| Show 1 J I I WALL STREET VIEW VIEWS By J James mes McMullin Fin Financial nci l Observer t NEW YORK YORK The The most strikIng strikIng striking ing reaction yet recorded against the new deals deal's power policy was the recent passage by the Alabama Alabama Alabama Ala Ala- bama legislature of a law to curb government subsidized government subsidized competition tion with the private utilities The measure provides that no municipality In the state can build its s own distribution lines to compete with an existing private company without first negotiating ing in good faith alth for tor the purchase of the private facilities It is further further further fur fur- ther provided that if municipal authorities cannot r reach e c n a c it h an agreement with the company as asto asto asto to a 1 fair price the latter shall be determined by tho the state public public pub pub- lic lie service Ice commission If the private utility doesn't like the commissions commission's findings it can appeal appeal ap ap- ap peal to the courts And the city cannot construct a competing system either cither with federal funds or its own money until every avenue venue appeal Is exhausted This law does not prevent municipal municipal municipal mu mu- 0 ownership w n e rs hi p of ot power plants It will viiI not for or Instance Interfere with pending negotiations negotiations negotiations for or the purchase of Commonwealth Commonwealth Com Corn and Southern's properties prop In northern Alabama by bythe bythe bythe the Tennessee Valley authority and towns in that area But it docs does put an end to the up hold-up tactics hitherto used by T V A and other f fed federal e d e era r a I agencies whereby competing lines Jines were vero built with government cash in order to knock down the value of ot existing properties and force private private vate companies to sell on the governments government's terms The most significant feature of the Alabama Alabam legislatures legislature's action was the huge majority for or the bill rolled up in both houses despite despite de de- de- de spite pite the most strenuous efforts from Washington to block Its passage John M. M Carmody new federal works administrator turned on all the heat nt at his command He sent forceful telegrams to key legislators demanding that they kill the measure Clark Foreman Foreman Foreman Fore Fore- man head of the P W A under Carmody went to Montgomery in person to lobby against the bill The were told in effect that if they persisted in passing the law the state might not get any more money from the rural electrification administration administration administration ad ad- ministration and its federal appropriations appropriations appropriations ap ap- ap- ap for public works might be sharply curtailed A year or so ago such threats and pressure would have brought almost any state legislature to heel But this time when the smoke of battle cleared only two votes each in the senate and house were recorded against the bill bill bill-an an extremely pointed back for the new deal i Vt ut leaders hope that other It I will vIll be Inspired to t follo bama's barnas example and there ther subsurface Indications that eral cral of them do may so soot 1001 Chairman Jerome Frank Ii securities and exchange com com slon zion has made It known 1 letter to a leader of th thai 1 York stock exchange exchange that not absolutely Insistent Up l proposal for or a n brokers broker h bi as the only formula tho the commission for r the securities and ca cash of oil oll house customers customer J J This Is a 1 saving face B Bon on Mr Franks Frank's part and antl Street Is quite gleeful a ab u The S SEe SEC B C chairman V that the committee of dl outsiders the stock exchange to j a problem was going 10 thumbs down on his hii lan shrewdly decided j not noi himself out on a 1 limb tl A dramatic illustration change In the Interest rate tune turc during the past decide given by the operating for all member banks in tit ond federal reserve which Includes New and northern New JenIn Jen Jersey In the years 30 1927 hi inda this group of banks showed u age gross annual elusive of profits from rom s ie trading of ot nearly 1 In the years 38 1931 India i the average dropped to 37 about 55 per cent of thi lili Imer i imer mer ten showing This sharp d dec was not dUI due to any ference in earning asset b bli bl i most entirely to lower Itte rates The average rate cli i ito to bank customers in Ne Y City tobogganed from 5 cent in 1929 1920 to per test ceni 1938 1038 Using the same fea jean purposes of comparison tt I aver iver yield on term long-term U U. s. s dropped from per fill per cent on municipals municipal from per cent to 2911 cent and on term short tree trea bills from per cent g infinitesimal figure of one one-B of 1 per cent one one-i j There is no sign whiten any reversal of this do down trend The figures explain tn gri why banks are scratch gravel to economize In eve sible way and to find new sour souro o of Income however trivial So bankers are so blue about outlook that they they- are m Kim wondering whether it is IJ while to stay in business l m Copyright 1939 1039 McClure I |
