STATE OWNERSHIP OF UTILITIES IS RICHBERG PLAN
STATE OWNERSHIP: OF UTILITIES IS RICHBERG PLANi Would Control Capital Stock; Investors Get ! Bonds '¦RATE REGULATION IS FAILURE, HE CLAIMS Declares Incentives for' Private Profit Must Be...
...And because of a common j purpose and a co-ordination of interests j through banking houses...
...4. In order to induce public service corporations to reorganize under these terms it would be provided that a utility refusing to come under the terms would not be given authority to make extensions or to receive additional public grants, that ' public stock corporations would he | authorized to compete with the pri-I vate utility, that public stock corporations would be authorized to condemn the properly of private corporations, and that in the event i of a persistant opposition on the part of the privaely owned utilities, a constitutional amendment might | be put through to make the private operation of a public utilities unlaw-j ful...
...Since these expenditures are charged to operating costs which are repaid .In the rates charged to consumers, the result is that a hundred million consumers pay every year the cost of subjecting themselves to further exploitation...
...protect public interests...
...The foundation I and primary purpose of public utility, regulation must be recognized as the I j necessity for preventing the making of'] ¦ an unfair profit out of public business j ,by a public agent, who is privately select-' ed for the very purpose of making as ! much profit as can be safely and regu-\ larly extracted from operating a public j business...
...business so as to reduce private profits ' to a reasonable amount, private property i rights ot the...
...Privately owned public utilities today collect in excess of ten billion dollars from the American people...
...investors are brought for-.' ward so as to capture for private profit Sail the gains of improved operation, com...
...2. The regulatory commission of j the state should be authorized to name a minority of the directors of ' the corporation...
...Richbeve, pointed cut that, as long as the proprietary control of public utilities remains in private hands the man...
...Utility Business Public After pointing out that the furnishing of public utility service is not a private business but that those engaged j in it are public agents engaged in trans-j acting public business and performing a , function of the state, Mr...
...Investors Get ! Bonds '¦RATE REGULATION IS FAILURE, HE CLAIMS Declares Incentives for' Private Profit Must Be Curbed l a plan Tor publtr control and ownership of public utilities, whereby the state heroines the proprietor of utility businesses by acquiring sole ownership of ! their stock but allows private investors i to hold bonded indebtedness against : them, was advocated last week by Donald R. Richberg of Chicago in a state...
...Thus consumers would pay for their own • protection, which would be an improvement on the present practice of ! compelling them to pay for their I own exploitation...
...Rate regulation ¦ has failed, ."aid Mr...
...If unfair profits cannot be 'speedily uncovered and excessive rates ! cannot be promptly reduced, no other j regulatory successes can compensate for ; this failure, : , "After a few decade...
...As a practical program to eliminate ; | theye evils, Mr...
...to give private persons an interest in collecting public revenues would quickly undermine the foundations of government, as shown in the historic experiences of other nations...
...Enrich Private Enmployers Mr...
...mont given before the New York state i commission that is considering propos-| ed revisions to the public service com-j mission law of that state, j Mr...
...cd influence...
...because j I when the public seeks to control the...
...Never before has there been such a concentration of power, such a unification of purposes, such a well organized control of political machinery such an all-prevadlng Influence upon public thinking in behalf of private interests for the purpose of making profits out of public business...
...Richberg suggested the ' following plan: j i 1. All public service corporations | should be organized under laws pro- I viding thai the state shall furnish all the proprietary capital (which shall be nominal...
...of experimenta-1 tion, we now face the fact that present .regulatory methods arc inadequate to...
...agrrs or the business, who are in re-i ality public agents inasmuch as they ¦ arc carrying on a public business, find themselves authorized and obligated to use their public power in violation of a public trust and for the enrichment of their private employers...
...In order to maintain this private control of public business and to support this private power to profit out of public needs, millions are expended every year to evade public obligations and to confuse public opinion...
...Yet the privately owned public utilities in the United States today collect an annual revenue I which is several billion dollars larger j than the total of taxes collected an-j nually by our national, state, and local ' gvernments combined...
...5. AH the directors and managers ' of the utility would be designated as public agents, and would be subject to the general regulations and ¦ specific orders issued by the regu-| latory commission, j 6. The utilities should bear the expenses of regulation as one of the j operating' costs of the business...
...Richberg...
...The Interstate .Commerce Commission is our most, effective regulatory commission, and is, . therefore, subjected Id the severest criticism by private interests...
...j 3. The majority of the directors should be chosen by investors who are the holders of the bonded indebtedness of the corporation...
...The power to gather such a sum annually Is | a social and political force of unparallei...
...The state coni-| missions function more frequently in ! gestures and palaver than In the ef-: feclive exercise of governmental author...
...munity progress, advance in the stan-i dards of living, increased business, and ; of decreased costs of operation...
...We have recognized that the incen-: tive of private profit must be curbed or j public interest will be .'•acriflced, par-i ticularly when the natural curb of com-1 petition is not operative...
...Among the many causes of feeble j state regulation may be listed the demo...
...To farm out the collection of taxes and...
...Intcr-locklng I commercial enterprises and afflttated newspapers and magazines, these private operators of public business exercise an influence upon public opinion and public policy and upon law making and enforcement which Is wholly inconsistent with the maintenance of democratic institutions...
...Richberg is the attorney and gen• cral counsel for the National Conference j on the Valuation of Railroads...
...Richberg ifaid: "Private control of public business | is obviously fraught with grave dangers...
...rallzing influence of mercenary poll-I tics, the crippling .restraint of constant \ Judicial Interference, and the inherent limitations of stale soverlgnty...
Vol. 1 • January 1930 • No. 8
