The Daily Alaska empire., 1945-06-19
Speaking of Yardsticks
Cincinnati Enquirer

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 In the last dozen years-the supposed twilight era of free enterprise-we have heard much about yard sticks to measure the fangs of private initiative as compared with governmental undertakings. Perhaps the most celebrated of these yardsticks is the Tennessee Valley Authority, that vast electric power domain established with money from the Fed eral Treasury to prove-along with other things of course-that the public utility industry war over charging users of electricity
 It has proved no such thing In any economic balance sheet weighing IVA against privately owned public utilities, enc promptly is submerged in morass of bookkeeping which has no real economic foundation. If the comparison proves anything it proves only that agency of government, with un- limited access the public purse and unhampered by obligations with which government saddles free enterprise, can manufacture power cheaper than a privately owned public utity-but then only if the bookkeeping is taken at face value
 Railway Age, replying to a eulogy of IVA pub lished in the weekly paper of the railway unions, did an extremely effective job of debunking IVA bookkeeping
 IVA makes pretense oI paying taxes. We say "pretense" only because as Railway Age points out the Authority last year paid 6 cent of its gross in lieu of taxes" The figure was 268 799 Meanwhile the privately owned electric power in- dstry taxed at approximately 238 cent of it's gross revenues. In other words applying the private enterprise "yardstck' against IVA we find that it fell short by s6,2634 434 of paying the taxes 1t would have paid had it been privately owned.
 IVA last year charged s621579 to interest" Its total assets meanwhile listed at $763 809 Any privately owned utility has to pay interest on the money it uses-and so does the government. Although the government enjoys an extremely low rate, the fact remains that the great investment in IVA costs money If it was not money invested in the Author ity, it could have been money applied against the Federal debt with corresponding reduction of the amount which the taxpayers must pay interest annually. Thus even if we figure interest rate Of only per cent against the IVA investment find that the Authority is overlooking the neat sum of $14651 757 in it's allowance for interest capital lused.s-.es.s. ssessy5s
 These two items alone-taXes not paid and interest not pad-total $20915191. And that is three times the amount of net income reported by IVA last year
 In other words had the Authority attempted to do business last year it's present rate schedule without the benefit of this bookkeeping evasion it would S4 562 which the taxpayers of the entire nation would have been forced to make up
 contribution to the people of the limited served by IVA. Or, conversely, had TWAS rates been in- creased to the item which private enterprise must include in it's rate structure, charges to of electric power would have been stepped up 43 per cent
 It's quite revelation, in other words, when you start to measure the yardstick" of sociazed enter prise against the rigid accurate yardsck of orthodox economic practice The result is not to make the private utility industry look bad but to make it look better.