The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-18
Trends
n. Y. Court Takes
2 Slaps at Utility
Interests.
BY VINCENT LYONS,
IImes Financial Editor

Public Service Commissions.
public utility companies. and the
stockholders Of the latter, we're
handed down recently by the Court
Of Appeals Of New York. the high
est tribunal in the state. IN the
rush Of other news. however. the
story did not receive its due.
The Court Of Appeals upheld the
constitiOnality of %. a law requir-
ing public utilities to bear the cost
Of inquiries into their rates. and %
a law permitting New York City 10
impose a tax of ~ per cent on
gross monthly incomes Of public
utility companies operating in the
city. Thus, in a single day were
the public utility interests Of the
state plastered with two singing
blows.
A revolving fund Of 100000 had
been provided by the 1884 Legisla-
ture for rate investigations by the
Public Service Commission. Re
Endorsements were to be made via
levies against the utilities investi-
gated. This action got the utili-
ties into a tantrum and thev re
fused TO paw the freight on such
rate expeditions.
A s a natural result the squabble
~ was brought into the courts
with the Bronx Gas and Electric
co. bringing forward the case. The
Appellate division had upheld the
utility. Pending final adjudication
Of the case by the Court of Appeals,
Gov. Lehman's recommendation for
a similar 100000 fund was ap-
proved by the militant Legislature
this year.
The decision was indeed a de-
pressing one for the utilities. A
rate investigation involves COnsid-
cradle time and effort with the re-
suit that the cost is burdenSome.
In many instances the Public Serv-
ice Commission and the utility are
each called upon 10 contribute TO
the cost of such probes. Thus. the
taxpayers and the stockholders OF
the utility are brought into the
picture.
With this situation in mind 1t
can been seen that at some time
or other when the TREASURY OF
state might be in need of rehabll-
tation. the Public Service Commits
sion. as matter of political eX-
pediency. could decide TO postpone
a promising rate investigation so
as not to make any further de-
mands for funds and thus add to
the woe of the administration.
IN connection with the UNFOLDING
i of the New York City tax OF
IL per cent on gross monthly in
comes Of utility companies, the de-
cision is of particular import to
Illinois. The latter state, recently
enacted a 3 per cent sales tax and
the Illinois Commerce Commission
followed up this action by ruling
that the public utilities could not
arbitrarily add this levy to the bills
of consumers. The commission did
state. however, that where the tax
would be found cOnfiscatory the
impost could be passed on.
A modicum of sOlace was left for
the utility interests in one SEN
tence of the New York courts pre-
vailing opinion which declared that
broad and unprecedented as is the
license so conferred, We are with
out jurisdiction to circurnscribe or
modify it Just what they VIII
make Of this aperture can easily
be imagined in this era of contest
ing all legislation.
New York State has taken the
lead in many reforms of public
utility practices. Action taken
there affords a good test as some
of the largest enterprises in the
country operate within the con-
fines of the state. Whether the de-
cisions of the Court of Appeals will
inspire lawmakers in other states
to draft measures similar to those
upheld can stimulate conversation
over the next few months.