Evening star., 1933-10-02
SLUMP IN UTILITY
ISSUES HELD VITAL
Recent Sudden Changes in
Big Industry Reviewed
by Magazine.
Special Dispatch to The Star.

NEW YORK. october q Under
the title "Scuttling Ten Million Inves-
tors" the Financial Word in its issue
of October reviews the position OF the
public utility industry under the pres
ent national administration and de-
clares that the great American paradox
today is a Government spending bill
lions of dollars fer the rehabilitation of
the economic structure while attacking
with tong and hammer supporting
pillar of that ediflce.'
Whether the motivating forces be-
hind this program be punitive or sin
cere conviction that private control
must go. the results are the same" says
this national investment publication.
The policy is a direct threat to prl-
vate capital invested in the utility busi-
ness. Demand for utility services is on
the mend The time may not be far
distant when additional facilities will
be required to care for the increased
load.
In 1880, the electric power and light
industry alone spent $500 100000 for
additions and extensions. If the indus
try's credit is to be destroyed, how will
additions and extensions of the future
be financed? If the Governments ultl-
mate goal is public ownership Of this
business. and present policies are con-
tinued until this objective is reached,
what safeguards are to be erected in
the interests of consumers during the
interim? Though it is doubtful that
the great mass of citizens desire that
their Government should venture into
commercial enterprise on so vast a
scale. no alternative will remain if the
present course is followed to the end.
Presidents Views Quoted.
president Roosevelt has stated in
uneuuivocal terms that development Of
this business should remain in the
hands of private interests. Regardless
of recent developments we do not be-
lieve he has veered from his original
course, but the situation needs to be
cleared up and public interest can best
be served at the present time by
frank reassertion of fundamental
policies"
The publication goes on to point out
that securities of the public utility in
dustry are owned by upwards OF TO-
100000 citizens, and that close to 10
per cent of the total assets OF our life
insurance companies represent public
utility securities. In addition, stocks
and bonds of companies in this field
are held in substantial amounts by nos.
pitals, colleges and in endowment and
trust funds Approximately l,000,0o0
people are employed by this industry,
and its annual pay roll exceeds $780,
100000. The publication then says: =.
Early in the year Congress passed
a bankruptcy act which extended aid
to the railroads, farmers and individuals
but deftly passed the utilities by. In
framing the act which created the
R. F. c. no provision was made Tor
financial aid to the utilities. Congress
passed the Muscle Shoals bill which
authorizes the Government, among
other things, to construct transmits
sion lines in direct competition with
existing private facilities. The 3 per
cent, tax ON the sale of electricity was
shifted from consumer to producer on
September while municipality owned
end operated plants were specifically
exempt.
Utility Rate Trend Downward
1T is indicated that Federal funds
are to be made available to municipal
tiles for the construction Of their own
power plants. A few days ago wholly
premature announcement was made OF
rate schedules to prevail at the Muscle
Shoals area. Regardless OF the purpose
of this announcement, 1t had the eject
of squirting agitation for lower electric
rates in many sections Of the country,
and brought about q further serious
decline in market prices of utility Sc
curities In this connection, and con-
trary to what the politicians would
AVE the public believe, utility rates