Evening star., 1932-10-04
SMITH URGES
POWER REGULATION
Forum Speaker Declares
Gaps Should Be Bridged
In Present Set.up.

-
A call for better regulation Of the
power industry, to safeguard the public
and, the industry itself, was sounded
last night by George Otis Smith, chair
man of the Federal Power Commission,
in an address in the National Radio
Forum arranged by The Star ana
broadcast over the eoast-to-coast net
work of the National Broadcasting Co.
Discussing Americas Power Prob
lens" Dr. Smith said that the ad-
vances made by the power industry in
the past quarter OF century may well
be credited in large part to the inhu-
ence Of regulation
Should Bridge GAPS.
The need now, he said, Is to bridge
the gaps that exist in the regulatory
set-up.
He pointed out that in eight States,
most of which are in the Mississippi
Valley, there is no regulation OF power
utilities. Only half of all the States
have statutory authority over the issue
of power company securities, the speak
er continued, while in interstate trans
mission there is no control, the Federal
Government, which alone has the right
to step in, not having come into TINS
field
Holding companies also must be
brought, under control, DR.. Smith said,
adding that no one questions that the
investing public would welcome some
restraining influence over the issue Of
securities by holding companies; ex-
perience has demonstrated that wide
and dangerous gap exists there"
Text Of Address.
Theitext of DR.. Smiths address fol-
lows:
My interest in the engineering and
economics of the power industry Is not
a matter OF recent origin. 1t began
nearly AZ years ago for IN January, 1895.
! wrote UP for the local newspaper the
new electric light plant in my home
town. Some of you may need to be re-
minded that 1886 was an early date in
the history of the. electric power and
light business. I was then somewhat
young myself, but this business Of
making and selling electricity was truly
an infant industry, for the first central
station electric lighting plant had been
built in New York City only four years
earlier. While the business of supplying
electric current to all users began so
years ago, at the end of September. 1882.
ali users" meant just So customers with
] ,284 lamps ON the line.
The present-day power problems in
our country are primarily not those Of
discovering sources OF energy or OF in
venting methods. We have potential
pacity Is several times that Of the sites
we have developed and our fuel supplies
OF coal, oil and gas are SO distributed
as to make steam power available where
water power may be lacking-in fact
steam is lively competitor even In the
States that are best favored with the
Water-power sites.
Our power problems are rather those
consequent upon full utilization Of those
energy resources. Already we Americans
are using energy on magnificent scale,
a scale possible nowhere else in the
world Our problem, therefore, IS the
economic and social problem Of SO using
our power supply as to promote the
general welfare.
Power is labor's best friend. This
abundance of mechanical energy with
which to strengthen the arm of human
labor has made American industrial
supremacy q fact and it Is this SUM-
cheney in power that makes America s
future secure. AS never before, 1t Is a
commonplace of American Life that elec-
trically-driyen motors are the tireless
helpers OF men and women In perform
ing theirixiaily tasks. This conservation
of human energy may have introduced q
new problem into our social economy,
but no one really wishes to stop the
wheels by which civilization moves for
ward.
Mans command of energy is the
measure of his advance; but to this
truth We must; add that society's control
of such an indispensable service as this
we call power Is the criterion of ade-
quate government. 1t Is rank nonsense
to talk or even think of divorcing busi-
ness and government. The two have
lived together these many years and
their separation, would be the height Of
absurdity: the weight of evidence points
the other way, for today an even closer
union is demanded by economic condi-
tions-not less regulation of the power
business but better regulation In the
public interest.
Years Of Freedom.
In the last rs years we find that the
industry has grown to fully IL times
its size in 1907, whether measured by
toal plant investment, gross revenues, or
population served. It is only in this
later period that public regulation has
had much influence and it is against
this background of engineering progress
and corporate growth we must measure
the development Of public service COM
missions. True,, there has been some
lag, but where or when in human affairs
has not political action Jagged far be-
hind scientific discovery. mechanical in
vention and Industrial activity? 1t
seems to be habit Of human nature to
let private enterprises develop consider
able strength before seeking effective
means Of protecting the public against
any unwiSe use Of that initiative. At
any rate, the power utility was given
some years of freedom from interference
by public authorities. This respite for
the infant industry may have possessed
some beneficial elements, yet the fact
remains that thereby the infant public
service commissions started under a
handicap.
Even with this delayed start, public
regulation showed steady and consist
ent growth. The beginning made by the
pioneer agencies in Massachusetts,, New
York, Wisconsin and California were
made the model for other States in this
new line of governmental activity.
Principles have worked out In practice
and fairly complete system has been
set up for public control over rates,
services and security issues. Whoever
examines the record of these 25 years
and sees therein only failure and incom-
petence and even suspects widespread
graft needs to have his civic perspective
corrected and his faith in his fellow
citizens renewed by wider contacts and
broader outlooks. AS an observer of
State commissions during this period,
sympathetic with their efforts because
interested in the purpose Of their ac-
tivity, / believe that their success has
been notable Considering the newness
of the problem and the too frequent
lack of public support at all adequate
to the rapidly increasing compleXity OF
the task, I assert that State regulation
has not broken down. In thus com-
mending the record Of the State COM
missions speak advisedly, because from
experience, when say that regulation
in practice is far from being as simple