The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-29
Trends
Utility Bill Fight
Apparently Just
Beginning.
p o
Times Financial Editor

Tines ftnaneial toitof
DYRRHUS, King Of Epirus. after
Il his defeat Of the Romans at
Asculum in the year PIG B c.. ex-
claimed: "One more such victory
over the Romans. and We are ut
terly undone.' Motivation for the
utterance was the fact that the
cost of the victory was terrihcally
heavy.
The public utility industry may
prove to have gained a Pyrrhic
victory when the House defeated
the "death-sentence" clause in the
p lding public utility holding COM
pany bill. Each day. as new dis
closures are made at the iooOy in
vestigatiOns in Washington, the
conviction grows that the initial
skirmish was merely an exhibition
match and that the real fight on
the question is in the making.
Over-zealous opponents Of The
measure. in their keen desire to
repulse the provisions OF the bill.
stopped to tactics generally re-
garded as unfair. Paying bOunties
for signatures to kilograms pro-
testing the bill, use of adOlescents
to explain the many ramifcations
of the 'death-sentence" clause and
resurrection Of the dead so that
they too could speak all were
equally ridiculous manifestations of
the desperate state of mind of some
utility interests.
THE House already has begun to
i react to the white light of pub
licity that has been focused on the
industry by the lobby probe. Rep
resentatives who had voted against
the "death-sentence" clause have
been upset by the revelations of
the last 10 days. An unofficial poll
has disclosed than IS members sig
nifed their intention of switching
their against" to for" The orig
inal vote showed the clause defeat
ed by 70 votes. Thus, on the basis
of the poll, the opponents and pro-
pOnentS now are about even.
Just how numerous the prose-
lvteS will be when the bill comes
up again for a vote is difficult TO
forecast at this stage. The lower
branch of Congress pays o at
tentiOn to the back home" pres
sure than does the Senate. But
now that it has been revealed that
many of the constituents who
urged a negative vote can't vote
for them anyway. the pressure will
have considerably less effect on
them.
President Roosevelt remains ada
mant for the elimination of unnec-
essary holding companies. Public
utility companies, at the same
time. still are opposed to the meas
ure. In the middle stands the
House-the Senate approved the
death sentence" by the scant a
gin of one vote-with the ultimate
power of deciding whether the
President or the public utility in
terests come out on top.
n n n
II ETENTION of the death
N sentence" clause. if that is the
final outcome. may prove to be a
doubly-bad dose should stock
holders of utility companies rear
up and protest the large sums of
money which were spent fighting
the battle. The Associated Gas
and Electric System heads the list
of SpenderS, according to Congress
Sional records, with an outlay OF
500, 900. Undoubtedly a large pro-
portion of this was to carry on its
advertising campaign.
Much of the supposed opposition
of investors to the proposed bill
doesn't ring true. Securities Of
operating public utility companies
have been relatively more popular
with investors than have the secur-
tiles of holding companies. And.
after all. the reason for this is not
difficult to find. Operating COM
panieS receive their earnings from
the sale of power. Holding COM
panieS get their earnings from the
residue of the series of operating
companies in the system; albeit the
residue often times is large through
slick accounting procedure.
Owners of public utility common
stocks should not, and a not, ex-
pect the same high rates of return
which accrue to holders of other
securities. The companies enjoy a
monopoly up to a certain point and
the state regulatory commissions
allow them to charge such rates as
will give them a fair return on their
investment. MaXimums are thus
set out and the investor is con-
fronted with this situation before
he makes his commitment.