Utilities Front

P:Last week the Pennsylvania Public Service Commission announced that it would consider 6% instead of 7% ( a maximum fair return on the investments of the 4,200 public utility companies under its jurisdiction "so long as the present economic conditions exist." All companies which earned more than 6% last year will be ordered to cut their rates to bring profits down to that figure.

P:Last week in Wisconsin elections six communities voted for municipal operation of local utility plants. Seven others rejected municipal ownership. In Madison, the state capital, both sides claimed a victory because the citizens voted to buy the local power & light system but turned down a $30,000 appropriation necessary for appraisal before purchase.

P:Last week in Connecticut Albert Levitt, onetime Columbia University professor, now a special assistant in the U. S. Attorney General's office, charged in a debate with Samuel Ferguson, chairman of Connecticut Power and President of Hartford Electric Light, that the two companies had earned $8,000,000 excess profits in the last five years, offered to go to jail for five years if he could not prove it in the Supreme Court.

Last week in the Legislatures of almost every state in the Union, in almost every town, city and county in the land, a local utility skirmish was in hot progress. Lower rates, municipal ownership, more stringent regulation, supervision of holding companies were the principal issues. In the Press, utility men were replacing banksters as the favorite object of abuse. But unlike banksters, who suffered in silence, utility men were hitting back. With power production climbing to 1931 levels, their cause was worth the fight.

The fiercest skirmish in the, utility war last week was being fought in New York State. There in behalf of his reform program Governor Herbert H. Lehman had been quick to press a tactical advantage handed him by the Federal Trade Commission's revelation of letters written to Associated Gas & Electric Co. by a State Senator who was a member of the powerful Public Service Committee and its one-time chairman (TIME, April 9). Alleged letters from bumbling State Senator Warren T. Thayer were discovered, in which the writer hoped that his services had been "satisfactory" to the big holding company. The Governor demanded a sweeping investigation not only of suspicious relations between public officials and public utilities but of New York's whole huge utility business. Mr. Thayer introduced a resolution calling for his own investigation. With this investigation promising to be a whitewash and his own inquiry sidetracked, the Governor grew indignant. His attorney general curtly refused to serve as inquisitor for a State Senate committee whose powers were narrowly circumscribed by the Thayer resolution. In desperation the State Senate wired Ferdinand Pecora. The counsel to the U. S. Senate Banking & Currency Committee was too busy.

During the Albany uproar Governor Lehman's utility bills were favorably reported out of committee where they had been pigeonholed for months. All but two were promptly passed by the Senate. But those two--one to permit municipal operation after a referendum, one to assess costs of rate and other investigations against the utility companies--were the Governor's pet bills. The mild, soft-spoken Governor declared that the "fight has just commenced."

Publication of State Senator Thayer's flat-footed notes had other political repercussions. In Washington the House hastily concurred in a joint resolution lately passed in the Senate directing the Federal Trade Commission to initiate a nation-wide utility rate investigation. Ever since 1928 the Commission has been delving into holding companies and the new rate investigation will merely round out its vast utility knowledge. It had hoped to complete its six-year labors by June i and to present to Congress its findings which already fill 50 fat volumes with a total of 25,000 pages. But heartened by the reception accorded its discovery of the Thayer letters, the F. T. C. last week let it be known that it would continue through the summer. Taking a tip from Ferdinand Pecora, it darkly hinted at some "especially" exciting revelation for the final lap.

Not from the Federal Trade Commission but from Interstate Commerce Commissioner Walter Marshall William Splawn went a report to Congress last week on another kind of holding company--telephone & telegraph. Urging enactment of the Rayburn bill to establish a separate Federal Communications Commission, Dr. Splawn eyed the $5,000,000,000 American Telephone & Telegraph System with deep suspicion, recommended that it be investigated. His suspicions were based largely on his study of Associated Telephone Utilities Co., an independent about one-fiftieth the size of A. T. & T., now in receivership. ''What is disclosed by the examination of the Associated Telephone Utilities Co. is in my judgment but typical of what may occur under existing laws," wrote the Commissioner.

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