Evening star., 1934-07-29
Ability of Distributing Firms
to Maintain Profits Is
Questioned.
TAX DRIVE STARTED
BY PRIVATE COMPANIES
Number of Firms Using Newspa-
per Advertising to Tell Public
of Increased Burden.
BY J. G.. DONLEY.
Special Dispatch to TIE Star.

Special Dispatch to TIE Star.
NEW YORK, July 2s.-Governmerit
competition and taxes are twin wor-
ries Of public utility operators. But
the outlook for either, or both, might
be worse.
Speaking Of Government competi-
ton, the T. v. A. is on everybody's
tongue. But the owner of utility Sc
curities, unless he has delved into the
subject, hardly realizes that the same
sort of IT, is going on in numer-
Gus plr 1mbined with food con-
troll, n, navigation and such
proJectl is competition is just get
ting unoe Wiy, but 1t has every indi-
cation of becoming something with
which the entire industry must
reckon.
T. v. A. operations are cutting do
mestic consumers electric bills by one
half or two-thirds. That Is fine, II
the municipality operated distributing
companies to which power is whole
sailed by the T. v. A. are able to do it
and still earn sufficient net revenue
to maintain their lines and plants as
going concerns. Practical operating
men have doubted this from the start.
Already there is evidence that they
may be right in their contention that
the only way such low rates can be
made economically workable is to sell
q lot of electric current. This boils
down to the practical utility method
of selling a lot Of appliances that
consume current.
Sales Competition Fails.
Utility men who have been keeping
tabs on T. v. A. have some interest
is said that in a certain town of 1000
population down In Mississippi the
municipal distributing company de-
cided that to make the low rate pay
out it would have to induce the home
folks to use electric cooking ranges
and electric water heaters. Through
the E. r. II. A. (which, If you haven't
heard of it, stands for the Electric
and Farm Home Authority, set up
to provide long-term credits for people
purchasing appliances, they had al
ready sold electric refrigerators for as
little as $40. Selling electric ranges
didn't seem impossible, with Govern
ment aid. So a band was engaged
and things we're whooped up In a big
meeting, after which 19 statesmen set
out to canvass the town.
But something happened to upset
calculations. The local natural gas
company wasn't going to be licked
without a fight. There were people
in that community who had never
had anything better than a slab-wood
stove to cook on. And it would take
something lower than 1-cent electric
power to underbid natural gas for the
cooking concession. So the gas COM
drive for culinary modernity.
At the end of one week the sales
score was no ranges and no water
heaters for the municipal electric COM
pany. But the gas company chalked'
up 26 gas ranges and IA gas water
heaters sold.
Has Broad Significance.
That score has broad significance.
1t means that the utility industry is
keenly alive to competition and ready
to meet it at the drop of the hat.
Further, it indicates that when Gov
ernment goes into competitive indus
try, it has to fight for survival-like
anybody else.
In the matter of taxation, the fl-
ture as to State levieS is in the hands
Of the various Legislatures. One mans
guess it as good as another's. But
number of companies are beginning to
use newspaper advertising to acceler-
ate the growing sentiment against in
creasing taxation. They don't know
what effect this will have, but they
believe it will make for mutual under
standing of problems between conSum-
ers and producers.
Some well-informed utility men who
have had ears to the ground in Wash
ington feel that the limit in Federal
taxation has been reached in the pres
ent 3 per cent tax on domestic and
commercial sales of electricity. Theo-
retically, this tax has not been passed
on to the consumer, but since it is an
element of costs the consumer pays
it to all intents and purposes.
(Copyright, 1934)