Evening star., 1932-09-22

many instances departed from its proper
sphere of action, and. I may add, from
its theory Of responsibility. It is an
undoubted and undeniable fact that in
our modern American practice the
| public service commissions of many
States have often failed to live up to
the high purpose for which they were
| created. In many instances their selec-
ton has been obtained by the public
utility corporations themselves. These
corporations have often Influenced, to
the prejudice Of the public; the actions
| of public service commissions. More
over. some Of the commissions have,
either through deliberate intent or
through sheer inertia. adopted a theory,
a conception, of their duties wholly at
variance with the original object for
which they were created
Let me illustrate. When became
Governor I found that the Public Serv-
ice Commission Of the State Of New
York had adopted the unwarranted and
unsound view that its sole function was
to act as an arbitrator or a court be-
tween the public on the one side and
the utility corporations on the other
I thereupon laid down a principle which
created horror and havoc among the
insults and other magnates Of that type.
declared that the Public Service Com
mission is not mere judicial body to
act solely as umpire between complain
ing consumer or complaining investor
on the one hand and the great public
utility system on the other hand.
declared that, as the agent Of the Legis-
lature, 1t has delegated authority to act
as the agent of the public; that 1t Is
not mere arbitrator as between the
people and the public utilities, but was
created for the purpose OF seeing that
the utilities do two things-frst, give
service; second, charge reasonable rates
that in performing this function it
must act as agent of the public upon
its own initiative as well as upon petit
ton to investigate the acts Of public
utilities relative to service and rules
and to enforce adequate service and
reasonable rates.
The regulating commission, my
friends, must be tribune to the peo-
pie, putting its engineering, accounting
and legal resources into the breach for
the purpose of getting the facts and
doing justice to both the consumers and
investors in public utilities.
Protection for Public.
This means positive and active pro-
lection Of the people against private
greed.
So much for the simple, clear, def
mite theory OF regulations theory
which today Is observed more in the
breach than in the observance.
Now I come to another principle,
which. in spite of having been be-
fogged and bedeviled by many utility
companies-and, am sorry to say. by
many Of our courts as wells never
thelesS clear and simple when you get
down to the roots Of it.
The ferryman of old under King
James, through regulation and control
Of the government, was compelled to
give Great Britain service for a fair
return on his labor and his property.
1t Is only In recent days that the direct
descendants Of the ferryman have in
hundreds Of cases found ways of paying
to themselves 1nOrdinate and unreason-
able profits and overcapitalizing their
equipment three, fve-yes, even 10
times the money which they them
selves have put into it.
7 am not going to confuse the issue
by setting forth lot of figures, but I
do ask you to remember few facts
which are so tremendously important in
our enthusiastic life.
Senator Norris, using the figures OF
the Federal Trade Commission, sum-
marizes this in a great speech in the
Senate of the United States two
months ago. He pointed out the over
capitalization Of many companies by
name in definite figures, and summed
up for discussion by setting forth In
round numbers these main companies
had been found to be overcapitalized to
the extent of $520,O00,0OO
This means, my friends, that the peo-
pie of the United States were called
upon to supply profits upon this amount
of watered stock. 1t meant that some
one was deriving profits from the capt.
talization into which they had put no
substantial capital. 1t meant that the
people had to pay these unjust profits
through higher rates.
As Senator Norris eloQuently pointed
it out on the floor of the Senate in
these words: Just try to comprehend
what that means. With the investiga-
ton only partly finished, the Federal
Trade Commission has disclosed write
ups (this means water) in round num-
bers to the amount Of s520,000, 900 upon
which the poor people-the common
people-must pay profit for all times
not for day, not for year, but,
unless some change Is made in public
authority 1t must be paid forever. ."
And Senator Norris added: LAS showed
yesterday in the beginning, all this in
vestigation would have been stopped II
President Hoover had his way. He Is
opposed to it ALL"
These were the deliberate, spoken
words of Senator Norris on the floor of
the United States Senate July IA, 1882,
a permanent record for the benefit OF
the American people, uncontroverted
and uncontrovertable.
Importance Of UtiIitiea
Let us consider for moment the
vast importance of the American utili-
ties in our economic life, and in this
am not including the railroads and
other transportation companies which
I have already discussed.
The utility industry in 1881 collected
over $4,000 100000 from the users of
electricity, gas, telephone and telegraph.
That means an average OF $133 from
each and every family IN the United
States
According to the figures Of the in
dustry itself, the American public has
invested nearly $23 10000 900 in pub
lie utilities, again excluding the rail-
roads. OF this sum, nearly $4,000, ,000,-
600 were invested in the electric light
and power industry alone during the five
years that preceded the stock market
collapse in 1929. Compare this, If you
will, with S11 600 900, 900 invested in
railroads, $4,000 000,0 900 in farm mort
cages and with the national debt Of the
United States itself. which was some
thing slightly less than this investment
in public utilities. You will readily see
that this "lusty younger child" Of the
United States needs to be kept very
closely under the watchfu1 eye Of its
parent-the people of the United States.
But these cold figures do not measure
the human Importance of the electric
power in present social order. Elec-
tricity is no longer a luxury; it is a def
mite necessity. It lights our homes, our
places of work and our streets; it turns
the wheels of most Of our transportation