Montana labor news., 1932-06-02
PEOPLE PAY FROM 300 TO 5000 PER CENT OF THE COST TO
PRIVATELY OWNED POWER CORPORATI0NS-THE BIGGEST
STEAL IN HIsTORY-22OO CITIES OWN POWER PLANTS
PEOPLE FAVOR MUNICIPAL OWNERSHIP.

The biggest steal in history
A racket that makes Al capone and other famous gangsters look like
mere stumblebumsl
A financial oigarchy, whose corruption, coercion and classification threat
en- to wreck the American government.
This is the picture that A. c. Todd, engineer, and representative of the
Fairbanks, Morse and Company, drew of the electric light and power trust
in the United States.
in the last generation has spread Tut ver the country, absorbing small
power companies, pyramtdng a capital structure N sale and resale and
huge initiation of values until it resembles a pyramid OF Cheops upside
down, Mr.. Todd said:
Electric power is the only commodity for which the people pay from
300 to 5000 per cent of the cost. 1t is o. of the few mediums by which
a few men, through vast holding companies though owning a niggardly
few shares, can control the desdnies of the nation and through organization
and propaganda mould the policy of newspapers, schools, the United States
Chamber of Commerce, banks, and in fact nearly every agency in modern
life.
Manufacture Evidence.
Through its ardings in the National Electric Light Association, it will
manufacture evidence fasify records, publish streams of vIifcation, shat
ter character, in fact do anything but commit murder to deceive the public
In fact, so great is the menace of the electric light and power trust that it
threatens to wreck capitalism, banking, Or modern business structure, and
drag down with it our entire society. The power of this group is greater
than any even known to the world. 1t is a octopus whose tentaeles reach
into every home in the United States, and the only way to crush it is
by cities owning and operating their own power plants"
Twenty-Five hundred cities own their own power plants
sevenytwo hundred cities own water systemsl
sixty-nne cities conduct municipal plants so efficiently charging lower
rates than privately owned plants, that no fraction of a mill of taxation is
levied for administrative affairs of these municipalities
Pasadena, o. a load, 95 per cent of which is domestic, earned 100000
one year on the operation of its light plant, and built a municipal auditori
These were some of the statistics cited by Mr.. Todd, who hurled this
challenge to the opposition: "Cte n Ease o. a municipality owned plant
in a city of wei 5000 which during the last ten years has not made a
success, and I will pack up my suitcase, leave town and not say another
word about municipality owned light plants"
Can Compete.
In clear language m torcble manner, MI. Todd proceeded to explain
how a municipal plant cal compete with a privately owned and operated
plant.
an the first place" he said, "a privately owned plant generally has to
earn interest for its stockholders o a physical valuation of investment from
10 to so times greater than the actual cost of replacement. In fact, a loan.
o n electric plant is considered such a gitedged investment by Wall
Street that a wenestabished rule has been laid down that bonds will be
sold and any project financed so long a gross earnings are 1h to 2h
times the interest charges of the bonds.
"That is to say, the actual investment is not considered, only the gross
earnings. With this figure fixed, securities totalmg five to nine times
the amount of actual cost of building a plant and transmission lines are
issued. This has been done all over the country, until we have special re-
ceiverships of 81, 500O 900, the biggest receivership in history, like that
If Md1a West Utilities with Samul Tnsu1 its nreeident and orpanizer
acting as receiver for five years. Power investments in America have been
baIooned to such prodigous size that their collapse threatens the fon-
datons of ur government and the ruin of hundreds of thousands of in
vestors, who have been taken in for the biggest steal of the ages"
Control Commission.
So vast is the power of the power trust that public utilities commissions
created for their control within the states cannot prevail against them,
torates and tn provision in most states that companies may charge rates
high enough to pay interest O. their investments have made public utni-
ties commissions mpotent.
eve hear of the dirty politics invariably played once public utilities ire
publicly owned and operated" said Mr.. Todd, "bt remove the power trust
from the field and the dirty politician disappears, for there is me less
influence ir nm 10 serve AFTER a n experience OF years with publicly
owned and operated utilities, I al assure you there is far less politics in
public ownership than there is in most of the privately owned and operated
organizations.
"A municipal plant becomes a source of civic pride. Officials vie with
one another in setting a record for efficiency and low costs"
Fully 80 per cent of the cost of electricity in the United States goes
to pay off capital accounts and charges, according to Mr.. Todd, who, in
reply to a question as to what power could be manufactured for in Salt
Lake, said.
Il would jump at the chance to supply power for Salt Lake at III cents
a klowatt hour. The average is now AZ cents a K. W. H. Total cost of
manufacturing power from coal should not be more than V cent a K. W. H.
Another u cent added for interest and capital charges would bring the
total to cent a klowatt hour, and anything yer III cents a klowatt
hour is extortion.
"The Utah Power and Light Company has a capital structure of sS,
100000. Interest must be earned on this tremendous sum Probably the
total investment of the company does not exceed s37,OOO0OO, Sc that the
public must pay rates high enough to guarantee dividends of s1oOOOOOO
on its common stock. Two and a quarter millions of dollars was the
price paid here for this $5ooooOo0 initiation of values. This sum is only
part of it since interest o bonds and preferred stock dividends have
"odgens share of Utah Power and Light Company capital charges is
QI