Evening star., 1941-07-18

, %6&
the real respon- David Lawrence.
sibility for the tragic situation in
which the electric power industry
finds itself today as consequence
of a blunder in judgment made by
President Roosevelt, aided and
abetted by some of the very men
who conferred with him on Wednes-
day. namely, Secretary Ickes, Sena-
tor Norris of Nebraska. Ben Cohen
and the other advocates of public
ownership, who have Influenced the
President for the last several years
10 haraSS and smother the pri-
vately owned public utilities.
The death sentence law which
has kept the executives of holding
companies busily occupied for 18
months now in almost daily con-
ferences at the S. E. C. instead of
tending TO their jobs. has had the
effect Of stunting the growth of
electric power in America by pre-
venting financing for needed ex-
pansion over a period of seven years.
The present shortage of electric
power was foreseen as far back as
August, 1887, in a memorandum sub
mitted to the President by the Fed
eral Reserve Board. but not made
public. This correspondent read
copy of it at that time and when
in September, 1888. the President
began to express fears of an electric
power shortage in the event of war
there was republiShed in these COL
umns extracts from that document.
Because Secretary IckeS, with the
apparent approval of the President,
has taken upon himself the task of
sColding American industry for fail
ing to build up its facilities for war
even before the Government indi-
rates its military needs. it is in the
public interest to place on record
again the fateful words of the
document which Conyicts the pres
ent administration of colossal neg
lect of one of Americas most i'm
portant defense requirements. even |
though fully warned thereof in ex-
picit words Says the Federal Re
serve Board memorandum:
Two Years to EQUIP Plant.
1T takes ordinarily about two
years to plan and equip a modern
steam generating plant and three
years more to develop new hydro
electric stations. Apart from some
large Federal hydroelectric projects,
there are at present comparatively |
few important new central stations /
under construction. and If the ex-
pansion of generating capacity had .
to await the planning and COM |
pletion of such stations. an acute |
power shortage would inevitably en-
sue before they could be brought |
into production ..
Because of the lack of confidence |
on the part of utility arrangements,
the industry has been living on !
day-by-day. hand-to-mouth basis. /
Capital outlays have been put of ,
until the last possible moment, If not
indeed until too late. Witness the
fact that less than half the new |
capacity will be brought in for 1887 |
than the expansion output during |
the year calls for. Capital eXpend-
itures for the year promise to be |
only about 100000 900 as compared |
with S600,000,000 to 100000 900 esti-
mated to be needed as an average
for 1887 to 194l
This slow start in the process
Of plant expansion means that ex-
penditureS will have to average cor
respondingly higher during the re-
naming four years of the period if
the 1897 capacity-uSe factor is TO be
maintained. Whether the requisite |
capacity to maintain the 1887 ca
pacity-use factor will be forthcom
ing-and its approximate main
tenance may be regarded as a con-
dition for the avoidance of power .
shortages-will depend in part on
the political and financial position
Of the power companies in general.
Prom the political standpoint.
their recent experiences have not |
been happy. what with the threat of .
direct competition from existing and /
projected Federal hydrOelectrlc de-
velopmentS-nOt 10 mention mu-
ncipal enterprises financed by Fed
eral aid-as well as adverse public
ity. higher taxes, the holding COM
pany' law and steady downward |
pressure on rates. Political hazards |
have doubtless been exaggerated. but .
1t cannot be gainsaid that they have !
caused great deal of jittery Senti-
ment among utility arrangements
and a disposition to avoid unneces-
sary commitments, a disposition |
which still obtains. There seems !
little prospect that this situation
will be altered in the near future"
What happened to this report?