The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1930-11-26
The One Protection


Within the next two years the street cars
of this city in all probability will be oper-
atedN by the insult interests.
Whether the people permit the proposed
trade Of insult securities for present bonds,
or the present company is sold under the
hammer in the receivership courts, the re-
suits in the end will be the same. Mr.. insult
will have the lines because no other public
utility owner seems to want them, and the
public as yet does not trust itself far enough
to provide its own transportation
The plan now being placed before city
officials is one of substitution of new bonds
for old ones. The present bondholders see a
faint hope of getting something out of the
plan, perhaps more than if the lines were
sold by receivership.
1t is probable that the most they will get
is hope, but bankers and brokers are for the
plan and the utility machine is at work to
put it over.
To the public is offered the first phase of
''service-at-cost," which is what would hap
pen under public ownership. And this would
be very fine, if it really were true. 1t could
be made true if the insult organization didn't
lose interest in the plan.
The first step, of course, would be prop
er appraisal of the true value of the lines,
not as system, but as junk, for that will be
the basis on which it would be sold under the
receivership and is the description given by
the high fnanciers who are handling the
matter.
It is not question of how much water is
being squeezed from the capitalization, but
whether all the moisture is evaporated The
public ought not to pay on values which do
not exist.
But even before this is established, there
is a duty of the legislature to provide the
one safeguard which really can assure the
public that it gets service at cost, which is
what presumably is offered.
That protection can come only through
passage of the strongest kind of a law to reg
llate the holding companies of the state.
When regulation made it impossible for
public utilities to make enormous profits,
high finance brought to light the holding
company. Through these companies the
public and the stockholders are taxed for
gigantic sums
The holding company furnishes the en-
cheering for new projects and extensions
It's charges are not modest for this service.
The holding company first collects fee
for management, although each company has
highly paid officials to manage the proper
ties. The holding company acts as broker
for purchase of all materials, including coal
for light plants. The commission charged is
high
1t would be no trick for the holding COM
pany which proposes to underwrite the new
bonds to take out several millions a year and
yet make good its claim to give service at
cost"
Before any public approval is given to
the new plan, which will determine the rates
of car fares for generations, it would be well
to investigate why the old company is on the
rocks financially.
If the public service commission was
either able or interested, it might find some
interesting figures in the sums paid for
power not manufactured by the railway
plants.
Of course, objection will be raised that
the public service commission will be as
much controlled by holding companies as it
has been by utilities. But there is always the
hope that some day the state will have
Governor who is not influenced by the utility
monopolies and that commission will be
named whose members know something of
the problem and who are not picked by the
interests.
Passage of a law regulating holding COM
panies i'll advance Of any permit to establish
the plan will indicate the sincerity of the
claim that the plan really is one to give
'service-at-cost."
The Stain Interview
Josef Stains extraordinary interview with Eugene