NEW YORK SHAKES HANDS WITH WISCONSIN A SKETCH OF THE POWER BATTLE IN TWO STATES
Reis, Assemblyman Alvin C.
NEW YORK SHAKES HANDS WITH WISCONSIN A Sketch of the Power Battle in Two States ASSKMBI.YMAN ALVIN ('. UKIS [Chairman, Judiciary Committer. Wisconsin State Legislature] ASSEMBLYMAN ALVIN C. RE1S...
...Riggs had quite a discussion over the theory ot reproduction value and the now notorious McCardle and O-Fallon cases...
...in the examination...
...Pinchofs nineteen measures designed to curb the power industry were all killed several years ago by not even being allowed to get out of the legislative committee, a stifling process impossible in Wisconsin...
...Judicial and what he calls Master Mind, by which he means an expert engineering and accounting service...
...In short, the Commission showed a willingness to go quite thoroughly into the possibility of the power district plan...
...it is well known to lawyers that the trend of judicial decision in Wisconsin follows more closely that of New York State than any other...
...One might say parenthetically that the Wisconsin municipalities have demonstrated their ability to manage electric enterprises successfully and show a record of financial soundness, mining power and ability to keep rates low which may well be the envy of public utilities privately owned...
...not the legislature Itself has any right to give, for any consideration whatever, a single potential kilowatt in virtual perpetuity to any person or corporation whatsoever...
...Donovan is assisted by Prof...
...Wisconsin produces over 70 per cent of the cheese of the nation and New York ranks next high...
...It can not be attacked as partial...
...Are the municipal plants well managed...
...In other words, If the utility is going to charge rates to the public on a certain base, the utility should also pay taxes to the government on that base...
...I have no criticism to make of Hie breadth of the examination which the Commission is permitting although it seems to me that it will never be possible to write a theory of depreciation into the statute and that Prof...
...Gov...
...It seems that the Wisconsin proposition was the first one of its kind that has been laid before them...
...Are any subsidized by funds from general accounts of the cities...
...Their rushing waters speak to us...
...In i industry these two commonwealths ex- i cel...
...There can be no such excuse now...
...Riggs of the University of Michigan was testifying upon a theory of depreciation and did so for two hours...
...I think, that the water power of the state should belong to all the people...
...Mosher evidently makes up the list of questions for witnesses and handed me ii questionnaire covering forty-six Items when I arrived...
...In the Stale of Washington last year 58.000 voters— under the initiative and referendum prevailing in that State—signed the petition to propose the power district bill similar to the one later offered in Wisconsin, which measure however was killed by the Legislature of Washington just as it was by the Senate in Wisconsin, and now under the referendum process goes on the ballot for approval or disapproval of the voters of the State of Washington at the next election...
...New York and Wisconsin stand today as the two outstanding dairying states of the Union...
...Would It be advisable in the public interests to endow some agency with supervisory authority, in order to avoid possible over extensions, conflicts with neighboring units and the like?'" "The New York Commission was very much interested in the work of the Wisconsin Legislative Interim Committee on Electric Power and wanted to know what the Wisconsin outlook was for future legislation and constitutional amendment in the direction of the proposed power program...
...The Commission Has recently written me for copies of the 239 page brief submitted by the League as an exhibit for the report of the majority of the legislative interim committee and I have been required to respond that there is only one complete copy in existence as yet...
...The New York Commission now sitting seemed particularly Interested in the public operation aspect of the Wisconsin situation...
...In the production of certain canning crops these two states appear at the head of the list...
...Prof...
...We have eighty-six municipal electric plants in Wisconsin today and apparently they have obtained a stronger foothold than have ; similar publicly owned public utilities In New York...
...Roosevelt in his inaugural message last January, which thoroughly expresses the 'Wisconsin idea,' when he said: " 'It Is agreed...
...The New York Commission seemed to be impressed by the fact that the League of Wisconsin Municipalities, which now rmbraces 204 cities, towns and villages, has gotten behind the public,power program...
...Immediately preceding me was Morris Cooke who conducted tile Giant Power Survey for Gov...
...This strikes me as sauce for the goose being sauce for the gander...
...Reis had been called to New York at the request of Gov...
...Under the bill would .the power district or a given city have the right of condemnation of an existing private plant or plants...
...California has had Us power struggle...
...I doubt whether everyone present absorbed the suggestion although several of the utility men in the audience very plainly got...
...critical of the attitude of utilities toward their obligations to the public, and expressed the belief that one thing necessary was a change in point of view of public utility officials toward the duties which they owe the public service...
...Roosevelt's proposal is that the State of New York shall own the water power nt the sources and thus be enabled to cither operate It or lease it to private individuals upon emphatic restrictions in the lease which will guarantee the most reasonable possible rates to the consumer...
...The Chairman of the Commission is John Knicht who is president pro tern of the New York State Senate...
...The New York Commision has called scores of citizens and Is to hear some thirty more...
...Mosher reaches the conclusion that all electric rates in Ontario are infintely lower than the normal in this country and explodes the legislative propaganda of the utilities that the Ontario government Is keeping rates below cost to the domestic consumer and making the commercial consumer the goat for "political" and "vote catching" purposes...
...Among the tribunals of the country which in the past half century have received the greatest recognition from bench and bar are the Supreme Court of Wisconsin and the Court of Appeals, which Is the highest court of New York...
...Wisconsin State Legislature] ASSEMBLYMAN ALVIN C. RE1S of Madison, Progressive, has recently returned from New York where he testified before the New York Commission on Revision of the Public Service Commissions Law...
...Cooke believes that the electrical industry should be regulated by three agencies: Administrative...
...Gif-ford Plnchot in Pennsylvania...
...It may lie remembered that at the last session of the Wisconsin Legislature a joker was put into one of the tax bills to the effect that the tax base should never be greater than the state base...
...Riggs' treatise might more appropriately have been presented to the Public Service Commission for Its consideration in an Instant, case rather than to a Commission appointed to revise the Public Service Commissions Laws...
...There was...
...Wisconsin has less than a million prlnmry horsepower whereas If all the developments open to the State of New York rould be utilized, there would be several million horsepower at the disposition of that great commonwealth...
...In pursuing this parallel It is interesting to note that in the year 1900 i the states which are making the great- j est electric power battle are New York and Wisconsin...
...The title to this power must vest forever in the people of this slate...
...Some New York attorneys and students of the subject are suggesting another method of approach which we have given consideration to in Wisconsin, namely, by contract...
...Bonbright and Prof...
...By th.it I mean that the State, or Its municipalities may be In a position to ic-qulro by the original franchise or contract that the utility shall consent to a certain valuation In consideration of obtaining the franchise or contract...
...A. J. J. TIE New York Commission seemed particularly Interested In the Wisconsin Power District Bill which we proposed at the last session...
...inasmuch as the publication of the appendices ;o our majority has not yet been authorized...
...Franklin D. Roosevelt is today leading the power fight in New York...
...The Legislature in this matter is but the trustee of the people, and it Is their solemn duty to administer such heritage so as most greatly to benefit the whole people...
...James C. Bonbright of Columbia University and Frank P. Walsh, a nationally known attorney, are active members o: the Commission and took a decided pan...
...The Wisconsin Code of Judicial Procedure and the New York Code are patterned on the same model...
...California has a power district law and the State of Washington, as I have said, initiated one last year, but evidently representatives of those states have not testified before the Commission...
...Wisconsin produces 55 per cent of the canned peas of the nation and again New York comes in as a strong competitor...
...They tell us what In the majesty of their power, they are going to do with us and with our history.' In horsepower and kilowatt hours available, New York vastly exceeds Wisconsin in its potential water power resources...
...A writer in the New York Times recently used these picturesque words: "Our great rivers have come to us like gods incarnate...
...These two states, for instance, were among the first to have laws restricting the hours of labor in Industry...
...HLs comments upon the New York inquiry and Its background follow.—Editor's note...
...It approaches the matter with the view of a scientist and its Chapter IX on Ontario reveals the situation In that Province in the true lie in in which the Progressives of Wisconsin have shown it and not with the distorted perspective that certain critics of the Ontario Hydro-Electric pi eject h.ive given it...
...Cooke Is quit...
...Upon this subject a Commission revising the statute might, come closer to approaching a solution, although even here it could not strike, directly at the theory of reproduction values as n rate base, inasmuch as the U. S. Supremo Court treats this as a constitutional question and moreover one rising under the federal constitution so that the state is altogether powerless to deal with It...
...NEW YORK State engineers have made the statement that "the harnessing of the waters of the St...
...No commission, no...
...Obviously New York here outranks Wisconsin although it is true that Wisconsin, though only thirteenth state in area and twenty-second in | population, is nevertheless eighth in the amount of capital invested in manufacturing...
...William K. Mosher of the School of Citizenship and Public Affairs of Syracuse University who has recently put out a splendid book on "Electrical Utilities...
...Any one Interested in the subject should read this work...
...Is possible to regulate rates by contract and Gov...
...Dues the Railroad Commission supervise the rates and service conditions of municipal plants...
...Inside observers told me upon my visit that the Interests opposed to him are very powerful and have succeeded in the past in checking the state's electric power program, and that the success of the governor's battle in this matter Is problematical...
...The harings by the New York Commission are being conducted by William J. Donovan, former U. S. Assistant Attorney General, as counsel...
...Members of the Commission also inquired into our municipal electric utilities in Wisconsin with such questions as the following: " 'Does the plan also look toward an increase in the number of municipalities distributing and possibly generating electricity...
...Are they amortizing their bonds...
...rindicate the detail into which the Commission is going into certain subjects, I may say that when I arrived there Prof...
...Furthermore, it...
...Lawrence in tha section bordering New York State can provide four times the power that can be generated at Muscle Shoals and nearly twice that now produced at Niagara Falls and that Its development would greatly increase the number of the industrial plants In the Empire State...
...Our counter offer was sufficient to remove the Joker from the bill...
...Pennsylvania to be sure has had its battle, when Gov...
...Prof...
...This Was the shoe on the other foot...
...However, I suggested to the Commission In passing that an indirect method of meeting the reproduction value bugaboo would be to provide by statute that which Is perfectly constitutional and somewhat logical, namely, that the tax base shall never be less than the rate base...
...it—and smiled...
...NEW YORK and Wisconsin have often been pioneers in great movements...
...Similarly Prof...
...They wanted to know how- the districts would be constituted and financed, what authority they would exercise, whether their property would be taxable, whether they would have the tax power, whether their expenditures come within the prescribed debt limit of the constituent parts', whether the plan contemplates the retirement of the district bonds over a period of years, whether it Is proposed that the electric system shall be self supporting, etc...
...perhaps, some excuse for carelew legislative Rift of power sites in the days when It was of not seemingly great importance...
...To those who listen they make audible prophecy...
...The people of Wisconsin can treat as significant the language of Gov...
...We challenged them to meet us half way on that proposition and compromise by saying that the tax base should always equal the rate base, :t being well known that the average valuation of utilities in Wisconsin for tax purposes docs not come up to the valuation for rate making...
...Franklin D. Roosevelt's adherents to present the Wisconsin picture of the electric power battle and the program of power legislation sponsored a I the 1929 session of the Wisconsin Legislature...
Vol. 1 • February 1930 • No. 9
