United States Shipping Board

United States Shipping Board

Cooke, Morris Llewellyn, 1872-1960

WWP25186

1918 September 20

Different arrangements that have been made with public utilities.

Library of Congress, Woodrow Wilson Papers

Woodrow Wilson Presidential Library & Museum

World War, 1914-1918--United States

Danna Faulds

WWP25185

WWP25187

English

Document scan was taken from Library of Congress microfilm reel of the Wilson Papers. WWPL volunteers transcribed the text.

UNITED STATES SHIPPING BOARD

Washington

Hon. Winthrop M. Daniels,

Chairman, Interstate Commerce Commission,

Washington, DC

Dear Mr. Chairman: -

In answer to your request I submit the following schedule of contracts and other contacts as between the Government on the one hand and private utility corporations on the other. I have only cited instances of which I have some measure of personal knowledge. The number of such cases might of course be indefinitely extended. This list, however, illustrates the wide variety of situations. Under our existing organization, any uniformity in the treatment of comparable problems is quite impossible. The following schedule includes instances taken from the practice of the War Department, Navy Department, Labor Department, Shipping Board, Fuel Administration, and War Industries Board. Only the more significant features in each case are given. Thus, the Government has agreed to finance private companies as follows:

1. To pay 75 per cent of cost of bridge to be used in part by a street railway company.
2. To construct a street railway and to lease it to company at 5% on a part of the cost; same arrangement except rental based on whole cost.
3. To construct street railway line and company to purchase after the war at its then value, paying 5% interest.
4. To pay cost of electric facilities; company to pay 5% and to operate. Government to sell or lease after the war as it sees fit.
5. To pay losses of a utility up to a certain amount
6. To furnish funds and take part earnings as payment.
7. To build and to postpone settlement with company until after the war.
8. To loan funds to company at 5%. Funds to be repaid within 5 years from end of war. Property purchased to be security until payment made.
9. To advance 40 per cent cost power facilities. To be reimbursed within 7 years after war to the extent of excess war cost, same to be difference between actual cost and post-war cost.
10. Same as #9 except company retains part of depreciation and Government’s share in financing arranged through advances on purchase of current.
11. To finance extensions to water company and take payment in rates for water used.
12. To finance additions to gas plants, pay cost of operation and take output.

The following arrangements of a more or less miscellaneous character have been made in connection with utility services:

1. Government provides utility facilities, such as ferry boats; retains title and operates.
2. Government approves increase in power rates to plants engaged on Government work.
3. Government assumes responsibility for allocation of electric current produced by private plants; also limits its use.
4. Government orders private electric companies operating in different territories to connect power stations by means high tension lines.
5. Government persuades cities to modify their ordinances as to

1. Cars stopping on signal,
2. Candle power of gas,
3. Frequency of car operation,
4. Heating power of gas, and
5. Extension of lines.

6. Government joins with private utility company in urging necessity rate increase before         State Public Service Commission.
7. Government joins in request for permission for bond issue before Capital Issues Committee.
8. Government requires one manufacturer shall sell excess current to another manufacturer in competition with a regulated power company.
9. Government secures from Mayor and City Councils new franchise for street railway company.
10. Government regulates the quantity and quality of fuel furnished private utility plants.
11. Government orders irrigation waters shut off in order to safeguard supply to shipyards in Alameda County, California.
12. Government fixes wages for utility employees at such figure as to raise question of company’s ability to meet operating expenses.

In addition to the foregoing, I have heard of the following utility questions now pending before Government agents:

1. To move electric generating units out of municipally owned plant for use in privately owned plant.
2. To reduce quality of artificial gas about 12% without change in price, same to operate throughout the United States.
3. To commandeer current (i.e. service) municipal electric plant.
4. To build and operate large electric plant.
5. Closing down of isolated power stations so as to favor the more efficiently operated central stations.

I am taking for granted that this obviously casual summary will answer your purposes. Should you desire it, however, I think I can secure from the several departments a fairly complete listing of their undertakings in this class.

You understand, of course, that in citing the above cases I am not criticizing them. For the most part, these arrangements are thoroughly well conceived. Please advise me if I can help you further.

Yours very sincerely,

(Signed) Morris L. Cooke.

Care US Shipping Board,

Tel. 5201 Main, Br. 167.

Letter

Daniels, Winthrop More, 1867-