Evening star., 1934-12-05
POWER INDUSTRY
HANDICAP CITED
Figures Cannot Be Made
Comparative With Those
of Federal Plants.
BY DAVID LAWRENCE.

American people annually Tor elec-
tricity for home use could be saved
to the consumer by the private utility
companies if they could be permitted
to use the same yardstick which the
Federal Government now is applying
to its own and to municipal projects.
This statement has been derived
from a study of the latest figures
available as to the cost OF electricity
to residential consumers and the
elimination of items of cost such as
the Tennessee Valley Authority and
municipal owned plants can enjoy.
Thus the total electric light bill for
residences amounts to S662 000,0
year.
Interest Saving Seen.
Electric light and power companies
pay S270,000,000 for taxes and they
would save S200,000.000 on interest
charges if permitted to borrow at the
same interest rates as the Federal
Government borrows money. This is
a total of S470.000,OO0 that would be
saved, provided taxes were repealed
by Federal, State and city govern
ments. Then there's an item of
about S30000.000 for insurance which
Federal projects do not carry.
So approximately S500,000000 out
OF the 1852 100000 could be saved by
giving the private companies the same
advantages as the T. V. A. now en-
joys. In this no allowance has been
made for the one-third discount given
the Government agencies in carrying
freight, which means coal and other
items used in construction.
The latest data show that the entire
power and light bill. which includes
industrial use, is now about 81 80o,-
100000 But the residential bill is
agitation and demand for Govern
ment ownership or aid to municipali-
ties. This bill of $662 100000 year
compares with more than 10 times
that sum now paid for food, six times
that amount now paid for rents and
about six times that same electric
light bill now paid for clothing.
The Federal Government, therefore
has been concerning itself with the
smallest item in the household budget
and with the future of an industry
which as late as 1880, spent more for
construction and extension than did
the entire P w A. last year.
Recognized Fact.
1t is a recognized fact, admitted by
Government agencies nowadays. that
unemployment is most severe in the
so-called heavy industries-the min
ing of metals and fuel, the fabrication
of metal products and the building of
machinery.
The electric light industry has been
compelled by reason Of the growth of
American population to erect new
plants and extend existing facilities
During the 10-year period from 1922
to 1882, the electric utilities spent
more on physical plant than did all
the railroads and more than all the
sums that were spent on canals and
roads. 1t was total of 81 500, 600, 900.
Some idea of the decline can be
ascertained from the fact that in 1890
more than $9l9,000,0 900 was spent for
new construction and repairs but this
sum has come down to less than $780,
100000 in 1884. During 1888 it was
only s120,000,000, which shows that
construction in the utility industry
has been at a standstill for two years.
If the Government is to take over
the utilities huge sums Of money must
be set aside for new construction and
extensions. If the private companies
are to be permitted to operate they
will have to borrow large sums. The
financing side of the utilities has
come under the most devastating
criticism. Today, however, the Sc
curities Exchange Control Commission
Is regulating the issue of new secllri-
ties. The biggest problem before the
private utilities is the attitude of in
vestors toward their projects.
Since the Government has been en-
tering into competition with private
utilities and encouraging municipali-
ties to compete, the holders Of securi-
ties have been wondering what effect
this would have on the value of their
holdings and it would be doubtful
even if the strict regulations Of the
securities act did not prevent new
financing, whether the private COM
panies could go ahead and build ex-
tensions without some clear explana-
ton of how far the Federal Gov
eminent intends to go into the utility
business.
Interviews Promised.
Several prominent utility executives,
including Thomas N. McCarter of the
Edison Electric Institute and President
Willkie Of the Commonwealth South
ern Co., which operates in Alabama,
have sought, and it is understood have
been promised, interviews with Presi-
dent Roosevelt for the near future.
1t is believed that these men will
endeavor to get Qualification of
policy which will enable them to
formulate construction programs.
AS matters stand today the heavier
industries could re-employ most of the
people out Of work today if stimulus
could be given by the Federal Gov
ernment. Out of the 100000 un-
employed it has been asserted by
reliable statisticians that 9,50O,OOo
come from the heavy industries.
Nobody has figured out how many of
these unemployed have been affected
by the decline of construction in the
electric light and power industry, but
the amazing decline in sums spent for
construction by the utilities is consid-
cred significant indication.
II the utilities were to spend close
to $1,000, 100000 year again, not only
would many millions Of persons be
employed but it is believed that cleo
trio light rates would be further re-
duced. Forward-looking men in the
utility industry concede that If they
could furnish more electricity to more
people they could reduce rates consid-