Show T TOE THE E DAILY NEW YORK YORK- Fin Financial a nc i a I W Whirligig h i r Ii Written for The Telegram by JAMES McMULLIN NEW YORK YORK Floyd Floyd Carlisles Carlisle's proposal to apply the Washington plan to the electric subsidiaries of Consolidated Gas was a neat bit of strategy strategy strategy-so so neat that New Yorkers who have criticized the thc group for clumsy public relations were amazed Whatever the ultimate outcome outcome out out- come Con Gas is In a far stronger position than before If the plan is adopted North Americans American's experience in Washington Washing Washing- ton and St. St Louis where Louis where a modifIcation modification modification modi modi- of it Is in effect indicates that the electric companies will have nothing to fear They are assured assured assured as as- of a certain fixed return on invested capital before rate reductions reductions reductions arc are required Earnings above the fixed return are shared between the power company and its consumers consumers consumers con con- sumers in the form of lower rates North American has found lound that in increased increased in- in increased creased consumption Induced by cheaper current rent yields worthwhile returns from the earnings stand point I And if It the city cHy rejects Carlisle's Carlisles proffer the burden of criticism logically logically log log- shifts to the municipal admin admin- Con Gas can can and and will will will- broadcast that its it's done its part to torca rca reach a rc reasonable understanding Moreover Fusions Fusion's refusal to dicker with Carlisle on these lines would start a tee for Many Democrats in the thc state IE legislature legis- legis gis 1 lature a t u r c e and Republicans too too too- would leap at the thc chance to combine two pleasures taking a wallop at LaGuardia and defending the utilities utilities util util- on grounds rounds that can eRn be justified justified justi justi- fied lied to the voters Such a scrap would do Fusion no good and Con ConGas ConGas ConGas Gas no harm Note that Carlisle addressed ed his proposal to the legislative legis legis- lati e committee not committee not the mayor major a Theres There's still another angle The essence of the Washington plan Is s agreement between the utilities and public authorities on a rate base base base- the valuation of the power companies companies' com corn panics panics' property on which returns are arc to be computed An argument on this point could easily last for years Certainly th there's theres res re's a wide vide gulf gulL al 31 ready between the New York power authority and Con Gas as to the worth of the latter's meanwhile meanwhile mean mean- while competitive construction were held up on the premise that the Washington plan was en cn route nothing at all might happen until friendlier national and andor andlor lor city ad ad- were in power Cynics suggest that perhaps Mr Carlisle wouldn't mind if it did work this way In any my event the retreat Is no rout By borrowing North Americans American's Americans American's Ameri Amen cans can's yardstick Con Can Gas has nas probably probably ably saved its bacon bacon and and the consumer consumer con con- sumer has fresh hope of relief without without without with with- out being taxed for it Insiders say theres there's another side to the glowing picture painted bythe by bythe bythe the federal reserve board of a 70 per pcr cent gain in industrial profits for lor the first nine months of 1934 against the same period in 33 They agree that hundreds of corporations especially large rg ones h have ve shown vast improvement but the figures fail to show that to some extent extent ex ex- tent this is due to casualties among smaller competitors New York leaders hate to concede that Senator Borah Borak is right but a number of them privately admit theres there's sense to his point that in inmany inmany inmany many industries not however howe including in in- eluding steel N R A gives big corporations corporations corporations cor cor- the breaks over the little fellows They prophesy a further trend towards centralization of industry industry industry in in- in the hands of giant companies com panics with a out of minor producers who cant can't stand the competitive com corn pace ThIs is the exact op op- op- op r of or what's happening In England England Eng Eng- land where industry is being successfully sue sue- V decentralized Keen observers grant small manufacturers manu V only one advantage advantage- in their struggle for existence They're better belter equipped to cope with labor problems because its it's easier casier to replace re re- re- re place strikers than a V New York real estate men claim th the state moratorium law la lahas has been an important factor In the continued coma of the mortgage market markel Its It's true that mortgages contracted since V the law was passed are arc specifically exempted from Its provisions but but prospective investors pause to think how easily it might be amended amend amend- ed to include them and lose their enthusiasm At the same time they agree that the law cannot be repealed repealed re rc- re- re pealed without chaos of or foreclosures foreclosures fore fore- foreclosures closures that would knock what little real estate recovery there has been for a loop The governments government's 80 per cent V guarantee on approved mortgages should help this situation when the idea really sinks in Its It's about the only hope of or getting the boys to take their hands out of their pockets a a aA A rail expert remarks that th the th roads only need aced four lour developments to put them back on their financial feet Lots more traffic regulation of ot competitors higher rates and lower wage costs He doubts that any three of ot them will suffice sulfice without without without with with- out the fourth fo He adds they'll probably obtain all these benefits about the same time Andy Mellon tak takes 3 up toe toe- dancing a a aWall Wall Street was amused by Richard Whitneys Whitney's grave argument that mythical financial and industrial industrial industrial indus indus- trial gi giants cannot be held responsible responsible sible for recovery or lack of oC it H Comment Comment Com Corn ment runs that Whitney now now rates with Christopher Columbus Columbus after after shooting for the Indies of stock exchange ex cx change independence he has instead discovered that Wall Street isn't the hub of the universe after all 9 0 Steel output is expected to rise 20 per cent in the first quarter quarter- barring strikes Auto production production tion figures to gain 10 per cent A number of brokerage em em- celebrated the new year by losing their jobs jobs even even in un- un merged firms f Copyright McClure Newspaper w Syndicate |