Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-25

an address over the radio last
l. month. The following day the
Democratic New York World
which on this point may be accepted
as interpreted the ad-
dress. Gov. Roosevelt" the World
said, in part, "leaves no doubt that as a
candidate for reelection he will make
his chief issue the question of
| public utilities. There Is no other rea-
sonable Interpretation to be put upon
| q speech which directly challenged
the principle of rates based on the pres
ent value of public utility property as
built up by the conservative majority
of the United States Supreme Court.
. The governors address suggests
that he will ask his LDemocraticl party
to indorse the prudent investment
theory of valuation"
That Is that. There are two theories
about how to value a public utility.
One Is present reproduction value
that Is, what 1t would cost to reproduce
the property today. The other theory
Is called prudent investment"-that
Is, speaking roughly, the actual number
of dollars spent in building the property
over series of years.
| Over these two theories angry con-
| troversy RACES. The Supreme Court,
through its majority, adopts the pres
emit reproduction value" theory. There
upon the Democrats and tnsurgent Re
publicans in the United States Senate
cry to heaven. They determine to
| change the court. They announce, In
effect, that they will never let another
| man 20 on the court who follows the
"present reproduction value" theory.
They say that the present reproduce
ton value" theory Is too favorable to
the public utilities, gives the public
utilities too high valuation, enables
the utilities to make too much money
by charging rates based on the high
valuation.
Now, parallel to the Senate attack
comes Democratic Gov. Franklin Roose-
welt Of New York and says he, too, is
going to attack that theory, as an Incl
dent to running again for governor.
william Hard Is Quoted.
Comes now also the erudite and lucid
William Hard, who knows national pol
itics. He says that Gov. Roosevelt Is
going to carry this attack further than
the governorship of New York: that he
| IL going to carry 1t toward the White
House In 1882. 1.-THE boldest general
play In national politics." says Mr..
| Hard, els now being made by Gov.
Franklin D. Roosevelt Of New York.
He Is putting himself far out In the
lead % q prospective candidate for the
1892. Gov. Roosevelt has come out
squarely and uncompromisingly against
the Supreme Court [of the United
States1, Gov. Roosevelt has en-
barked not only on q State campaign,
but also on q national campaign to
reverse the decisions of the United
States Supreme Court regarding .yalu-
vet, m snort, according to Mr.. Hard's
well based surmise, Is going to run for
the Democratic presidential nomination
and for the presidency on q platform
which consists Of attacking the present
reproduction value" theory Of valuing
public utilities (together with some
other aspects Of public utilities).
The principal purpose Of the present
article Ii to say something designed 70
be explanatory about this present re-
production value" of public utilities.
Let us digress for q moment, however,
tO note that q very distinguished DEM
ocratic authority, Frank Kent of the
Baltimore Sun, thinks 1t unwise for
democratic Gov. Rooevelt and equally
uawise for the Democratic party as
a whole, to take up this issue. Says
[public utility valuation] instead OF
prohibition the paramount party issue
| in 1882 does not commend itself very
| strongly to some who think there Is
| q real chance TO win next time.
Il b weary poor political strategy. TO
do % n o 1fne way TO insure another
| Democratic defeat" Mr.. Kent thinks
that "the real purpose Of these power
issue advocates IS to avoid the intec-
their convention and their campaign"
Mr.. Kent, in short, thinks that the
Democrats, in choosing their issue, had
better stick to prohibition, or rather
to opposition to prohibition. "Prohibi-
tion," says Mr.. Kent, els the one sub
ject in which the voters, old and new,
are really deeply interested. Since 1928
the growth In wet strength is beyond
dispute"
Thus Mr.. Kent wants the Democrats
to forget public utilities as q presiden-
| tial campaign issue; he wants them to
make prohibition the issue and to take
the wet" side Of 1t, as they did in 1928.
Mr.. Kent, living in Maryland, may pos
sibly be Influenced by the fact that the
now excepting ex-Gov. Smith OF New
York; the most prominent wet" In
the Democratic party. If the Demo-
Gratis make opposition to prohibition
their issue, Gov. Richie Of Maryland,
rather than Gov. Roosevelt Of New
York, would be the logical nominee.
But we need attribute no local politi-
cal bias to Mr.. Kent. He Is wise
and experienced observer of politics on
national scale, and hosts Of able
Democratic leaders everywhere agree
with him on this point.
Solution Is Predicted.
Let us, however, get away from the
political aspect Of present reproduce
ton value"
with due respect to the learned au-
thorities quoted above, the writer Of
this article believes that the issue in
volved In that phrase Is going to be
solved, not by politics. but by economic
forces.
For proof, I turn to the market pages
of the New York Herald Tribune, which
carry daily a little group Of figures
under the usual title what Things
Cost" The figures. in essence, consist
OF a computation made by a distin-
guished economist, Prof. Irving Fisher
of Yale, and revised by him from
week to week. He takes each week. the
current prices of a large number OF
commodities. He averages them and
| from the average computes the chang
ing value of the dollar
The present value of the dollar is
going upward at present very rapidly.
| II We regard O dollar as having been
worth four years ago, in 1925, q hun
dred cents, that same dollar Is today
worth LIZA. The changing value OF
the dollar Is O difficult thing for the
average reader to follow. We may Illus
trate 1t by saying, very roughly and
with no attempt at exactness, that If
a dollar in 1926 would buy hundred
pounds Of wheat, 1t will buy today
| 1121z pounds Of wheat. And SO on
throughout the entire average range Of
Notwithstanding the things out
of which public utility properties are
made-steel, bone, wood, copper, espe-
cially copper.