The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1946-04-05
BY ROGER w. BABSON

NEW YORK CITY, April Al dis
like to see any more electric utili-
ties taken over by the public at the
present time The utilities did well
during the War and are now enti-
tied to show what they can do in
times of peace. Therefore, I wish
it strictly understood that this
weeks column is not an appeal for
public ownership. Yet, I do believe
that investors in public utilities are
entitled to know the truth.
Up to now. public utilities have
been regulated only by municipal
authorities and state commissions
who have understood local needs
and conditions. In most cases they
have been fair to the public, to the
employees, and to the shareholders.
Recently, however, the Federal
Powers Commission has come into
the picture in most threatening
manner. The original idea was for
this Commission to function only in
connection with interstate prob
lens, but current interpretations
of the law enable it to interfere
with most all electric utilities.
Slow Death
The Federal Power Commission
is not content to render decisions
based upon precedent. Shooting is
not the only method Of killing a
man. A slow death may be brought
about by starvation, by abuse, or
even by fear. The utilities claim
that the Federal Power Commission
is using this latter method to bring
about public ownership through
u n f a propaganda and an
attempt to ruin the reputation of
utility executives, Whether we like
it or not, tais program is destined
to bring about government owner
ship of the utilities. This will prob
ably be through large Federal
Authorities, with the country divid-
ed into districts corresponding with
the Federal Reserve Boards.
A Federal Power Commission's
formula demands that all deprecia-
ton charges, in excess of the cost
OF replac dement's and statutory div
idends, shall be deducted from the
appraisal price when and if the
property is taken over by the pub
lie. This means that the public is
already engaged in buying these
properties Oh the installment plan!
Three Charges
The Commission claims that a
utility has only three legitimate
charges: Operating expenses
including taxes and interest on the
debt; (2) Depre ciation-which the
Commission recognizes only as a
reimburse for facilities actu-
ally withdrawn from service and
only enough to make good any actu-
al wastage of capital''; and 90 Div
idends-equivalent to an accept
ed allowable rate of interest on the
met property value" which words
Immediately bring up many con-
flicting views.
The Federal Power Commission
can show the public that rates for
electricity can be very much less
under public control. This, OF
course, is possible owing to the
fact that the government can bor-
row money much more cheaply
than a private utility; also to the
fact that a publicly owned utility
need pay no federal income taxes.
it can be seen that they are great
factor. Of course this merely means
that the government must collect
this money from other taxpayers
if the utilities are exempt from
taxation. But this point is soft
pedaled by those who advocate
public ownership.
Rate Reduction
The Federal Power Commission
can show the people of community