
business ITSELF"
Brave Step, Says Norris.
Senator Norris is greatly pleased
with Governor ROOSevelt's proposal,
| but hopes he will go one step farther.
Governor Roosevelt has taken a
step-a very brave step-in the
right direction" said the Senator.
HE will find that there is no logical
place for him to stop until he comes
clear across the stream, and advocates
public ownership of the distributing
system as we'll as the generating sys-
| tenn.
Though l have no special infor-
nation on which to base my judg-
ment, l believe that Governor Roose-
welt would be glad to come clear
| across the stream if he thought it
could be done. | believe he has gone
| just as far as he has any hope of get
ting the legislature to follow him.
Plan Best Discovered.
"His insistence on rates based on
actual investment is entirely right,
though he would allow too liberal re-
turns. His contract plan is the best
yet discovered for making utility
companies behave-if anything will
make them behave"
| Governor Roosevelt has suggested
Charles Evans Hughes and Alfred E.
Smith as two of the proposed five
trustees.
1t is estimated that nearly 2,OOO,-
900 horsepower, shared equally be-
tween New York and Canada, can be