Evening star., 1932-08-04
Against High Electric Rates,
but Expects Fair Profit
to Be Made.
HITS FINANCING METHOD
OF SOME BIG CONCERNS
Publicity About Securities for Sale
Favored-Warns Firms to
Eschew Politics.

(Copyright 1892. by the Associated PressJ
ALBANY. N. Y, August 4.-Gov.
Franklin d. Roosevelt outlined infor-
mally today the broad general principles
which will serve as guide posts In form
ing his recommendations for the regula-
tions of the Nations public utility In
dustry.
The Democratic nominee for Presi-
dent, busily engaged in affairs of state
among them the delicate question of
deciding on the Mayor Walker custer
case-declined to be formally quoted,
but went into the utility question at
considerable length. He said he would
set forth specific recommendations in
a reasonably early campaign speech.
He remarked that his principles today
are unchanged from those which he has
New York State. Broadly, they may be
outlined as follows:
l. The Governor condemns as inde-
fensible the financing methods en-
ployed by some large utility holding
corporations which are now in finan-
cial difficulty, but he draws a sharp
distinction between those companies
which are, as he feels, soundly financed
and those Ehich create top-heavy cap
italization.
Public Statements Sought.
2. The Governor holds as a primary
principle the belief that all utility
companies whose securities are publicly
owned must be compelled to make pub
lie detailed statements as to their
earnings. their capitalizations and the
interrelationship of the holding
companies with the operating com,
panies. He contends that this general
rule should be made to apply to all
corporations which list their securi-
ties on public markets. Full publicity,
he insists, should be furnished in i'm
portant transactions of barter or trade
which have a vital public interest.
Horse trading, in his opinion might be
exempted, because it is SO firmly root
ed in American tradition, from this
general rule.
8. Gov. Roosevelt insists upon the
right of Government to own power sites
and to produce electric power, but does
not envisage public ownership OF all
utilities. He explains that such
thought, which has been reported fairly
widespread in Wall Street circles. is
Misrepresentation. The Governors po-
scribed as unchanged from his stand
in New York State goyernment-name-
ly, that the mere power Of the State
to produce electricity and to regulate
the profits which privately owned COM
panies might derive from the sale OF
this power at retail would serve to
forestall the temptation Of raising rates
unduly high.
Nom Political Role Advised.
f. He regards as a step in the right
direction the recently announced policy
Of the National Electric Light AsSocia-
tion to confne its activities solely to
the field OF statistics and to remove
itself from lobbying or propaganda. The
utility companies, in the Governors
opinion, would do well to keep religious
ly clear Of politics.
5. While the Governor is committed
to policy of stricter regulation OF the
utility industry, he feels that his party's
campaign will not impose hardships on
the soundly-directed companies, al
though it may direct considerable fire
upon those companies which, because
of financial transactions or allegations
Of excessive rates, have aroused protests
from consumers or investors.
6. A return of 7 to 8 per cent on its
investment is held by the Governor to
be a reasonable expectation by any
power company. Consequently, he holds
to the view that his program Of closer
regulation, by keeping this principle up
permost, will do nothing to disturb the
present high investment rating of the
higher grade public utility securities
which in recent years have replaced
railroad liens as an investment favorite.
Holding Company View Given.
While strongly attacking what he
holds Is abuse Of power, in the case OF
some holding companies, he considers
the holding company theory sound in
principle, although sometimes unsound
in actual operation. He contemplates
no attack upon the principle Of hold
ing company organization.
Gov Roosevelt indicated many in
quiries had been received from in
vestors in public utility securities, seek
ing light on the Democratic party's
stand. Broadly, this has been outlined
by the Governor as pledging first pro-
lection for the consumer of electricity
against high rates and at the same
time providing a reasonable return to
the utility companies for their service,
~