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REPORT OF THE JOINT COMMITTEE OF THE

NATIONAL UTILITY ASSOCIATIONS

To the American Electric Railway Association:

GENTLEMEN: The Joint Committee of the National Utility Associations was organized in the latter part of 1920 as the result of the belief that matters of a national character bearing equally upon and having the same relation to all utilities could be more effectively handled and confliction of effort avoided by a central committee representing equally and impartially the three national associations most directly concerned. Its membership is composed of from seven to nine representatives each of the American Gas Association, American Electric Railway Association and National Electric Light Association, and its pfla'pose is to act jointly for the three associations named in matters where their interests are equally concerned and thus avoid the duplication of effort that would result from the independent action of each association.

The officers of the Committee are Randal Morgan, Chairman, Sidney Z. Mitchell, Vice-Chairman and Oscar H. Fogg, Secretary. Among its active sub-committees are the following:

Federal Taxation, P. H. Gadsden, Chairman.
Public Utility Fuel, J. W. Lieb, Chairman.
Public Utility Financing, S. Z. Mitchell, Chairman.
Public Information, M. H. Aylesworth, Chairman

First among the matters of importance in which the Committee has been active during the current year have been the que tions of federal taxation, the bill introduced in Congress (H. R. 10272) designed to restrict the power of injunction by the federal courts, and the present and still serious coal emergency.

Federal Taxation In the matter of federal taxation the Committee approved the follow ing program:

First : Any Sales Tax passed by Congress should follow the example of the French and Canadian Acts and exempt regulated industries.

Second: If a Sales Tax is adopted it should provide sufficient revenue to enable the elimination of the existing surtax and excess profits tax on individual and corporate incoinc.

Third: On the question of the normal income tax the public utilities should urge that the normal income tax on public utilities should not exceed the present rate. This is in line with the report of the Taxation Committee of the Industrial Conference Board.

Fourth: Any tax on undistributed earnings of corporations should be so worded as not to apply to earnings which are reinvested or held for reinvestment in the property within twelve months after the year in which they accrued, or which, together with the earnings distributed, do not exceed say 10 per cent return on the value of the property.

Fifth: In the event the Sales Tax is not passed, an attempt should be made to have reduced the very high registers of the surtax on personal incomes in the ground that the present registers are so confiscatory that they are defeating the purpose for which they were created, namely, to raise revenue, and the longer they continue to exist in force, the more they will defeat that end.

In May, 1921 Mr. W. V. Hill was engaged by the Sub-Committee as its representative in Washington in order that it could be kept constantly in touch with the situation as it developed from day to day. The Chairman of the Sub-Committee appeared before the Ways and Means Committee of the House and the Finance Committee of the Senate and presented the views of the associations fully as expressed in the program above. It emphasized before both committees the great injustice to public utilities of the present exemption from taxation of the income from federal, state and municipal securities, aggregating about $15,000,000,000, and oa behalf of the associations it energetically supported the resolution of Congressman McFadden, as follows:

"The Congress shall have power to lay and collect taxes on gains, profits, and incomes, from whatever source derived, which shall include gains, profits and incomes, derived from securities created by the States and their subsidiary governments, issued after the ratification of this article, and salaries of all public officials, federal as well as state, elected or appointed to office after the ratification of this article, withcut apportionment among the States and without regard to any census or enumeration :

Provided, That any State having in force a general income tax under which the gains, profits, and incomes derived from securities created by it or its subsidiary governments and from salaries of public officials thereof are taxable and are actually taxed, shall, after the ratification of this article, have the power to lay and collect thereunder taxes on gains, profits, and incomes derived from securities created by the United States and its possessions and territories, and salaries of all public officials of the United States and such possessions and territories."

The Sub-Committee has co-operated with various other national organizations which are opposed to the continued issuance of taxexempt securities and are united in demanding an appropriate amendment to the Constitution and the action of these organizations, the endorsement of Secretaries Houston and Mellon and the strong recommendaticn of the President demonstrate that public opinion has been aroused to the evil of this large volume of tax-exempt securities.

Legislation With the introduction by Congressman Bacharach of House Resolution 10212, it was immediately realized that this legislation if not directly aimed at public utilities would, if enacted, deprive them of the right of resort to injunction to stay the enforcement of the orders of state boards and commissions. The hearings held on this bill before Sub-Committee No. I of the House Judiciary Committee disclosed that among its proponents were some of the most zealous and radical advocates of home rule, among them Mayor Hylan of New York, Mayor Thompson of Chicago, officers of community councils, municipalities, representatives of state commissions and others. Representatives of the Joint Committee appeared in opposition to the bill and at each of the four public hearings which were held in Washington able and convincing arguments were presented against the wisdom of its enactment. Subsequently and largely through the interest which the Joint Committee had aroused in the matter, the American Bar Association at its meeting held in San Francisco in August unanimously endorsed the action of its Committee on Jurisprudence and Law Reform, which had registered unanimous and effective opposition to the Bacharach bill and other legislation of that character.

Public Utility Fuel The arrival of the critical stage in the coal situation made it necessary that immediate and effective measures be taken to protect the interests of utility companies and to insure the delivery of fuel for their operation. The Committee on Public Utility Fuel of the Joint Committee of National Utility Associations during the absence of its Chairman in Europe was represented by the Secretary of the Joint Committee and he had several conferences with Secretary Hoover and other officials of the Department of Commerce as well as of the Interstate Commerce Commission. Upon Mr. Lieb's return he promptly assumed the active direction of this work. Requests were made to the authorities for priority in the assignment of transportation equipment and for consideration in all other respects necessary to insure the continued operation of utility properties. It became necessary to have a representative in Washington personally to present and follow through all emergency cases and the Committee selected Colonel John Price Jackson for this service.

The results have already shown that only by this prompt action have we avoided a condition that would be little short of chaotic. The effective work which Colonel Jackson and his staff have done is of immeasurable value to the membership of the three associations and will be continued until we approach a return to normal conditions.

Public Information Through this phase of the Committee's activity the general educational information sent out by the three associations has been to soine extent co-ordinated and it is felt that particular benefit has been derived in bringing into closer relation with the three associations as one group, the various committees on public utility information which exist in many sections of the country. These associations as well as the Joint Committee enthusiastically support the work of the state committees on public utility information and render them all possible assistance and co-operation and plans have been discussed for the more uniform preparation of statistical and other educational information by the national associations for the use of the state committees and in any other educational activity.

The following resolution was adopted by the Joint Committee at its meeting in New York on January 4, 1922:

“In view of the successful results where State Committees on Public Utility Information have been functioning, the Joint Committee of the National Utility Associations unanimously recommends the continuation, development and permanency of this co-operative program of publicity and requests the managers of the three national associations which this Committee represents to inform the membership of their various associations of the action of this Committee and to use every effort in behalf of this Committee to further the development of this national program of publicity in the various states of the Union.”

Respectfully submitted,

Britton I. BUDD,
JOSEPH K. CHOATE,
Lucius S. STORRS,
Edwin C. FABER,
ROBERT I. TODD,

Randal MORGAN, Chairman,
Joint Committee of the National Utility Associations.
During the presentation of the report, Mr. Storrs said:

“There is an association which Col. Jackson has worked out with the Federal Administration Distributors in connection with the Distribution of Fuel, and I will read a paragraph from a letter which Col. Jackson received from the distributor, which speaks for itself. It is as follows:

The Federal Fuel Distributor desires to work as far as possible in cooperation with the Public Utilities. In developing plans to this end, he has recently sent us a letter of which the gist is as follows:

"" I would be glad if you could arrange matters to that all requests with reference to public utility fuel will be handled through your office with us. I think this will simplify the situation most expeditiously and give us one office through which to work, which will be advantageous to you people as well as ourselves.”

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"I may add that it is not the wish to have a lot of distributors applying to the Federal Distributors for assistance, but their desire is to have all the utilities apply to the National Utility Associations, through their joint committee, with requests for fuel.

"We ask you, if you do get into trouble, in connection with your supply of coal, to get in touch with Col. Jackson, and he will immediately get to work upon your particular proposition."

PRESIDENT TODD :- Is there any discussion on the report of this Committee? If not, we will proceed to the report of the Committee on National Relations, Mr. Charles L. Henry, President, Indianapolis & Cincinnati Traction Company, Indianapolis, Indiana, Chairman.

CHARLES L. HENRY : Before presenting my report, I want to say a few words to supplement what Mr. Storrs has said in regard to public utilities and fuel supplies. Mr. Jackson is looking out for us in connection with that situation, and Mr. Jackson is in the office of this Association in Washington. I was there a few days ago and as a result of that visit, at my request he wrote me a letter, from which Mr. Storrs has since made a quotation. The whole situation seems to be smoothing out, but the one word that he said to me was not to let the situation get away from you.

(Mr. Henry then abstracted the report of the Committee on National Relations.)

REPORT OF COMMITTEE ON NATIONAL RELATIONS

To the American Electric Railway Association:

GENTLEMEN: Your Committee on National Relations begs to submit the following Annual Report:

The work of the Committee has been quite varied during the year just ending. In addition to a large amount of correspondence and many personal conferences, it has been necessary to give attention especially to a number of matters before the Interstate Commerce Commission and before the Committees of Congress.

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