How the Utilities Prosper in Hard Times

...The increase in "real dividends," however, was greater, due to an increase in the purchasing power of the dollar of approximately 25 per cent from 1929 to 1932...

...Minimum Wage Law To remedy the deplorable situation revealed by the report tas Consumers' League recommended mandatory minimum wage legislation...

...Certainly, that return, even under capitalist theory, is justified for the years of the depression, when there are few alternative avenues for safe Investment outside of the protected industries...

...Most 0i" the New York delegates were originally housed in the Cairo Hotel, having registered late Friday night...

...The | practical tesnlt of this gouging of jhs consumer ia seen in toe divi- J lead statements of some ot the mat utility companies of New Jerk...

...so that even if the manufacturer is able to produce at low cost there are relatively few who can pay...

...It is not surprising under these circumstances that the great utility companies are willing to pay handsome aums to publicity agents to fight public ownership and Socialism...

...Whether j you are a Socialist or a capitalist, the argument against these utility rates must seem sound...

...An average of 10 per ceat dividend en (he book | value of common stock in the fourth year of depression indicate* an j I outrageous exploitation of con- j burners, especially aiaee the book j »slue ia probably aa Brest today an reprodactien coat, a decisive factor in determining rates in tha past...

...In one case a woman re-**"Jd 21 cents for putting linings ¦seventy-two pairs of slippers...

...What Is less well known Is that the Tourist Camp owned by the government and operated under the general direction of the Quartermasters' Bureau of the War Department also discriminates against Negroes...

...If these judges, a hundred years ago, had aet 3 per cent as a fair return on a public utility, then that rate would seem as sacred as 8 per cent now seems...

...MOW that the Tammany ad J* mioutration hat climbed on Jae band wagon and ordered a Metal attack upon electric rates Jl New York City, it must be indent to everybody that there p something in the talk about politic gouging the public...

...By Paul Blanshard How the Utilities Prosper in Hard Times Thu Is as Good • Tune as Any to Make a Fight Against High Utility Rate*—How the Utility Companies Are Making the Depression Pay Millions in Extra Profits Now Is the Time to Fright for Municipal Socialism...

...When we talk about utility companies earning large dividends on I book value of their common stock the corporation lawyers reply that H is not common stock but valua-t»o?r*which should be the basis of . earnings...

...The names of all guests who canceled registration because of the Jim Crow policy of the hotel, it was reported, were flashed to all hotels in the city...

...With the help of the hospital social service department she was sent to a sanatorium for a two months' rent...

...Now let them put the shoe on the other foot when prices are coming down...

...The socialisation ef New York's electric companies alone would mean In the long run a earing of $17 a year for every one of the 1,600,000 domestic consumers ef New York City...

...Perhaps the decision will be declared Illegal, but the idea Is economically and morally sound...

...The truth ia that the book value of common stock is now I very close to valuation, and that sJ I company like the New York and j Queens Electric, which makes 16 : per cent on book value, is making very close to 16 per cent on a real voluation...

...A legal minimum wage guarantees him a market as well as protection against his wage-cutting competitor...

...Ia the richest eity of the world lae»en are being paid 12^ cents Pt making a dress, while the 'fln-PWT* of that dress gets 3 cents, m lh'/i cents for the labor on tho feapleted dress," the report said, fas average wage offered for a pl week of 49^ hours to 769 ex-Wsnced women workers in the in-Pjtrial field from July, 1932, to PfUmber was $10.84...

...to 331 girls was $7.84, with the rate dropping steadily...

...A federal court In Illinois recently In the case of Kankakee Water Com pany vs...

...Gilbert held that a S.2 per cent return was not routines tatory in the light of present conditions...

...She averages between $5*.50 and $6.50 for a sixty-hour week...

...I lam in favor of this second attack, j It is nonsense to assume that a protected electric or gas company | has the right to receive 8 or 10 I per cent return on its investment (or on its valuation in the fourth year of depression—or at any other time...

...That would save the electric, gas, and telephone consumers ot New York City $33,598,000 in one year...

...Later it was announced that the money would be paid back, but many of the delegates had difficulty in finding rooms in other hotels and had to go to rooming houses...

...Reduce Rates What the public needs is a national drive to reduce the rate of return on public utility common stocks to • per cent...

...The so-called 'fair" : return on invested money is simply la tradition established by conservative judges who have no revolutionary social philosophy...

...The Junior workers, IT to 81, many of them the sole support of the family, are having a really desperate struggle," according to the report...

...What tha Congress, end especially the Socialist and labor delegates from New York, did to protest against the discrimination in the Cairo Hotel is well known...

...Their spokesman was Norman Thoiras, and when at first the hotel refused to return the money he securec the cooperation of a number of lawyer delegates to bring suit...

...The great electric and gas companies have been arguing for years that their valuation should be based upon reproduction erst That was a splendid argument for them when prices were going up...

...Corroborative evidence was fcnmd in the social service case re-SBWs of a number of hospitals...

...5.50 for 60 Hours The earnings of piece workers, •Bcordinp to the report, are even Jjjw than the weekly average of JW.84...

...And the usual pay for finishers today is 3 cents a dress...

...Dividends, on the other hand, increased from $63,863,200 to $80,-496,500, an increase of $10 633,000, 1 pr 26 per cent...

...The Wisconsin Public Service Commission not long ago ignored the valuation of utilities as a basis for rates, and declared that a temporary rate should be based upon common stock book value...

...10 " " 10 " " Kings County Lighting Co...

...A dentist offered $10 for an assistant to work six days a week, answer the telephone, receive patients, assist at the chair, sterilise instruments, type bills and dust...

...B4 " " 28.0 " " Subsidiaries of Con*olidat«d Go* New York Edison Company _____________________ 8.7 per cent 10 per cent United Electric Light and Power Co...........— 10 " " 14 5 " " New York and Queens Electric Light and Power Co...

...The total increase | over 1929, therefore, was $36,757,-| 725, or 57 per cent, j Dividends of the various com-I panics in 1929 and 1932 are as follows: Company 1929 1932 Consolidated Gas' Co.___________________________ 8.9 per cent 11.7 per tent Brooklyn Union Gas Co...

...The worker furnishes a large percentage of the purchasing power of the Nation, and this is lessened as wages come down...

...Perhaps the decision will be held unconstitutional, but perhaps not Even the Supreme Goer* is sometimes sensitive to waves of public indignation...

...The League derived its Informant from the examination of em-Heyers' applications for workers Bed with the State Employment lerrice and with such private ex Manges as the Young Women's Omstian Association and the Wrls' Service League...

...Living Standards Being Reduced to Lower Levels toUTHLESS employers are EJ5 driving wages down to star-tatkm standards and rely on IJnwity relief to pay the differ-tSee between their garbage-can fenes and what it costs to keep pre according to information fade p ublic by the Consumers' league of New York...

...Big Increase* From 1929 to 1932 the r.mount [ of common stock outstanding in-| creased $63,504,000, or 8.5 per cent...

...While the prices of almost every •taer article we bur hav* goit.3 Sown, electric and gas rates have, remained substantially tho game Jgr the ordinary residential con-' aimers of New York City...

...A typical case is that of am expert needlewoman In a piecework job who suffered a physical breakdown...

...The troth is that even the wildest ttarges against the great public .anility companies of New York (W agitators are not more sensational than the cold figures of dividend*, earned by these com-panies during the depression...

...Clerical Workers Average $11.M Turning to clerical workers, the report declared that the average weekly wage of 141 women employed in offices was found to be $11.39, but there were many la-stances of wages below the average...

...How can we either protest Hitlerlsm with good grace or hops to escape similar ills In America when we chronically carry out a more thoroughgoing discrimination against our colored fellow citizens than he has as yet Imposed upon the Jews...

...How should electric and gas rates be reduced...

...15 * " 15 " " Brooklyn Borough Gas Co...

...Declining Price* The annual report of the New York Public Service Commission of 1931 bears out this opinion by saying: "With declining prices, such as those during the last few years, reproduction cost is rapidly approaching and in some cases has reached original cost, usually where a large amount of property was installed in the decade from 1917 to 1920...

...At this time," the report said, "the employer who wants to pay his workers a living wage is helpless...

...At the morning session I of the Congress it was reported i that the hotel had barred Floria I Pinkney, a Negro delegate who had made her reservation in advance...

...Norman Thomas, commenting upon the episode, said: "One of the important results of the Continental Congress in Washington was to shed light on the extent to which discrimination against Negroes is carried on In Washington, the capital of the nation...

...In to earn $1.05 s day-it was •JW, she had to handle 720 pairs ¦ulppers in nine hours, or one «jry forty-flve seconds...

...A study of these dividends has recently been made by E. Michael White, of the City Affairs Committee...

...he must produce as cheaply as possible because his competitor will undercut him by paying lower wages...

...her average weekly earnings were less than $4 for a forty-eight hour-week...

...Npw is the time for a tidal wave that will inundate the reactionary phi losophy of public utility law...

...In addition, there was a net increase in surpluses of these companies of $29,000,000 during the same period...

...There are two chief methods of attacking the problem...

...The average wage offered from May to December, IW...

...The dividends paid i in 1932 were worth $20,124,126 | more than the same number of dollars in 1929...

...finisher en assises, supporting her two children and her jobless husband, gets paid 4 cents a dress," the report continued...

...Beyond all these Immediate arguments for rate reduction Ilea the one overwhelming argument that private ownership of utilities has been a colossal, economic failure...

...The feajsrt was made by Helene P. teas...

...A comparison of the dividend record of the New York companies ] for the years 1929 to WV2 show* | that New York City's utility com-1 paniea have actually profited by the depression, since gas, electric,' and telephone dividends on common 1 stock increased on the average from 8.0 per cent in 1929 to 10 per cent in 1932...

...7 " " Hi • " Brooklyn Edison Company______________________ 8 " - 8 " " a —— Why should the groat utility tympanies make such dividends when all other great corporations Ire either losing money or earning greatly reduced returns...

...Speaking for myself and the Socialist Party, we believe that all this discrimination—economic, political, and social—Is not only unjust in itself but fraught with menace to the country...

...The situation created a profound sensation in Washington, and when the action of the New York delegates was reported to the Congress sessions it was greeted with tremendous cheering...

...Another had reduced his secretary, a college graduate who does court stenography, to $6 a week...

...As reproduction cost drops, let them reduce the rate base and pass on the new valuation to the consumer...

...Either you can start a rate case before the Public Service I Commission, based on an analysis of valuation figures, or you can make a general frontal attack upon the whole theory of paying 8 per cent dividends to protected com-I panies on alleged capitalization...

...A lawyer was on record at several agencies who asked for an expert typist with a knowledge of German for $8 a week...

...DELEGATES QUIT HOTEL THAT BARRED NEGROES nPHR New Continental Congress * met in Washington to consider the state of the nation as a whole, but it took time to strike a blow against the notorious Jim-Crowism of the nation's capital and for civil rights fot Negroes...

...Several hundred of the delegates thereupon marched to the hotel in a body, canceled their reservations and signed a written protest demanding the money they had paid in advance to be returned to them...

...There is a new legal authority for this plan to cijt divid-nd rates on utility common stocks...