| Show W WORLD ORLD POWER CONFERENCE ENDS Supposedly t Taboo Causes Walkout of Sonic Some Delegates Sun l fachin Tails Fails ls P President Sends Semis His llis Message l C C. C UTLEY utility executives and engineers from all aU parts of P PUBLIC the world are on their way home now from the World Power conference at Washington wherein it was hoped that all nations nations nations na na- might gain a clearer understanding of the worlds world's power resources and how they might be used for the the best best good of tion Approximately delegates came from abroad broad to attend the important parley which has a tradition that only scientific advances will be discussed or reported and that politics shall never rear its ugly head The ugly head was reared with a vengeance this time though and its rearing resulted in the walking walking walk ing out of some of the most important delegates Of 01 course the delegates did visits a model electrified farm larm and submitted submitted sub sub- endless papers on technical advancements more Important and i less Ie understandable than most of I Ithe the widely publicized discussions of ot the parley They also a assembled on the green greengrass greengrass greengrass grass yard of 01 the Smithsonian institution In in- In Institution for lor what promised to be a highly spectacular demonstration of ot a machine designed to use power from Irom the heat of the suns sun's rays Old Sol himself did not take kindly to ties Ues were divided and and subdivided over and over again and at the bottom of 01 this vast pyramid depended upon to support themselves themselves them them- selves selve and everything above them were the only companies which owned any physical properties or had any real earning power the local operating and gas utilities companies I In II certain ea catl ea there were n m many as a. eight companies Companie interposed between the fhe operating com com- i f 9 P r Secretary of State Hull Greets Dr Julius of 01 Germany as Dr W. W F. F Durand Looks On I this harnessing of ot his authority and turned on the heat so generously that he succeeded in melting an essential essential essential es es- es- es bearing of 01 the contraption thereby postponing indefinitely an opportunity for tor the showing of ot the machine to the great minds of 01 the power business Holding Bolding Company Pro Company Pro and Con Can This from the layman's point of 01 view was probably the most spectacular spectacular spec spec- single piece of 01 news to come come from Irom the conference Alter After that the delegates settled down to a few lew lively lively lively live live- ly little discussions over those two time-honored time bones of ot contention the public utility holding company and public ownership Judge Robert E. E Healy of 01 the commis- commis commission securities and exchange commission commis lion sion led the attack on the holding company Defense was taken up by Max Frederick Horn representing the Belgian government One of 01 the best holding company executives of 01 Europe Mr Horn argued that the holding company was the salvation I of the utilities throughout the thc world I That continent he said Is genuinely apprehensive concerning the workIng work work- Ing of the American holding cone com com company pany pony law He lie hoped that the law would not result In the d destruction of 01 the holding company system on this side of ot the water I Dr liar low S. S Person o of New Nelo York m a consulting economist threw the he meeting a nice nire morsel monel ft to so fight veer when he declared that thai private utilities ties lies o oj of the Un United States place a book value ue of oj 11 17 billions billion of 01 dollars on their heir properties while the actual physical value lalue does doe not nol come within 5 billions billion of 01 that lII amount amoun Judge Healy's Healys paper went Into what he called the public utility story tory of 1920 He lie described features tea lea tures lures which he be termed unusual The extreme and often disastrous dis competition of ot holding companies to acquire additional properties was he said laid characterIstic characteristic charac of this period Holding Bolding company company com com- pany representatives and promoters combed the United States in search learch of 01 municipal and private utility companies which could be purchased purchased pur pur- chased outright or tied up with an option There appeared to be no limit to the prices that could be paid for or new properties or the extent ex ex- extent tent to which anticipated profits could be capitalized Pyramiding Pyramiding- Holdings Many of ot the holding companies were increasingly impressed with the ease of floating new securities through investment bankers who were eager for lor commissions and profits on securities which could besold be besold sold laId to a public hungry for tor Investment Invest ment outlets and speculative opportunities One holding com company pan was piled up on another So-called So investment trusts and companies were erected above UK boa holding companies equi panics panie at af the bottom bollom and the holding or investment company at a the top op The disastrous effect of 01 pyramiding pyramiding pyra pyra- on the security val values es of 01 the principal holding companies was n noted ted by Judge Healy who submitted a chart giving the aggregate aggregate aggregate gate market value of 01 the securities of 01 twenty five companies for lor the years 1929 1933 and 1935 1035 Charges Inflation There were instances declared Judge Healy where the write write write-up up was used as a basis for lor additional security issues securities issued against water In a very few lew Instances instances In- In in stances these securities were sold directly to the public but in most cases they were delivered to a holdIng holdIng hold hold- Ing tog company which issued and sold its own securities against them so that indirectly many securities based on inflation or write-ups write were sold to the public It ii is difficult he lie concluded to 0 tee lee wherein the lire well established operating operating operating ope ope- rating companies in the large cities gained anything lot for they were acquired by holding corn com ponies panis Several vI of v them are very Iry successful and are not nol owned by hold ing companies The experience of 01 the last few lew years leads IUds to the conclusion that generally speaking holding companies com com- companies panics which are not in the first tier above the operating companies or which are not necessary to hold together an efficient integrated system tem tern do more harm than goodAs goodAs good As to the future it will undoubtedly undoubtedly un un- see electricity used to an extent not now envisioned The future future fu fu- fu ture of 01 the privately owned utility company depends to a great grent degree on whether a fair lair and easily workable work able method of 01 rate regulation can be developed and upon the in tu success in completely freeing treeing itself Itsel from Irom the hands bands of 01 the Jugglers of 01 finance and devoting itself more to the production and sale of ot gas and electricity and less to the production and sale of 01 ties Politics Comes In Maurice P. P Davidson former lormer New York city utilities commissioner com com- missIoner representing Mayor La GuardIa touched off the political bombshell advocating the threat of 01 public competition as the only ef- ef rates The threat of 01 public competition produces an Immediate and salu tary effect on the rate policies of 01 the companies he said Following Mr Davidson was Langdon W W. W Post chairman of 01 the New York City housing tion who complained of 01 the way in which the poor of 01 his elt city were in his opinion exploited by high rates They Ther the 0 of poor our city rily he h con cnn trued laie anee 1118 nickels I hile you ou and I 1 try uy to 0 rare taie lal dollars Jolla The difference a II SZ 12 and s monthly electric light bill may not no seem eem to bethem be tery Irry much muth to 10 you ou and to 0 me but to 10 them hem it i. is s all ally the he difference in n the le Both noth Mayor La Guardia whom I represent at this conference and andI I believe that public ownership of ot electrical utilities or the threat of at public ownership is the only practical practical method by which this object can be obtained This has been proved so in other cities and only a short time ago the New York City rates were reduced because of the drive put on by Mayor La Guardin Guar Guar- dla din for lor a municipal power plant in that city and the able paper presented presented pre pre- here by Mr E. E F. F Scatter Scatter- good of Los Angeles Angele only serves to further strengthen us In this con Division of Savings The very nature of 01 the privately owned utilities with their monopolistic monopolistic monopolistic listic feature and their complicated financial structure will always tend to hold the rates up in spite of 01 all the technical Improvements which the engineers may discover Where al savings nJ are made they ran can never neier go in their lir entirety to the con sumer They are always divided be be- him laim and ant the fhe owner ouner and some sometimes sometimes times limp I fear not nol tl equally These factors together with the high cost of 01 regulation although not high enough yet to be efficient or effective according to Bonbright and Mosher convince Mayor La Guardia and me that the full lull benefits of 01 electrical genius Inthis in inthis inthis this country will never be enjoyed under our present methods of 01 pro- pro and distribution Indignant at the New York mans man's conduct was Morris L. L Cooke chairman chairman chair chair- man of 01 the conferences conference's executive committee administrator of 01 the rural authority andone and andone andone one of 01 the top men in the biggest of ot all public competitors of 01 privately privately- owned utilities the TV TVA A. A Apology of Chairman I deprecate the emergence of 01 politics this morning Mr Cooke said in his statement An effort has been made from Irom the beginning in accordance with the traditions of ot the World Power Conference to keep the discussions on a high technical tech tech- plane I personally deeply regret tide this mornings morning's occurrence rrell e A cardinal principle of 0 the World Power confer con ence from Imm its ill inception hiss has been entire entire en tire freedom of speech an on c cand and technical miral matters combined comb with the complete elimination of lJ politics IT We ITe e hare III made every eiery effort to 10 carry arry carryon on this tradition Before Detore the conference started Mr Cooke had said about the holding company and public ownership subjects subjects sub sub- jests I have been asked whether so controversial a subject will not arouse animosities or heated con con- We are not afraid of 01 that Representatives of 01 both sides are sponsoring the conference and are vitally vitaliy interested in its success Russia Speaks Her lIer Piece On the closing day of 01 the conference con Terence ference Floyd L. L Carlisle of 01 New NewYork NewYork NewYork York who had defended the utility companies declaring that they t a M M w It r t tt t r t S Sit it h s x Y to tot t W s 4 s i India Sent Mme Agarwal to the Conference would operate co-operate with any plan government or otherwise founded In sound economics for lor the public good made the statement that modern Industrial civilization has been almost exclusively confined to countries where private ship is the rule B. B E. E owner a Russian delegate Immediately Ri Russia ia was last among an nations in power production In 1923 but today It is 11 third lagging behind the only United States Slates and Ger many President Roosevelt addressed the I before belore it ended Western rD N Newspaper Union I |
