Evening Star Newspaper, December 11, 1934, Page 12

CRITICS OF POWER PROGRAM DEFIED McNinch Promises Vigorous] Fight on Hindrances to Development. Private power interests were prom- ised a vigorous fight against any steps they may take in an effort to destroy or obstruct the Roosevelt administra- tion’s new power development pro- gram, The promise was made last night by Frank R. McNinch, chairman of the Federal Power Commission, in an address on “The New Deal in Power,” delivered in the National Radio Forum. The forum, arranged by The Washing- ton Star, was broadcast over a coast- to-coast network of the National Broadcasting Co. Going back a year and a half ago, Chairman McNinch said itics de- clared the plan visionary, impractical and certain to fail.” Fears Been of Success. “For the past year their fears have been not of failure but of the success of the administration's power plans. ‘Therefore, a Nation-wide barrage of propaganda has been laid down to mislead and frighten the people. But the attack not only failed, but has solidified the support of the people, for they knew that behind the smoke- screen of ‘poor widows and orphans’ stood their tearful and valiant defend- ers, those intrenched financiers who have been reaping their millions where they have not sown.” Pointing to the contemplated legal battle to be instituted by the Edison Electric Institute, Chairman McNinch said: “The wisdom of thus challenging the combined judgment of the Con- gress and the Chief Executive, directed toward economic recovery and the per- manent weal of our citizenship, may well be the subject of calm and pa- triotic consideration before decision. “Recognizing the great importance | to our national welfare of a soundly | based prosperity for the power indus- | try, I indulge the hope that plans for | obstruction may give way to measures of co-operation. that attack may be abandoned for support of the Govern- | ment’s power program. But if the at- tack is made, let it be understood that | there will be no retreat by Federal forces.” Propaganda Sums Cited. Answering investors who have writ- ten the Power Commission regarding their stock losses, McNinch asserted | that the power industry spent he(\&cenv $25,000,000 and $30,000,000 for propa- ganda that could have gone for divi- dends to investors. He also asserted that the power utilities’ investments on December 31, 1933, represented $12,900.000,000, and that the consumers’ investments in | utilization equipment totaled $13,200,- 000.000. “Because of the substantial increase in domestic consumption during the | year 1934 it is safe to assume that the consumers’ investment is now ap- proximately $14,000,000,000. And every dollar of this consumer investment represents actual money paid for this equipment. No such assumption may be safely made as to the claimed in- vestment of the utility companies, as | we do not know what part represents money and how much represents water.” Text of Address. ‘The text of Chairman McNinch's address follows: Through the courtesy of the Na- tional Radio Forum I talked to you last May about the Federal Power Commission and its functions, and I am grateful to Mr. Oliver Owen Kuhn, managing editor of The Washington Star, for the privilege that is mine tonight of speaking to you about the New Deal in power. May I also express the deep appreci- ation of the Federal Power Commis- sion of the friendly interest in and support of our work, which was so freely manifested in many letters re- ceived following my earlier radio talk. Since the bold, constructive and epoch-making declaration of his power policy by Mr. Roosevelt at Portland, Oreg.. in September, 1932, America has become aggressively power-nrinded. In that speech Mr. Roosevelt said: “I state to you categorically that as a broad general rule the development of utilitles should remain, with cer- tain exceptions, a function for private initiative and private capital.” But; he added, “I favor giving the people , the right to operate their own power business where and when it is essential to protect them against inefficient service or exorbitant charges. As an important part of this policy,” he said, “the natural hydro-electric power re- sources belonging to the people of the | United States or the several States shall remain forever in their possession. Never shall the Federal Government part with its sovereignty and control over its power resources while I am President of the United States.” Con- tinuing, he said: *“The power issue, ‘where vigorously handled in the public interest, means abundant and cheaper current for American industry, re- duced rates and increased use in mil- lions of urban and rural homes and preservation of our water power re- sources.” New Spirit in Power. These declarations, with others, of & progressive national power policy, have been, in part, already transformed into a definite program of action under the leadership of President Roosevelt. ‘The effect has been that power, whether publicly or privately pro- duced, in all its far-flung realm, pulses with a new spirit of enterprise and service and is moving forward toward the fulfillment of its social and eco- nomic functions as the universal gervant of the people. The great development works in the Tennessee Valley, including Norris Dam, the Joe Wheeler Dam, the Pick- wick Landing Dam and the Wilson Dam at Muscle Shoals; the Boulder Dam in the Southwest, the greatest concrete dam every attempted by man, begun in 1931 and to be completed in 1935; the Grand Coulee and Bonneville Dams in the Northwest and the Fort Peck Dam on the Upper Missouri, which will be the world's largest earth dam; the Seminole Dam in Wyoming and the proposed St. Lawrence River project in the Northeast are all parts of a broad, general plan that is na- tional in scope and service. Wide- spread as will be the effect of these power yardsticks, they are not intend- ed to supplant, but to supplement, the | power developments. | lation and, possibly, aiso, upon legisla- | THE EVENING STAR, WASHINGTO Discusses Federal Power FRANK R. MCcNINCH. and a Nation-wide barrage of propa- ganda has been laid down to mislead and frighten the people. But the at- tack not only failed, but has solidified the support of this program by the people, for they knew that behind the smoke-screen of “poor widows and or- hans” stood their tearful and valiant defenders, those entrenched manipu- lators who have been reaping their millions where they have not sown. And now press dispatches indicate that the Edison Electric Institute, | which is controlled by holding com- panies and represents about 80 per cent of the electrical industry, may be planning an open and mass attack | upon the Government's “yardstick” ‘Two eminent lawyers have been employed by the in- stitute and have rendered an opinion to the effect that the Tennessee Valley | Authority act is unconstitutional. | Whether such opinion may be the basis for an intended assault on this legis- tion underlying other Federal proj- ects is not known. The legal right to pursue such course is beyond question. The wisdom of thus challenging the combined judgment of the Congress and the Chief Executive, directed to- | ward economic recovery and the per- | | manent weal of our citizenship, may well be the subject of calm and pa- | triotic consideration before decision. Co-operation Urged, Recognizing, &s I do, the great im- portance to our national welfare of a soundly based prosperity for the power industry, I indulge the hope that plans for obstruction may give way to meas- ures of co-operation, that attack may be abandoned for support of the Gov- ernment. But if aitack is made, I am certain there will be no retreat by the Federal forces. If I have read the history of the | industry correctly, if I sense public opinion accurately, discretion would seem to suggest that the industry turn its back upon the past with its grievous offenses against the public interest and courageously face the future with a resolute purpose to administer these public utilities in response to the just demands of the changed economic con- ditions in the new era in which we are living The Government's program for vastly j increased power consumption at lower rates has opened a wide door of oppor- tunity to the power industry. If it has the vision to see and the enter- prise to advance into this wider do- main of public service, it will find there millions of new customers, while selling more current to present con- sumers. Thus will it build a broader and more stable base of increasing rev- enues, an added element of security for investors and assurance of legiti- mate profit earned through better and cheaper service. This will follow upon the familiar and primary principle that consumption of a commodity or service increases as the price decreases, and in the case of electricity, as the use goes up, the cost of producing yielding savings to users of electricity in some sections, the rate reductions during this year being estimated at $30,000,000 or more, while the power companies have benefited thtough a 7 per cent increase in consumption during the first nine months of 1934, as compared with the corresponding period of the previous year. Reports also show a marked increase in the installation of electric appliances in the home, and at radically reduced costs. These are but beginnings, the promise of larger, ultimate benefits to all. ‘The development of a unified na- tional power plan directed toward the protection of our natural resources from selfish exploitation and toward | the achievement of maximum econo- mies and widest social values, occupies a major place in the Roosevelt power pelicy. When electric power spread beyond the frontiers of State lines and became regional and national in the range of its activities, it found itself in its regional activities very largely free from the wholesome re- ctraint of public regulation. The State oftentimes could not constitutionally act; the United States did not. Power development under such conditions was frequently dictated by the anti-public objectives of financial manipulation rather than by the social goal of eco- omic generation and distribution. To the jig-saw puzzle into which our national power map was transformed the New Deal seeks to apply the uni- fying hand of co-ordination and na- tional planning. to the end that we may have abundant, dependable and cneap sources of electricity. cludes not only water power develop- ment, but steam as well, as steam will probably be a principal means of gen- eration as far ahead as we can see. Wise planning must be on a national scale and not merely for present needs, but for future requirements. Water power resources should not be treated as separate, unrelated sites, but as parts of one comprehensive system. Coal and gas are not to be considered as competitors with water power, but as essential elements in a balanced ar;d rounded scheme of power produc- n. Practical Undertaking. ‘That is the purpose of the national power survey now being conducted by the Federal Power Commission. This is the first comprehensive, definitive survey of power demands, as well as resources, ever made in this country. Congress authorized such a survey when it passed the Federal water power act 14 years ago, but it was not un- dertaken until President Roosevelt by executive order in August, 1933, provided the necessary funds and di- rected the making of this survey. This This in- | is not & mere academic study. ll.b t, practical undertaking. uuufimfl.nluomonly | A1z ses A , D. C, TUESDAY, DECEMBER -11, 1934 mfivflnflmflumm Such excessive tolls taken from the opera- ting is a gross injustice to the public which pays the bill, for estic | these expenses are necessarily alikey to utility officials and and to all concerned with power generation and the wider use oI electric current. This survey should point the way to a more economic and co-ordinated power development and distribution. No natjonal power plan can be con- sidered complete without the inclusion of a definite program for rural elec- trification. America is backward in this respect, for of our more than €,000,000 farms, only some 700,000 have electric service. This offers a ‘huge market for power and & most inviting fleld of ultimately profitable business. Farmers are entitled to the social and economic benefits of cheap electric power, and Federal and State officials are actively considering hich electric service may ailable to our vast farm- Rates concern consumers more di- rectly than any other feature of elec- tric service, yet rate making has'never been standardized and is at present highly unscientific. Each company de- vises its own rate structure, making a mystifying variety which confuses experts, to say nothing of laymen. By the Norris-Rankin joint reso- lution of Congress, approved April 4, 1934, the Federal Power Commission was authorized to “investigate and compile the rates charged for electric energy and its service to residential, rural, commercial and industrial con- sumers throughout the United States by private and municipal corporations and to report rates, together with an analysis thereof, to the Congress at the earliest practicable date.” Survey Being Made. Pursuant to this resolution, the commission is now conducting the first Nation-wide electric rate survey ever undertaken in this country. This is a fact-finding, not rate-fixing, survey. Our mission is to assemble and analyze all electric rates in force in America and to present this data so as to per- mit intelligent rate comparisons be- tween communities, as well as be- tween various classes of consumers. It is believed that this rate survey may afford the basis for and prompt the correction of many rate inequali- ties and contribute toward standardiza- tion of rates. Another task assigned to the Fed- eral Power Commission by a Senate resolution introduced by Senator Cos- tigan and by executive order is the investigation of the cost of distribut- ing electricity to consumers. Distri- bution costs, not generation, figure most largely in charges to users of electricity, yet there is no compre- hensive and authentic information as to what distribution does actually cost. ‘When this study is completed, we will know the true relationship of these costs to rates, and also know of pos- sible economies in distribution. On behalf of the commission, I desire to express our appreciation of the co-operation of the industry, both municipal and privately owned, in furnishing data for these surveys. While planning is essential to the achievement of economies in and a vider distribution of electricity, there is need for correcting certain unjusti- fiable policies and practices of the in- dustry which have put unnecessary expense burdens on consumers. I have time to speak of only one of these problems tonight. Veritable Pandora’s Box. ‘The power holding company has often been a veritable Pandora's box from which have sprung and spread over the operating companies many grievous ilis and iniquities. The hold- ing company is not a public utility and is therefore not subject to direct regulation. Through this ingenious legal device we find control of regue lated public utilities by private un- regulated holding company corpora- tions. Such absentee-control and management of the operating com- panies is both anti-social and un- economic. These holding company dynasties control and manage hun- dreds of operating companies scattered throughout many States, and take exorbitant profits from the operating companies through intercorporate contracts and excessive fees for man- agement and other services. The holding company dictates the terms and the price to be paid to it by its 1 8.8.6.6.8.800.¢0.8.8.8.8.2 1 this service goes down. Numerous ex- periments by privately and publicly owned power plants have demonstrated the truth of this. It should now be clear to every one that the old system of limited sales at high rates is out- moded, and that America is thinking in terms of volume production and volume consumption of power at great- ly reduced rates. The New Deal in Power is already SATIN FINISHED New. All-Rubber. Fleece-Lined Ga- loshes that, will brotect Sour pesjtn and " your . . Don't risk SRRer e You éa Buy smdes fitting, warm galoshes for only 99¢c. ZIPPERS several thousand other generating plants, both public and private, and to stimulate them to provide for their sections wider distribution, better service and at lower cost. Plan Fought As Visionary. A year and a half ago when Presi- cent Roosevelt, with the co-operation of the Congress, launched his power program, critics declared the plan vis- lonary, impractical and certain to fail. The wish was father to the thought. But the zealous hope for failure was doomed to disappointment and the lamentations of these Jeremiahs are no longer heard in the land. For the past year,their fears have been not of failure but of the success of the administration’s power plans (4 W. B, Moses & Sons 11th & F Sts., Lower Floor VAPEX VAPOR No medicine can reach more than a part of the infected area when you have a cold. Only 2 vapor can be- cause r is as thin as air and travels inward to the breathing passages the same as air does. That's why VAPEX curbs colds. It releases a vapor that is scientifically medicated for the relief of colds. Now, for the first time, you can get genuine VAPEX in nose drops. What 1s more, these nose drops also contain ephedrine, which eminent physicians regularly prescribe for the treatment of colds. No other preparation contains this powerful combination. ‘At the very first sign of 2 cold—a dry throat, a sneeze or the first cough —simply tile your head back and in- sert a Y dropperful of Ephedrinated Vapex Noseg in each nostril. At once the congestion is brok- en and breathing becomes easier. But these new nose drops do even more! They cool the in- and increase the cold-fight- KERFOOT'S able cold 'Ephedri nated Va- ex Nose rops Thecoldis complete - ly curbed ing powers of the nose. If used in time, Ephed- rinated Vapex Nose help to prevent colds. If the cold 1s already in your system, Ephedrinated Va- Nose D belp Na- ture 1o throw 1t off. At the same time, they bring blessed relief from the dl.s- comforts of a cold. All druggists can suppl, these moxge81 effective E&{ drops, or can get them for ey g VAPEX Made by the Makers of Vipex, the handkerchief inhalant. reflected in electric rates. This condition of affairs, in my opinion, calls for prompt Federal legislation to correct these abuses and free the industry trnm such sapping of its lifeblood. my part, I believe that any such m-um should flatly prohibit profit-making by a holding company out of intercorporate transactions with companies under its control. ‘The validity of this objection to holding company profit-making out of {ts subsidiaries has been recognized by one or two holding company outfits which have either abandoned or modi- fled this practice. Propaganda Cited. In this connection let me say a few words to holding company and to power company stockholders, some of whom have written to the Federal Power Commission in regard to their stock losses. Most of these letters are doubtless inspired by widespread and expensive propaganda. The Federal Trade Commission recently reported that the power industry had spent from $25,000,000 to $30,000,000 an- nually in propaganda and good will advertising. If these enormous sums of money had been paid to stock- holders as dividends instead of being spent on propaganda the stockholders would be many millions better off. Furthermore, I remind you that the bottom dropped out of many power utility and holding company stocks several years ago following closely on the heels of the Insull, the Foshay, the Tri-Utilities and other crashing pyramids of inflated and fictitious stocks which had been unloaded upon an unsuspecting public. Let the accusing finger be pointed at those the trust. ‘Under President Mz'-m ship the Congress has enacted the stock exchange and securities act, protect investors against a repetition of fraud- ulent financing. There is another and larger class of investors, the value of whose investment is dependent upon the policies and practices of the power industry. I refer to the consumers who, according to an editorial in Electrical West, October, 1934, have a greater investment in equipment to utilize electricity than the utilities have in equipment to furnish the cur- rent. It is stated that the utilities had on December 31, 1933, an investment of $12,900,000,000, while the consum- ers had an investment of $13,200,000,- 000 in utilization equipment, one-half of which was in household appliances. Every dollar of this consumer invest- ment represents actual money paid for equipment. No such assumption may be safely made as to the claimed investment of the utility companies, as we do not know what part represents money and how much represents water. Have Right to Cheap Power. On the basis of actual investment, independent of other considerations, these consumer-investors have an un- deniable right to demand that elec- tricity be furnished at the lowest possible cost, consistent with a fair return on prudent investment in usable power plant equipment. For just as the power company is entitled to an op- portunity to earn a fair return on this basis, so likewise are the consumer-in- vestors entitled to a fair return upon their investment through adequate service at reasonable cost. I have now sketched tor you, in out- who wasted your money on propa- | lines only, my conception of the New Prepare Your Car Non-Evaporating Glycerine This permanent glycerine will not rust nor will it boil your radiator when using this glycerine. 18 Mouths Guarantee asusnan [ 4 Non-Rusting Alcohol 18R Proof “Thermo™ sreat im- provement over ordi- nary alcohol. In ur Container or Car. GAL.. alcohol 15 a for In task we ivi active co-operation of all concerned— the privately owned power industry, the municipal power units, commerce and industry of all kinds, the dwellers in the cities, towns and hamlets, and es- pecially the millions of farmers who are now denied the use of electricity. Let all join in an unselfish, liberal movement to electrify America. It can be done. It will be done. And when done, it will add values to both urban and rural property; it will 1ft burdens from many tired backs; it will enrich our social life and contribute greatly toward our permanent social and economic ad- vancement. MAN HUNTED IN SLAYING OF OFFICER GIVES UP By the Associated Press. LOS ANGELES, December 11— Daniel Snyder, hunted for five days in connection with the fatal shooting of Otto Ellinger, movie studio police officer, surrendered to police last night. At an inquest yesterday Mrs. Lilly May Dean, who described herself as| a friend of Mrs. Ruby Michel, who also was shot, said the latter was afraid of Snyder. “Snyder wrote her, saying that if he couldn't have her he would kill her or her little girl,” Mrs. Dean testified. | Mrs. Dean said Snyder first shot | Mrs. Michel and then fired at Ellinger | when he tried to wrest the gun away. Super Service Anti-Freeze Sears Super Service is as good an anti-freeze as money can buy It wil not boil out of your Lasts sev- eral season: Equip your car now with Allstates. The dangerous winter months are here and old worn tires make terrible hazards. Buy All- states on Sears’ Liberal 12-Payment Plan. 29x4.20-21 29x4.50-20 30x4.50-21 28x4.75-19 29x5.00-19 28x5.25-18 5.25-17 5.50-17 Nt 2632 $6.95 7.20 7.50 7.95 8.55 9.50 9.20 10.35 29x5.50-19 ..... 10.85 27,000 Qts. Sold in Only Weeks! Enough for 5,400 Cars (5-Qt. Capacity) Or at the Rate of 1,000 Miles, for 5,400,000 Miles! 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Guffey, first Democrat to be elected to the Senate from Pennsylvania in more than half 8 century, was guest of honor at a victory dinner at the Mayflower Hotel last night under auspices of the Penn- sylvania Democratic Club of Wash- ington. Addressing the gathering of more than 100 that turned out to welcome him, Guffey predicted future Demo- cratic victories in Pensnylvania. The Senator-elect declared Pennsylvania “today is liberal and is going to remain liberal, which means that Pennsyl- vania i{s Democratic and is going to remain Democratic.” Postmaster General Farley presided, and among those who spoke was Jo- seph P. Tumulty, who was secretary to President Wilson. Gov.-elect George A. Earle and Lieut. Gov.-elect Thomas Kennedy of Pennsylvania also attended and delivered brief addresses. In addition to the Postmaster Gen- eral, the dinner was attended by Sec- retary of the Interior Ickes and a number of Democratic party leaders in Pennsylvania. 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