Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1935-01-03
10, THE POOR UTILITIES!
(The Nation !


their history they have only their own
stupidity to thank. Accustomed for
years to assess charges without any
genuine regard for costs, they sought
callously to transfer the city's 3 per
cent tax for unemployment relief to
the consumer by Z to 8 per cent
increase in rates. In this they were
blocked by the Public Service Com
mission on the ground that the pre-
vailing rates were already excessive.
Doubtless the utilities were prepared
for at least a delay, but what they
apparently had not counted on was the
city's reaction to their effort to attach
surcharge of "A to 60 per cent
on the existing rates for current pur-
chased by the municipality. 1t must
have been a shock to them when Com
missioner Davidson rejected their bids
with a pointed reminder that existing
charges were already from 81 to 68
per cent above the rates for compar-
able service elsewhere in the coun-
try, and still more disturbing when
Mayor LaGuardia departed for Wash
ington and returned within twenty
four hours with a definite promise
that the PWA would advance suf-
ficient funds for the construction of Il
municipal power plant to supply city
and federal needs. 1t is even limited
that the new plant might offer current
to the public at rates substantially
lower than those now charged,
And as If these troubles were not
enough, the state legislative commit
tee investigating utilities chose this
moment to open hearings in New
York. Evidence was presented show
ing that various companies had wa
tered their assets to justify existing
rates, and that the industry had main
tanned close connection with both the
Republican and Democratic organiza-
ton. Most interesting, however, was
the proposal to establish municipal
plants in certain cities as yardstick
by which fair rates might be deter
mined. Considerable success was re-
ported where this scheme had been
tried. In Cleveland, for example, the
private company. after years of fight
ing, had won the right to charge ten
cents a kilowatt hour, but when
obliged to compete with current from
the municipal plant at 3 cents kilo-
watt hour. it hastily reduced its rates
to cents. Threatened with wide
spread adoption of "yardstick" plants,
several Of the upstate companies have
already indicated willingness to
make moderate reductions.
The extent to which the utilities
are really frightened by the recent
turn Of events is illustrated by the
almost hysterical letter which Thomas
N. McCarter, president Of the Edison
Electric Institute, recently addressed
to President Roosevelt. Mr.. McCarter
spoke touchingly of the multitude of
investors who see their life savings
in jeopardy" He sought to defend
the prevailing rates On the ground
that they have been scientifically
determined and that their burden.
after all. is slight in comparison with
the amount which persons normally
spend for food. clothing, and other
necessities. Even the cost of oper-
ating our national. state, and local
governments, he continued, as re-
Elected by the burden OF taxation on
the individual is nearly ten times
the amount of the electrical item in
the budget" Having thus drawn up
a clean bill of health for the much
abused utilities, he besought the Pres
ident to cooperate with them by re-
questing prompt action by the Su-
preme court in testing the Legality Of
iva legislation. In reply to Mr.. Nc
Carter's plea, Frank R. McNinch,
chairman of the Federal Power Com
mission, pointed out that while it is
true that the average electric bill in
this country Is less than 50 a month,
the Canadian consumer pays only
1924 and obtains twice as much cleo
tricity. He also reminded Mr.. Nc
Carter that more than half of the Can
adam power is generated in publicly
owned plants.
In an attempt to defend the posi-
tion of the utilities, Frank w. Smith.
president of the New York Edison
Company, in a speech which was re-
printed as a half-page advertisement