GIANT UTILITIES SEEK TO DELAY DEATH SENTENCE
Mobley, Radford E.
Giant Utilities Seek to Delay Death Sentenee By RADFORD E. MOBLEY WASHINGTON, D. C. — Dilatory tactics which delay the securities and exchange commission In its enforce-ment of the utility holding...
...City Service, June 3; Commonwealth and Southern, May 6: Standard Gas and Electric, July 5; North American, June 7, The answer to the commission's order is due from United Light and Power this week unless further extension Is requested...
...He continued : "Two hundred and eighty of the 57...
...29, 1940, made j payments of Interest, or interest and ' principal, out of operating revenues, I think It constitutes a telling reply to those who assert that the systems are not paying, and cannot be expected to pay, their own way...
...The total of defaults, or payments in arrears, as of January l, is only $56,765, Mr...
...This, Mr...
...It was recently charged on the floor of the U. 8. senate...
...As many of you know, this is a common practice In the financing and development of new business enterprises...
...Slattery said, that REA-financnd cooperatives had not earned the interest on their loans from th.- government...
...Three companies—United Gas, Electric Bond and 8hare, and the Engineers Public Service Co.—have already threatened to test the constitutionality of the law...
...Hearing dates tentatively set for the nine cited companies are: United Light and Power, which controls Madison Gas and Electric, May 22...
...This, he said, was a palpable misstatement...
...Slattery termed "an excellent showing," adding: "It is pretty generally conceded that all rural electric enterprises, whether public, private, or cooperative, require a period of growth of perhaps as much as five years before they attain their full development . . . not one of the systems financed by REA has been energized for so long a time as five years...
...24 (postponed after hearing on legal points...
...In a memorandum to dl-rectors, managers and superintendents i or REA financed systems, said that certain utility lenders were making a determined search for signs of failure in these systems In order to discredit the REA and to "smash and take over the rural electrification cooperatives...
...Some few borrowers are In default...
...Last week the United Gas Improvement Co., first of the nine Isrger holding companies to answer the SEC's recent order, argued that the commission should have drawn up a plan [or breaking up its utility empire before holding hearings...
...This technical objection does not take into consideration the fact that the commission waited nearly two years—initiating only one case during that period—in an erfort to gain voluntary compliance from the huge holding company groups...
...As to those not listed, a large proportion are not yet obligated to make any payments to us out of their revenues...
...This period when no payments from revenues are due from the newer systems largely accounts for the difference between the number of systems energiied —579— and the number appearing—280—as making payments from operating revenues...
...When the commission finally took action this year the holding companies began revealing their cards to stop enforcement...
...energise .1 sy .ems i nance...
...In the meantime, and largely for technical reasons, they pay us interest out of loan funds on such money as has been advanced to them during the period of construction and initial operations...
...Slattery...
...Power servirr for farmers, by farmers, is here to stay," said Mr...
...by REA bad, up to Feb...
...Slattery pointed out...
...Middle Wast Power, June 28: United Gas Improvement, Apr...
...The courts will be the last resort...
...A number of other systems have not merely lived up to the payment schedule but have made advance payments of Interest and principal, from operating revenues, amounting to $140,643, as of the same date...
...Electric Bond and Share, May 10...
...Their operators hope they can stymie the commission until the next congress Is elected, believing that as congress changes, the effects ol the power trust investigations beginning in 1928 will be forgotten and the new member of the national legislation will see fit to rppeal the law forced through after a bitter New- Deal fight...
...Of course, it does not wholly account for the difference...
...Such litigation would be long-drawn...
...Hits Utilities For Trying To Discredit REA Slattery Defe.iuln Record of Farm Electric Co-operatives WASHINGTON, I...
...Engineers Public Service, May 27...
...There are now 7O0 REA-flnanced systems spread throughout 45 states...
...Giant Utilities Seek to Delay Death Sentenee By RADFORD E. MOBLEY WASHINGTON, D. C. — Dilatory tactics which delay the securities and exchange commission In its enforce-ment of the utility holding company act have been started by the giant | companies which undoubtedly will seek to postpone operation of the law's death sentence for the giant holding units as long as possible...
...Fower company magnates hope their tactics will delay at least until 1941 the enforcement of this law designed by congress to remove the pyramided financial structures from the operating companies and return them in some measure to local control...
...They are not so obligated until 30 months after the dates of their notes to us...
...C—Harry A. Slaltery, administrator of rural electrification...
Vol. 10 • May 1940 • No. 18
