Probe

Light to live by, gas to cook with, power to work with, trolley cars to ride upon--do these fundamental necessities cost more than they should?

Senator Walsh of Montana, iron-grey ramrod of the public service, contracted the idea, following the Senate's investigation of Samuel Insull's political generosity, that the public may sometimes be used by some men as a private utility; that the financial structure, service rates and political activities of public utility corporations would bear investigation. He proposed a resolution to that effect in the Senate.

Senator George of Georgia deflected Senator Walsh's plan. At his suggestion the Senate, instead of voting to make the investigation itself, directed the Federal Trade Commission to take the job (TIME, Feb. 27).

The Commission began its hearings in March. In point of the volume of testimony taken, at least, the Commission had silenced criticism of itself. Public prints have published masses of the material collected, have made much strong comment. The Commission has reported factually to the Senate each month and presented exhibits. But the Commission has reserved its opinion of the public utility companies until all evidence is in.

Last week the first phase of the Commission's investigation was completed. A long parade of publicity agents and "public relations" executives had passed before the investigators. Their testimony showed:

That the public utility companies of the U. S. have been organized as associations to work for a common end.

That this common end is to propagate the idea that private operations of public utilities is better than State operation; and the corollary idea that State operation is "bolshevistic."

That the propaganda has been spread in uniform manner, as follows:

1) Rewriting public school textbooks and obtaining their adoption throughout the land.

2) "Taking care of" teachers and professors who agree to teach that private operation is good, State operation bad.

3) Placing advertisements in newspapers, and explaining to the newspapers that to oppose private operation will be to lose public utility advertising.

4) Maintaining "lobbies" at seats of government to combat state ownership projects.

5) Circulating literature, including a "catechism" for school children and doggerel verse.

The mass of the evidence did not show that the utility companies had proceeded along lines very different from the lines followed by other advertisers of ideas. More effort was spent in boosting the private-operation idea than in knocking the competitive, "bolshevistic" idea of State ownership.

Only the mediums employed seemed unusual--school books, college lectures--and these the utility men explained by saying they had found "hostile" forces at work in the schools. They named some things called the League for Industrial Democracy, the Public Ownership League, the People's Legislative Service, etc., etc. The annual aggregate outlay of such organizations, however, was reported to be some $50,000 as compared with about $900,000 by the public utility companies for lobbying and propaganda.

Propaganda is such an old story in the U. S. that these revelations have caused little stir except in the yellow (viz. Hearst) press, where they have been underscored and headlined to suggest sinister implications. Unsensational editors have been awaiting the meat of the nut, which the Commission will crack out next autumn. This will consist of private ownership's dollars-and-cents service or disservice to the consumer. Questions to be answered when the Commission concludes the financial phase of its work include the following :

Do private corporations furnish light, heat, power, traction, more efficiently than government-operated plants?

Has the expansion of public utility securities driven public utility rates disproportionately high?

If the security-holders have been benefited at the expense of the consumers, can public utilities be regulated, and how?

Has "pyramiding" of public utility holding companies violated the anti-trust laws?