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Show Friday. Octobq a . UTAH VALLEY NEWS THE MILLION DOLLAR RACKET THIRTY-FOU- R The Public Service Commission of Utah activities of Ruthless exploitive and aroused nation to a the and trust utility magnates power (Continued from preceding page) in on the of period beginindignation bordering fury Power k Light Company has paid in cash to Electric Power pitch about 1910. Insistent demand for outright public ning k Light Corporation as dividends on common (watered) ownership or strict regulation became almost universal stock a sum approximating seven million dollars. Virtually all of the states adopted the theory of regulation Equally vicious as payment of dividends on watered as better suited to the public interest. stock has been the payment of fees by Utah Tower k Faced with the alternative of having to accept regulaLight Company to its affiliates. During the period ending tion or of having to leave the utility field altogether, the December 31, 1930, covered by the Government investigautility barons pretended to be satisfied with regulation, tion, the Utah Power k Light Company paid the following: despite their feelings that nature had intended power magnates to be a law unto themselves. (We quote from the Government report) Thereafter they Bet about messing up regulation and Construction fees paid to Phoenix Conits effectiveness. Their plans contemplated a minimizing account struction Co. and charged to fixed capital program of fostering appointment of ultraconservative of Utah Power k Light Company amounted to $780,766.16. utility commissioners wherever possible, who could be deElectric Bond to fees k paid Engineering pended upon to be discreetly hostile toward any regulation Share Company and charged to fixed capital whatsoever of utilities. Needless to say those plans have account of Utah Power k Light Company amountsucceeded throughout the nation to such an extent as to ed to $316,211.96. nullify, rather effectively, the desire of the people for Electric to service fees and paid Supervision rigid control in the public interest. Bond k Share Company and charged to operating Utah enacted its utility law in 1917 when political expenses by Utah Power k Light Company accidents resulted in the election of a fairly progressive amounted to $1,736,913.20. legislature. At first the utility interests made a show of Fees paid to Electric Bond & Share Company opposition to the passage of the act Astute observers of for Issuing obligations and charged to bond disthat period still insist that the utility stand was a simulacount and expense, or organization expense acted one, designed to throw opponents off the track. accounts, which were dosed out to fixed capital At rate a law was enacted that at least made a to any amounted count, $140,137.68." start toward the goal of effective control of utilities. It Since the Federal investigation closed December 31, gave the supervisory commission fairly comprehensive 1930, the Utah Power k Light Company has continued to authority to regulate rates, but did not extend that authorpay fees to Electric Bond k Share. Tbe amounts so paid ity to supervision of capital structure or operating exare kept as remote as possible from the public view and penses to any workable degree. actual figures, so far as we are concerned here, are unFor example, in the absence of strict regulation of available. That such fees have a highly important bearing capital structure, the Utah Power k Light Company was on the basis for rate schedules is beyond dispute. enabled to add to its bonafide investment more than thirty Utah regulatory authority is understood to have placed millions of water in its fixed capitalization, thus virtually a limit the last year or two on such fees, holding a maxi- doubling the reasonable amount on which it was entitled to base its rates. Therefore in the absence of statutory mum of $100,000 jer annum as the limit it will consider as valid expense in fixing rate schedules. That limitation restrictions, the power company was permitted to collect in itself is an indication that in former years at least the excessive rates and pay about seven million dollars of divibleeding of the local company by Electric Bond k Share dends on the water in its common stock. Instead of seeking some interpretation of law or suphas been unwarranted and excessive. Critics assert that there is no good reason for payment of any supervisory plementary legislation that would save the people of Utah from such terrific losses, the Utilities Commission sat fees at all and very little reason, in the absence of extensive construction, for engineering fees. They charge that around twiddling its thumbs while consumer millions the extraction of fees" by Electric Bond k Share from found their way to No. 71 Broadway, New York City. As stated above, lobbyists for utilities fought to preUtah Power k Light is merely an enforced substitute for vent passage of the utilities act, whether in good faith unwarranted dividends, all of which intermountain concannot now be determined. However at the next session sumers are compelled to pay. of the two years later, after progressives disIt will be seen that if we add to the approximate total coveredlegislature, had been jobbed in the administration of the they of dividends on common stack, a portion of the unconscionand had demanded outright repeal or drastic amendable fees, charges and other exactions taken by Electric law, ment of the act, the same lobbyists appeared before the Bond & Share overlords, on more or less flimsy pretexts, same committees of the legislature and stood out vigorously we find that the aggregate sum would have been ample to against either amendment or repeal have built an interconnected municipal system for Tgan, of the law Ogden, Salt Lake City, Provo and intermediate cities, Undoubtedly the almost two much do to the had the dewith service first most of the years modern during giving type, with plants fully mand for repeal or amendment. The commission appointed paid for by now and therefore operating at low cost. The In other words the consumers of electric current here- - by the governor proved itself to be a model of in were bold commissioners that totally aggressive lacking about have paid into the coffers of Electric Bond k Share leadership so essential to successful inauguration of new Company and its affiliates, over and above every reasonable charge, including operating, engineering, taxes, and public policies. A commission with a modicum of vision, interest indeed, including every legitimate charge what- and with any regard for the wishes and rights of consumers could have evolved an effective program in the soever more than enough cash to have placed in operafirst year, or failing in that, could have requested adequate tion fully equipped plants of their own. , powers from the legislature so that by the third year the Regardless then, of representations by the power comutilities could have been brought under proper control. As pany that its rates are low, and that operations by municimatters stand more than two decades after enactment of pal plants on the same plane of efficiency would lose large the law and faltering steps have only a few amounts of tax money to the taxing units of the state, it been taken in the unimportant positive direction of preserving the is dear that the company is collecting enough to pay those the people. rights of taxes, etc., and still contribute large sums to absentee The utilities find the commission a most obliging and .owners at 71 Broadway, New York. wonderful institution. When they need an alibi they use If consumers are obliged to pay rates that cover Utah the commission. If they are reluctant to improve service Power k Light taxes, what difference does it make if they or reduce rates they trot out the commission as the inpay those taxes directly to the taxing units themselves? superable barrier to the proposed change. Undoubtedly it would cost much less to pay taxes directly On the other hand, if they decide to force some utility than to employ Utah Power k Light Company to collect castor oil down unwilling throats of consumers they signal them. The lax argument advanced by the power company to the commission to hold the victim while they pour in (and likewise, on) the oil. is childish. The people pay the taxes anyhow, and in the Had the commission been at all responsive to the needs same amount, regardless of who is the collector. In fact collections made are when of the taxes heavier public, needs clearly in line with the purpose back indirectly they pay of enactment of the law, it could have earned for itself or by third parties. popular confidence and esteem now so conspicuous by its Naturally Utah Power k Light Company and Electric Bond & Share want to perpetuate a source of revenue absence. It would appear that if a legislature cannot be elected so attractive as Utah and the intermountain area and apwill amend the utilities act to make it so airtight that to maintain that to will their posilength any go parently they rigid control of every element entering into the making of tion. rates will be mandatory, that the people will have no reThe late Mr. William Jennings Bryan must have visualized the power situation in Utah when he defined the word course but to resort to public ownership. conservative in an address in the old Salt Lake Theater Municipal plants are entirely free from PSCU and are in 1924. Mr. Bryan said: subject only to local control, not far removed from direct vote of the people. Consequently more flexibility is possible and local needs can be met by citizens acquainted with A conservative is one who has his hand in the other fellows pocket and doesn't want to be and in sympathy with those needs. Moreover, elected ofdisturbed. The world is bright enough. There is ficials may be retired by the electorate. Utility commisno reason for any change. sioners in Utah have been known to hang onto office for Electric Bond and Share and its underlings are con- years after any usefulness to the public had ended. A continued policy of indifference by the commission is a matter servatives in the Bryan sense of the word. They want no of less consequence, when jurisdiction of municipal plants change. They see no reason why their hands should be is retained by the community. forced out of the pockets of Utah consumers. So far the people of Utah have tolerated the Electric TIIE PUBLIC INTEREST Bond k Share hand in their pockets. If they are supine There is one yardstick for performance, or lack of it, and indifferent enough to let that condition continue, that, that may not be objected to by any party at interest in of course is their affair and their privilege. For our part we can only suspect that the situation public service, whether that party be a utility, the public, described is one contemplated by the prophet Job, when officialdom, public ownership advocates, reformers, standhe cried out: patters, or what not. "How long, Oh Lord, how long? It is the sole criterion by which every policy, every stock-jobbi- ' 1 ' x' m 1? IHf. W' S3;i M!! IP m l$f ip SjfiH nj;31 ! fS i! ijilr i ; j p-- ? v .. i it s,; ng should official act, and every decision within the law, the on y !S it And formulated. measured, determined, or in policy, legitimate basis upon w'hich proposals for changes or may be justified, or maintenance of present policy may be entertained. That rule is simple and is easily understandable, itis promay be stated in these words: Is the thing that left be to posed to be done, or the thing that is proposed undone, IN THE PUBLIC INTEREST? It should be added that any proposal, clearly in thewithpublic interest, should receive attention and approval absence out delay, and with a minimum or rather a total of legalistic quibbling and Accepting the foregoing as basic common sense in representative government, and particularly n adminutrshall we tion and interpretation of law by commissions, seek to apply it to acts and decisions of the Public Service Commission of Utah in its administration of utlhtl; In that manner we may determine side-steppin- anj its interlocking political . their entry into campaigns depends utm warmth of the power smile, and the reception J in high places. Obviously a candiil candidacy . . ct proportion as the usefulness oftfc g. dominant or unduly strong. We may also determine whether new principles of statutory control are necessary. Thus, if we desire to go to Logan, from Salt Lake City busses of Union in one of the modern Pacific Stages, we cannot do so unless we buy a ticket to Franklin, Idaho, or to some point beyond the jurisdiction of PSCU. After we buy that ticket we may hop off the bus at Logan, retaining the unused portion of the ticket as a souvenir of administrative disregard for the rights and convenience of the people. ticket at Logan On the return trip "c. have to buy a 7 from an Idaho starting point, board the bus at Logan and proceed to Salt Lake City. In both cases we are obliged to buy transportation we do not and cannot use. If we are at Salt Lake and want to go to Brigham City we must buy a ticket to Corinne if we want to travel by the modern bus. Why is such an expensive and idiotic condition foisted upon the people of Utah? Why are we not permitted to buy a ticket and travel by any means we choose to our o actual destination. Why must1 we travel via of Cache out in or bus Central railroad Valley (or train) or pay a penalty? o Central railroad holds The answer is that the bus franchise and that we must patronize that bus system, exclusively when we travel by bus, or pay for the luxury of traveling in comfort elsewhere. The argument of the commission appears to simmer o down to this: The Central holds the exclusive monopolistic, franchisee It was in the territory first and now, per se, today, tomorrow and forever, it is entitled to and sole exploiting privileges in special, that region. That regardless of whether people like or can tolerate its service, schedules, and equipment they must patronize that line or pay the penalty. We are going to admit that the equipment of Utah-Idah-o Central is a trifle more modem than the rt of the pioneers, and possibly a little speedier. But still we feel that the Public Service Commission of Utah is going out of its way to force those fine old relics upon us. That condition of affairs is not peculiar to, nor confined to points in Cache Valley and northern Utah. The Bamberger railroad holds the same sort of special privileges in the territory between Salt Lake City and Ogden and the Orem line is the favored outfit in Utah county. Let us apply the rule: Should people have the right to travel by any convenient means they may choose without official restriction in the interest of transportation systems? Should people be penalized for patronizing modem service? Does the Public Service Commission of Utah administer the law in the public interest, or is it twisted to meet the exigencies of and wholly inadequate travel service? Are special exploiting privileges of outworn transportation systems superior to the needs, rights, privileges, and convenience of the public? Let the reader Utah-Idah- Utah-Idah- Utah-Idah- ox-ca- so-call- ed one-hor- se up-to-da- te associates igM Not a few of such aspirants make it plain that apprQVal their chances of election are neriimu, u the seventh son of a seventh doesn,t undergtand that the political tendencies auch aspirants must be wholly accepUbteffi &VJSOVtl require unusual intelligence w) mow mat once suU aspirant obtains power blessings and support, helm, every vestige of independence. He may talk glibly, has a growing procession of glib talkers of dean Americanism, high ideals and purposes, private i and wholesome ethics, but, invariably he votes Bond k Share. If the power crowd and their political partner p J yond passive assent, or a slight nod of approval, and i ally contribute funds, and procure contributions fra I interests in industrial and financial fields for expenses of their political creature, it may be tahii granted that he talks only as and when his owner permit or direct Manifestly, when a substantial number of public State of Utah have undisclosed alliances with the in interests, it is virtually impossible to obtain general val for any progressive measure or movement. And under-covmen are added to those in open pay of ft Power k Light Company and its allied political, fii and industrial interests, the victims and opponents of domination and political racketeering have less than proverbial Chinamans chance. Highly important, also, is the employment of members of the legislature, andj other public figure give promise of an enduring ability to guide and eonr. some portion of public opinion for the benefit of the cal combination. In this connection the power compc has not hesitated to employ as Btooges. and as useful and representatives whose ployees, both shoulders are always at the power wheel. is the employment of educators, whose in the community (a standing which unhippC; standing become an article of commerce) refte have to appears an aura of culture and enviable citizenship on the company that tends to obscure ugly facts that an ui picture might disclose. The company has placed! some of its best talent in key positions in service clubs, chambers of and elsewhere, for the express purpose of a fairly clean front exposed to the public view, and for deeper purpose of keeping its ideas dominant in schools of public opinion. Naturally the power com! advances numerous high sounding and altruistic for its excessive participation in civic affairs, keeping ulterior motives well in the background. In the fissl analysis Utah consumers are obliged to pay for the indne control thus imposed upon them. The company not only admits participation in all nc activities but uses the occasion to cover its head with halo. We quote from the companys 1938 port to its stockholders: aid er Utah-na- e: self-plac-ed It has participated in many civic enterprises both in money and through services of its em- out-mod- ed ployees. We find Power Company men active in Chambers of Commerce and service clubs from one end of the territory to the other. They also serve in the Community Chest organizations and on the boards of charity and character building agencies." judge. SALT LAKE CITY TRACTION SERVICE Another example of utility administration by PSCU Utah Light k Traction Company, operating street cars in Salt Lake City is a subsidiary company of Utah Power k Light. It has changed most of its system to jpumlina busses. The new busses are much smaller than the street cars they replaced, and the seating capacity per bus is much less. When the change was begun the public was assured that enough extra busses would be put into service to make up for the smaller seating capacity. PSCU ruled that on ordinary business the Traction company would be permitted a maximum overload of fifty per cent during peak hours. That ruling seemed to be generous enough. Nevertheless during the early evening rush an overload of more than 100 is not uncommon. People call it sardine service because they are jammed into the bus so tightly. The congestion at times is so great that it is difficult to open or close the bus door. PSCU admits the service is far from satisfactory, but is so occupied with Traction Company wails of poverty that it appears to have no idea of a proper solution. One com- missioner is said to have suggested that special trippers of large size be added to the fleet for the peak load period. The company has declined to entertain that suggestion, Therefore the talk goes on and on. Nothing is done to im- prove conditions. Patrons continue to stand up, squeezed Lltric Bond & . of Share for the g 8ervice dubs or for full stomachs of Utahs poor. If auchan altruistic organization as its Utah supporters d I I and Utah Power & Light infers, why doesn't it disgwf I Bome f the Utah millions it has exacted from Utah a Bume? Manifestly, if that question be answered triH it becomes clear, even to the most obtuse, that I dubs. persons, and organizations who help Electric Bo I I & Share Company pull the wool over the eyes of Utah are guilty of being used in a betrayal of their own peo And the expense incurred in f1 using them ultimately well-bein- 1 on I consumers. Its allies in service clubs are, perhaps unwittingly H cipients of much instruction in the theory of economics. In the talks of power they fe about private initiative', rugged individualis' "private enterprise, and all too often that much-al- l Does reCU regulate the Traction Company in the word Americanism. Apparently anything that hefcf Affl power & Light keep power rates up and public LY ownership down is Comronv mEIT ySru NY Canism UntiIity Md WtUn that seeks to bring down rates the regUlat! inthfhJ ShH.8entf8,w de,8re8 to h expand municipal plants is Obviously it a e of such catchi phrases is for percentage of Trac- the purpose of trap! PJ If .Uah Light.& Traction the unwary and unthinking for the benefit of the trap! In M sailing its opponents and critics the blackguard .adfquate 8enice .. the Salt Lake City Commission encourage of t catch phrases is employed. Thus, radical, competition by issuing another franchise? Is it not time that incompet- socialist, communist nazi Tsarist, St ent utilities be weeded out? Let Salt Lake Socialismsubsidized tax-fre-e City readers plants etc., are answer these questions. (Continued on next page) Tf if lt h01 J "Sted? MnHlirnT PTd Pt, |